Buying a Second Hand Car
11 February 2016
Buying a Second Hand car
Buying a second hand car is an exciting business, particularly if it is your first car, and you are new to driving. Your experience in buying is clearly below standard and you need a few tips to make sure you get a great buy.
There are three areas to consider, they are from a private buyer a trader and an auction. You will have far more rights buying from a trader.
If you’re buying from a trader (a business that sells cars) you should:
- look for an established firm with a good reputation and plenty of social proof
- look for a trade association sign or a sign that says they follow the Motor Codes code of practice – this means you can act through a trade association if something goes wrong
- look for a trader whose cars have been inspected by an independent engineer or motoring organisation
Buying from an auction
Auctions are probably the riskiest way of buying a used car. You probably won’t have the legal protection that you have if you buy through a trader (eg the right to returns and refunds).
Make sure you read the auction house’s terms and conditions of business carefully before making a bid.
Check a car’s history
Doing some simple checks will reduce your chances of buying a car that’s being sold illegally or has had major repairs. You can also find out if the current owner still owes money on the car.
It doesn’t take long or cost much. You should consider doing this no matter who you buy from.
1. Check the car’s details with the DVLA
Ask the seller for the car’s:
- registration number (on the number plate)
- MOT test number
- make and model
2. Check the MOT and history
Vehicles need regular MOT tests to make sure they’re safe for the road. You should check that MOT tests have been done regularly throughout the car’s history (most cars over three years old need an MOT test every year).
Ask the seller about any gaps in MOT - don’t continue with the deal if you’re suspicious of the MOT history. A car might not have needed an MOT if it was unused for a period of time and was registered as SORN (a Statutory Off Road Notification).
3. Get a private history check
It’s a good idea to get a private history check (sometimes called a ‘data check’) on the car – this will give you valuable information about serious problems the car might have. It will cost up to £20.
It will tell you if:
- the car has been reported stolen
- the seller still owes money on the car
- the car has previously been in a serious accident
- the car is showing the correct mileage
- the car has been written off and returned to the road
You can get a car history check from any of these websites that check vehicle details:
Inspect the car and take a test drive
You should arrange to view the car in daylight, preferably when it’s dry – it’s harder to spot damage to the car if it’s wet. It’s a good idea to meet at a private seller’s house so that if something goes wrong after you’ve bought the car you’ll have a record of their address.
The AA has a useful checklist for what to look out for when inspecting a used car and its paperwork. Make sure you ask about the car’s service history.
You should definitely take the car for a test drive. You’ll need to make sure you’re insured to do this. If you have your own car insurance, check with your insurance company to see if you can drive someone else’s car. If you don’t have insurance, a trader or private seller’s insurance might cover you – you’ll need to ask them.
Don’t test drive a car if you’re not insured. You’ll be liable for any damage you cause and you could lose points on your licence.
Drive for at least 15 minutes on different types of road. The AA has a checklist for what to look out for when taking a test drive.
If you’re still not sure – get an independent report
If you’re still not sure at this stage, it’s probably a good idea to look for another car.
However, you can go a step further and get an independent report on the car. This will give you detailed information about the car’s condition, but will cost around £100 to £200.
Independent reports are done by motoring organisations and specialist companies – call Motor Codes for advice on where to get an independent report in your area. Motor Codes is a government backed self-regulatory body for the motoring industry.
Telephone: 020 7344 1651
When you buy the car
Don’t be afraid to haggle on the price – start low and let the seller work the price up. Stay calm and only pay what you can afford. Remember you can simply stop the deal if you feel like you’re being pressured into paying too much or buying additional features.
Make sure you get the original (not a photocopy) of:
- the log book (the V5C registration certificate)
- proof of a valid MOT
Never buy a car without the log book.
The seller can’t legally transfer any car tax that they’ve already paid over to you (the rules around this changed recently). You’ll need to pay vehicle tax as soon as you buy the car. The seller will get a refund for any tax left on the car when it’s sold.
Ways to pay
There are things to consider when deciding how to pay for a used car.
Consider all your options before getting finance or a loan for a car. It can be an expensive way to pay, and you'll need to make sure you can realistically afford the repayments.
If you pay by cash
- there are no extra fees or interest
- sometimes you can get a discount for paying cash
- if something goes wrong with the car you won’t have the protection that some credit arrangements offer
- you might not feel comfortable or safe carrying cash, especially if it's not a cheap car
If you use a debit card
You might have protection from problems if your card provider has a ‘chargeback’ scheme – contact your bank for more information.
