6. Should I still consider hire purchase?
Not all of the cars we looked at were cheaper to buy on PCP deals. We compared the manufacturer PCP and HP deals for two of our favourite new cars: the Hyundai i10 city car and the BMW 5 Series saloon.
On a 36-month deal, the i10 worked out £239 cheaper and the 5 Series £892 cheaper overall on HP. So, if you know you want to keep the car at the end of the finance term, HP is still worth considering. An important element in the overall cost of these finance deals is that the APR rate is the same for HP and PCP.
There are other advantages to buying on HP, too. PCP deals have an annual mileage limit and a fee per mile if you exceed it. If you do 1000 miles more than was agreed in the PCP deal on the 5 Series, it’ll cost you £98. In contrast, if you buy on HP, there’s no limit on the miles you can drive and no extra fee.
Want a new car that’s as cheap as chips? See our best new cars for the price of a train ticket
7. What about other forms of finance?
Don’t simply opt for the finance deal that the dealer is offering. Personal loan rates are at historically low levels – some as low as 2.8% – so it’s worth investigating these if you’re interested in buying a car outright.
If you simply want the use of a car, however, and want to replace it every two or three years, a personal lease is cheaper than HP, albeit still pricer than PCP in the examples we looked at. The monthly payments for a 5 Series in 520d SE spec for three years, with a deposit of £4022 and annual mileage of 9000 miles, are £878 on hire purchase, £595 on a personal lease and £449 on a PCP.
We also checked out personal leasing deals for other models and found that some worked out cheaper. We found an Audi A3 Sportback 1.4 TFSI 150 Sport for £281 a month and a Seat Ateca 1.4 EcoTSI 150 SE for £203. Both are significantly less per month than you’d pay on a three-year PCP deal, although you won’t get the option to buy the car at the end of the term.
For the best prices on the market, check out our car leasing deals
8. What next?
Now you’re in a good position to start looking at cars that meet your criteria, so you can make a shortlist. Whatcar.com has some helpful articles that list the five-star cars you can get for different monthly payments. You’ll also find our in-depth online car reviews ideal for helping to pin down the best car for you. You should also use our website’s detailed information to find out which models and trim levels have the equipment you want as standard or if you’ll need to pay extra for it.
Once you’ve chosen the exact car you want, you can use whatcar.com’s new car buyer marketplace to find which dealers in your area will give you the best price, and then to start the purchasing process.
9. Get behind the wheel
We recommend that you should always take a test drive before signing on the dotted line, because it’s the only real way to find out if a car has the performance and practicality you want. In fact, it’s best to book test drives of your top three potential purchases at local showrooms so that you can compare. Some dealers offer extended test drives, overnight or even for a weekend, so it’s worth asking about this.
It’s important to drive a car with the engine you’re considering buying; drive a more powerful one instead and you might be disappointed when you get your new car. Also be aware of which trim level your test car is and what’s been added to it, because dealer demonstrator cars are often specced up with lots of options.
During the test drive, try to go on as many different types of roads as you can and make sure that you’re able to get in and out of the car easily and find a comfortable driving position.
If you’re going to be using child car seats or carrying a pushchair, take these with you so you can be sure they fit. It’s also a good idea to take your family along so that you’ll know if the car suits them as well.
Need to replace a child car seat? Read our guide to get the safest seat
10. Do the deal
Once you’ve made up your mind on a car, you’re ready to negotiate a great deal. Use What Car?’s Target Price as a gauge of how much discount you should be getting and ask the dealer to match it.
And if you have a car to part exchange, find out how much it’s worth using What Car?’s free online valuation tool. If you’re buying on finance, it’s a good idea to take the paperwork away to read it in your own time, rather than feeling pressured into signing it straight away. Also, don’t forget to arrange car insurance ahead of the day you take delivery of the car.
Finally, when you’re doing the handover for the car, make sure you check it’s the right spec and has all the options you ordered. If you’re not happy with anything, inform the sales staff and get it noted down before you drive home.
Read more – Top 10 new cars for less than £200 a month
Read more – What is GAP insurance and should you buy it?
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