19 Tips for Buying a Used Car

Buying a used car can save you lots of cash compared to a brand new. Whether you’re after a cheap runaround or a dream machine you’ve lots of choice on the second-hand market.

But with murky histories and hard-nosed salesmen, it can be a minefield. This guide is filled with top tips and checklists (we’ve created printable versions so you can bring them with you) to minimize the chance of any nasty surprises.

How much a used car will cost you will ultimately depend on what car you get. Yet there are plenty of ways you can reduce the final bill.

Year old cars are MUCH cheaper than new cars

The average new car has a list price of around £28,500. But by the time it’s one year old with 10,000 miles on the clock it costs just £21,000 – a reduction of more than 27% in the first 12 months. In the second year the depreciation rate is likely to slow by roughly half (so the second year, this average car would lose around £3,750 in value).

So picking a year-old model will dramatically slash the upfront cost. There are exceptions if you’re picking a plush model. Brands that hold their value best tend to include Mercedes and Porsche – so you won’t see too many year old luxury car bargains out there.
Revealed: The cheapest cars to run

To save you time and energy trying to work this out, car experts have already done this research. You can compare running costs of different models, including the ones you’re looking to buy, on several sites, including Parkers and What Car?. But, follow these rules to home in on the cheapest cars:

Smaller engines can be cheaper. The choice of a 1.0-litre or a 2.0-litre engine isn’t just about pure horsepower. A large engine will usually burn more fuel than a smaller one. So engine size is a vital consideration if fuel economy is an important factor in your decision.

Of course, this depends on how you use the car. A small engine is most efficient when it’s used as intended, such as to pootle around town. If a small engine is used a high speed, it’ll need to work much harder to keep the car moving – burning more fuel.

Petrol cars tend to be cheaper than diesel. Diesel engines are often more economical than their petrol counterparts. But don’t be fooled into thinking this definitely makes diesel a better option. These cars are more expensive, and they usually cost more at the pump than petrol.

Manual cars are cheaper than automatic. Switching between gears is extra work – particularly to those of us prone to stalling at traffic lights. Yet while automatics take some of the hassle out of driving, they come with a higher price tag.

A manual Audi A3 diesel hatchback, for example, costs £20,801. This compares to the automatic version, at £22,290 – or a rise of £1,489. Yet many automatics are more fuel-efficient than their manual counterparts, as they ‘know’ the best gear to be in, so you could recoup the extra cost over time.

Hybrid cars are cheap to run, but cost more to buy. Technology is improving everyday with modern hybrids coming in all shapes and sizes, from superminis to luxury SUVs. Fuel-economy and cheap or even zero tax rates make part-electric models appealing, like the Toyota Prius. They also tend to hold their value for resale.

But they usually cost more to buy – so weigh up the savings.

Check CO2 emissions, as it affects the duty you pay. Buyers of the most polluting cars pay the most road tax. But choose a car (such as the emission-free hybrid Toyota Prius) that produces less than 100g of CO2/km and you’ll pay nothing at all.

An average family-type car, like a Volkswagen Golf, will set you back £30 a year. See a full list of Vehicle Excise Duty rates plus how to calculate yours.

Smaller cars are cheaper to insure. If you’re looking to save money, you’ll want a car that’s cheap to cover. The cheapest to insure tend to have a lot in common, including size. Put simply, it’ll cost you more to insure a 4×4 than a small city runaround.

Cars are placed in groups ranked between one and 50, using research by the Motor Insurance Repair Research Centre (Thatchem). This is based of a range of info including performance, safety features, price of a new model and cost of spare parts. The Hyundai i10, for example, is one of a handful of cars in group one, and thus is cheap to insure.

Check the insurance group rating of the exact model you have in mind before buying at Thatcham Research. The higher the number, the bigger your premium is likely to be. It’s also worth checking our Cheap Car Insurance guide to see what the likely cost is.

All the above’s important, but if you want to nail the absolute cheapest cars to run, here they are (though do note these are all smaller cars):

The best time to buy a used car

Once you’ve decided what car to pick, now you need to know how to get the best deal. One way to slash costs is to buy at the right time.

Dealers have targets to meet, with bonuses up for grabs. Typically, these are based on quarterly sales, making the end of March, June, September and December a good time to buy. They need to shift cars, so will be more willing to negotiate and offer attractive finance packages.

But, if you’re buying from a private seller, there’s unlikely to be a good or bad time. Private sellers don’t have targets to meet, other than the price they want to achieve. If you’re buying this way, keep an eye on prices a few months before you actually buy – if they’re heading down, you may want to wait. Heading up, and it’s prudent to buy sooner.

For a quiet time, try to avoid weekends, or the start of the month, just after payday. A dealership crammed with wannabe buyers isn’t a good place to bargain hard.

If you’re buying privately, it’s also worth picking your time when other potential buyers might be away. This could be over Christmas, or deep into the summer holidays. Think about the style of car too. Summer is when drivers dream of buying convertibles, making winter a good time to haggle for a deal on one.