If you use a credit card
- you can be flexible with making larger payments when you can afford them
- you’ll get protection for goods costing between £100 and £30,000, even if you only paid for a small part of the cost on credit card
- the interest rates on credit cards are often much higher than a finance arrangement
If you pay using an electronic transfer
- your bank will have an upper limit on the amount you can transfer directly to someone else's account
- you can pay with a CHAPS payment but there will be a charge
- if you're buying from a private seller they may not feel comfortable giving you their bank account details
If you pay using finance arranged by a trader
- you’ll have to pay extra for interest, so this will be more expensive
- this can help you get a car if you don’t have all the money up front
- you might have extra protection if there’s a problem later, because you can take action against the finance company as well as the trader (or instead of the trader)
If you pay using finance you’ve arranged yourself
- you’ll have to pay extra for interest, so this will be more expensive
- this can help you get a car if you don’t have all the money up front
- once you have the money from the finance company, you can pay by debit or credit card to get extra protection
- if there's a problem with the car, the finance company won't have any responsibility for helping you solve the problem
Buying a car through hire purchase
- you don’t own the car until the last payment is made
- you’ll have to pay a deposit – usually about 10% of the value of the car
- there will be a fixed monthly cost – so it’s easier to budget
- the car can be repossessed if you can’t keep up the payments
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 at 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.
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.
Check CO2 emissions, as it affects the duty you pay. Buyers of the most polluting cars pay the most road tax.
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 4x4 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).
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.
'What car do I need?' checklist
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.
'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.
- 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.
- 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).
- 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.
Make sure that you arm yourself with the cheapest web prices and make dealers compete for your custom.
- The beginner's haggle – get them to chuck something in for free. Dealers often say they're not allowed to give discounts but if you're new to haggling, an easy start point is asking them to throw something in on top. Whether it's free sat-nav or floor mats, if you need an add-on, try not to pay extra for it.
- Look for already-discounted cars. If the price is already reduced, there's often more flexibility. The boundaries have already been flexed and the psychological loss for the salesperson is reduced as they've already given up on the idea of getting full price.
- Don't fill the silence. As negotiations come to a close, a classic sales technique is staying silent. They want you to accept the price just to fill the awkward silence. Make them fill it with a cheaper offer.
- Walk away - get them to call you back. Psychologically, if they have to chase you, rather than you being super keen, is more likely to lead to a better deal.
- Flaws mean discounts. Look for the tiniest of dents or scratches. This makes them more difficult to flog, but still perfectly nice to drive. Keeerching!
- Play them off against each other. This is covered in the point above but worth mentioning again. To really up the haggling, don't target dealers in isolation. Try to play off a number against each other. This has two advantages: it gives you a solid foundation and it prods their competitive instincts in your favour, as they want to prove they're better than the opposition.
- Be friendly, but firm. You're more likely to get a result if the staff member empathises with you. If you're polite, charming and treat the whole process with humour, you'll get further.
- Watch for the "whack-a-mole" effect. Haggle on the price of the car, and the dealer might then charge more for the finance. Haggle on the finance, and there might be no wiggle room on the price of the car. It's worth doing your sums to see how much each saving from haggling will be – and taking the most valuable.
- Ask for the sun and you may just get the moon. Remember, do it with humour, do it with style and there's no price or suggestion too outrageous. You can haggle virtually anywhere for anything.
Never sign on the day – walk away. You'll start getting phone calls/emails the following days with better deals.
If you're buying privately, it never hurts to make an offer. The worst they can say is no. And even if you walk away then, the seller could call you back if there's been little further interest.
'How to inspect the car' checklist
It's not just about rocking up and liking the look of the car – instead you need to look at everything, from the paintwork to the tyres, seatbelts and headlights. Make sure you follow our nine things to check:
- Check the car’s mileage. The average covered is around 10,000 miles a year, so if the odometer’s figure appears wildly out for its age, ask why. If the answer doesn’t stack up, be suspicious. Crooks may have ‘clocked’ the odometer. You can also check the last service for the mileage to see if this is in line with the figure.
- Overall condition. Cast a beady eye over the car’s condition, crouching down to look for scratches and dents.
- Check repairs. See if there are any signs of poor repair, such as gaps between body panels after crash damage.
