With the cost of used cars at an all-time high in 2023, some of us are considering making the splash and buying a new car. The scarcity of supply in the used car market means people are increasingly willing to ignore the traditional financial advice of buying a 3 year-old car instead of a new car. This advice proclaims new cars depreciate in value by over 15% after the first year. Many will now accept the loss of new cars value rather than paying more for a used car in todays climate.
If you’re looking at buying a new car in 2023, we’ve collated all the necessary information you should consider during the buying process below.
1. Know your budget & if a used car offers better value
One of the most important considerations when buying a new car is determining your budget. Your budget may mean some models/brands will be out of reach or you may have to sacrifice on additional specs. If you do not have the savings to cover the full price, then Car Finance is another consideration (more on this in tip 12). It might also be worth considering if you can afford the car you really want or if you’d be better off buying a used car. You can view one of our blogs investigating the questions you should ask when buying a used car.
2. Choosing between Diesel, Petrol, Hybrid or Electric (BEV)
The debate is raging amongst new buyers on if now is the time to make the switch to electric vehicles. Such a move would avoid rising fuel costs and future proof their next car purchase. One can read about the advantages and disadvantages of Electric Cars on our recent blog. For those reticent about making the switch to fully electric (BEV’s), then hybrid vehicles are the popular alternative. For the traditionalists, the great electric vehicle switch will take time before reaching mainstream. This is especially true with the government’s goal of 1 million electric vehicles on the road by 2030. In that instance, petrol and diesel vehicles are not going anywhere in the next few years and may offer a more familiar and less risky purchase for some.
3. Select a dealer/brand that will be easy visit/contact post purchase
When at a dealership, don’t rush into a deal. Consider if the dealership is responsive to your concerns and have a great customer service. Both will be important if you run into any issues with the car. The majority of new car manufacturers offer a car warranty. It may be important that there is a recognized brand dealership near you in the event of vehicle issues. This does not mean you need to buy locally. But if you buy a Toyota in Dublin while living in Galway, you should consider if there is a brand dealer in Galway that could provide the regular servicing of the vehicle.
4. Examine running costs & fuel efficiency/range
As fuel increases continue, fuel economy will be important in the choice of your next vehicle . Hybrid vehicles can save up to 30% on fuel costs. Battery vehicles can save 70% on car running costs but can vary in driving range depending on the model. Many new petrol and diesel vehicles also offer improved fuel efficiency. It may be worth noting that larger engines may be increasingly targeted in Government measures aimed at minimizing Carbon emissions.
5. Know the no. of years warranty
Most car manufacturers offer a warranty on new car sales. This means they will repair any major faults/defects to the vehicle. E.g. Kia offer one of the best in class warranties of 7 years or 150,000km whichever is sooner. New cars rarely have major issues during the first 5-7 years off the production line. Yet, if you want peace of mind, keep an eye on the warranty offered by the manufacturer and after care services.
6. Research the price of car insurance
Before buying a new car, you should check what the insurance is likely to be. Larger engine sizes will have higher insurance premiums. Checking before purchase will allow you to avoid any nasty surprises.
7. Investigate if the car specs meet your requirements
Does the car have all the specs you need? Or do some technical specs come at an extra cost such as Cruise control, alloy wheels, sunroof etc. Find out what comes as standard and what specs can’t do without. Also bear in mind other aspects of the car such as interior space or boot room if you have a growing family.
8. Test drive more than one car
Its important to try out a range of different car models to explore car suitability. Its often only when we get in a car that we find out if this car is for us. If you like a car, try to test drive its main competitor as well so you don’t develop “oneitis”. Don’t be clouded by your first new car experience and miss out on a better deal.
9. Negotiate on price
Not everyone realises when buying their first new car that the stated dealer price for new vehicles excludes “delivery and related charges”. This can often add on an extra €1500 to the price. Don’t be afraid to negotiate on price with the Salesperson. They will often move on the mentioned pricetoo get a deal done.
10. Trade in your old vehicle to decrease the price
Having a car to trade in against the value of the new car will help in dealer negotiations. Used car sales are booming and dealers know they can shift cars. They may give you a better deal if you trade in your existing car.
11. Factor in the deposit and delivery date in your buying decision
Car dealers may ask for a deposit of greater than €500 to reserve your new vehicle. You often may have to wait to receive your new car as it may not be in the showroom. You will need to factor this into your purchase timeline. If you need the car very soon, new car deliveries usually take over 8 weeks.
12. Identify all of your car finance options (and know the small print)
When buying a new car, most dealers will offer car finance/PCP. While PCP (Personal Contract Plan) can be convenient, it comes with many caveats. One of these is that you won’t fully own the car until the final payment. Essentially, PCP finance is a lease scheme. You may also be constrained by car servicing agreements and caps on mileage.
PCP contrasts with a credit union car loan which is available to people both purchasing a new and used vehicle. With credit union car loans you own the car from the start. You can drive it as much as you want with no mileage caps. Read more about the difference between the two loan types on our blog comparing credit union car loans vs PCP.