Before you start browsing for the ‘one’, think about what you really NEED from a car. There’s no point buying a two-seater convertible if you’re about to start a family, so work out what’s realistic. Ask yourself:

What are my essential requirements? Enough room for the family? A cheap car to run? A sporty number? Think about what you need…

Do I need the car to do anything specific? This could include towing a trailer or fitting into a small space.

Is it for short city drives or longer motorway journeys? Does it need to be able to cruise at motorway speeds without straining?

What’s better, petrol or diesel? The fuel you want to use can make a big difference in the model you might choose.

Do I need a massive boot? Consider whether you need room for things such as sports equipment or a pushchair – or if you need to fit friendly Fido or your meddling mother-in-law.

Do I want to consider an eco-friendly car? If so, a hybrid or electric car could be an option. The cost more to start with but some come with Government grants, eg, the BMW i3 has a £5,000 grant.

Need to flog your current car? Selling privately can net you 20% more than part-exchanging

If you need to flog your current wheels, you’ve two options. You can either part-exchange the car at the dealership, where the dealer gives you a price and knocks it off the total cost of the car you’re buying. Or you can sell privately – where you list the car and get cash from the person who buys it.

Part-exchange. This can save a lot of hassle, but it’s highly unlikely to be MoneySaving. Yes, it stops you having to advertise the car or deal with potential buyers, but, and this is a big but, you also won’t get as much as selling privately. Remember, the dealer will pay less than your car’s value so it can move it along at a profit. So weigh up offers carefully.

Selling privately. This is more time consuming, but you’re likely to get more for the car, if you’re prepared to put the effort in. Options include classified listing on Gumtree (free), PistonHeads (30-day ad is £11.99), Autotrader* (one-week ad is free for cars under £1,000, while cars over £1,000 can be listed from £36.95) and Motors (12-week free ad). Other options include selling the car on eBay or Facebook.

We investigated how much more you’d get selling your car privately, and a search for the value of several models on Autotrader.co.uk found the price difference was often 20% more selling privately compared with part-exchange.

If you do decide to part-exchange, watch for dealers inflating the trade-in price of your old car – making it look like you’re getting a good deal – but at the same time charging you more for the new model. Simply check how much cash you’ll hand over once you’ve swapped cars – that is the true cost of the deal.
‘How much will it cost me?’ checklist

Before you start doing your sums you need to decide what car you want.

You can check out every model online. What Car?, Carbuyer, Honest John and Parkers are among the best sites for research purposes – and don’t forget the Top Gear site for tons of online reviews.

There are two sorts of costs you need to budget for: upfront and ongoing. Check you’ve thought about all of the following and budgeted for them:

Any upfront costs. Once you’ve decided to buy a car, you will of course have to pay for it. You can either pay the whole cost upfront or take out a finance deal. Whichever way you choose, expect to at least pay some kind of down payment before you drive off.

Finance repayments. If you’ve taken a personal loan, or dealer finance, you’ll need to factor in repayments – read more on your finance options.

Fuel. To work out the rough cost of running a new car, the Gov.uk website has a fuel consumption search tool. Motoring website Honest John also has a handy ‘real MPG’ section where drivers have reported how many miles per gallon they actually get. See our Cheap Petrol Guide for how to cut costs.

Tax. You can check out how much road tax you’ll need to pay on the Gov.uk website. You can also search for cars in a particular tax band (A-M depending on the car’s CO2 emissions). The cost of tax range from £0 to over £1,000 in year one. Standard rates then apply, at up to £500/year.

Car insurance. The cost of insurance is based on how much of a risk insurers perceive you to be. Eg, if you are a youngster who’s just passed your test, you will pay more for your cover. Plus, taking breakdown cover will bump up the cost. New cars often come with a year’s worth of breakdown cover. See our Cheap Car Insurance and Breakdown Cover guides for tips on how to cut costs.

MOTs. Once the car’s three years old, you’ll have to pay for an MOT every year, which costs £54.85 (for the test). Use our MOT guide for MoneySaving tips, including getting the test at local council centres, which could save you £100.

Servicing. You’ll need to get your car serviced regularly, typically once a year, though it varies by model. Servicing ensures it’s safe to drive and keeps the manufacturer’s warranty valid. A routine service typically starts around £120.

Parking permits and tolls. Unless you have free parking where you live, or a garage, you will probably have to pay for a resident’s permit. Check your council website to see how much this costs. Consider any costs to park at work if you drive there too, as well as toll charges you may face along the way.

Other spending. New tyres, repairs and valet cleans can add up, so make sure there’s some breathing room in your budget. So allow a couple of £100s extra for additional spending per year – just in case.

Check as many dealerships as possible and pit them against each other

Ask all the dealers in your area for their best deal on your second-hand car of choice. If you’re prepared to travel far and wide to find a rock-bottom price, expand your radius. Make a note of the best price, and ask others to beat it.

You can always go back to your local dealer to ask if they’ll match the best offer. They might be keen for your cash, and happy to offer the same deal.