- Check the oil. Do this by lifting out the dipstick to see if the level's correct.
- The engine. Look at the engine for signs of oil or water leaks, as well as the surrounding parts – and look under the car for any signs of leaks too.
- Test the radio. Plus all other gadgets to make sure they work.
- Turn on the lights! Check these work, and that you can open and close the windows easily.
- Is it safe? Vitally, does the car seem in safe condition to drive. Trust your gut – if the seats are sagging and the car looks like it’s ready for the scrap heap, continue your search elsewhere.
- What about the tyres? Check for tread and inflation.
- More economical – higher mpg
- Engines typically more robust – last longer
- Ideal for long journeys
- Cars cost more to buy
- Vehicle excise duty is cheaper on diesel cars
- Pricier parts if repair needed
- Commands higher resale values than equivalent petrol models
- Fuel is oftenmore expensive in the UK
- Petrol is usually cheaper in the UK
- Good for short journeys
- Engines are more responsive – suit ‘performance’ cars
- Often less reliable than diesel cars
- Vehicle excise duty is more expensive
- Cars lose value slightly faster
- Engines less efficient and use more fuel
'Test drive' checklist - the 14 things to check
Any seller should expect that you’ll want to take the car for a spin before making a decision, so use this time wisely. Testing a car isn't just about checking if it feels right. Make sure you follow our 14 things to check.
- Is your driving position at the wheel comfortable? Can the seat slide, rise and tilt? Can you adjust the steering wheel position? Can you see all the mirrors and through the windows? Can you reach the pedals, gear stick and handbrake?
- If you’ll be fitting a child car seat, will this go in easily? Or if you need to carry large items such as golf clubs, will they fit?
- Try different routes. Include the motorway if you’ll be driving on this.
- Do an emergency stop on an empty road to double check the brakes. Try the handbrake on a hill and listen for any unusual rattling or banging sounds.
- Check that the brakes and clutch function smoothly and effectively. Plus do a three-point turn to check for play in the steering.
- Does it veer? Is the car veering to one side, or does it feel balanced?
- Bonnet, doors and boot. Are the bonnet, doors and boot easy to open?
- What's the passenger space like? Will people be comfortable on a long journey?
- Boot space. If you’re likely to be carrying heavy or bulky items, will it be easy to lift them into the boot?
- Is it smooth? Does the car pull away smoothly?
- What's the power like? Is it powerful enough to pull away from traffic lights and to keep going up hills without requiring endless gear changes?
- What’s the engine noise (or any other noise) like? Are there any irritating rattles or buzzes?
- Check the suspension. How well does it soak up bumps and take corners?
- Will it fit into your space? Have you got a dedicated parking space or is it off street parking? Is th ere going to be a problem fitting the car there?
Make sure you sort out your car insurance before you take ownership of the car. Just like when you buy a property, you must have insurance in place as soon as you've become the legal owner – even if you're not driving it just yet.
This is because if anything happens to it, it's your responsibility. You might be taking extra care of your brand new car, but what if you get to the first roundabout on the drive home from the dealership or seller's home and someone drives into the back of you?
It's also illegal to drive on public roads without insurance. So make sure it’s insured before you pick up the car.
If buying from a dealer, you can ask if the car comes with any insurance. You may be covered for a week (dealers often include this), but if not you’ll need to arrange insurance before driving the car away. So always check before you pick up your car.
'Paperwork & spares' checklist – the seven things to check
When you buy a used car you’ll be given a bunch of documents, so check you’ve got the right ones before paying up.
- Logbook, or V5C. This is issued by the Driver and Vehicle Licensing Agency (DVLA) as proof that you are the keeper of the vehicle. It should list you as the registered keeper, though you may not be the owner if you've bought the car on finance.
- Servicing booklet. Check that you've got this as it will list when the car was last serviced, as well as what's been repaired/replaced.
- Manuals. Make sure you've got these. As cars get more and more technical, it's good to have manuals as a backup.
- Spares. If you were expecting a spare wheel, check it’s there along with the tools needed to change it.
- Keys. Make sure you're given at least one spare, as replacements are expensive.
- Sales contract. Make sure you get a dated sales contract showing that you've completed the deal and paid the right money. Check your name and address, plus the full details of the car, the agreed price, and any payments already made.
- Finance package. If you’re opting for finance, make sure you understand any jargon in the fine print before you sign.