New Car Buying Guide

Buying a new car is exhilarating. Whereas you may have bought used cars in the past, this time you’ll be getting a set of wheels that are genuinely made for you. With a great range of models, plus a near-endless list of options and extras, you’ll find all your must-haves are catered for. 

It’s easy to get swept up in the process of picking marques, engines and trims; but buying a new car is a lengthy and often complex process. It’s not a case of simply driving off the forecourt in the drive of your dreams. There’s lots to consider, from running costs to finance options. 

In this guide, we’ll lay out the new car buying process in simple and clear terms. By understanding what needs to happen and when, what to weigh up and how to get the right price; buying your new car will be as enjoyable as it ought to be. 

Choosing a Model

Before you start dreaming big, you need to get realistic. It’s vital you consider whether any model of car actually works for you. 

  • Consider practicality. You might love how the car looks, but think about how you’re going to use it. Is the boot big enough to cater for your lifestyle? Can you get the kids in and out easily? 

  • Consider budget. Never just jump in and snap up a car you can’t afford to fund. Once you’ve weighed up the financing options and running costs (more on those later), does this fit with your monthly budget? Think about all your other outgoings – mortgage or rent payments, credit cards, insurance and the like. 

  • Consider insurance. You’ve not bought yet, so you won’t be taking out a policy, but it won’t hurt to get a few quotes. Think about the model’s insurance group and market value. The higher these are, the higher your premium. 

  • Consider how you’ll use it. Do you use your car as a local get-around, do you have a cross-country commute, or do you road trip for pleasure? Perhaps all of the above? Try to look at models that are suited to the purpose of your driving. 

  • Consider your priorities. Everyone wants a car that looks and drives great. But what are your true priorities? If you’re environmentally conscious – don’t disregard this in favour of aesthetics. If you’ll be taking the whole family from A to B, will this car work for them as much as it will you?  

The Test Drive

When looking at new cars for sale, you’ll want to take them for a test drive before you make any decisions. You’ve probably got at least a couple of models in mind, so don’t be sheepish about heading out on multiple test drives – the best way to know what you want is to get behind the wheel. When you do hit the road, we recommend you:

  • Ask for a demonstration. Before you’ve even set off, ask your salesperson to talk you through the cars most unique and innovative features and how to use them. You don’t want to miss anything. 

  • Make adjustments. Feel free to alter the seat and steering wheel position or you won’t get the full experience. You simply won’t enjoy driving a car that doesn’t fit you.

  • Change up your drive. Don’t just circle around on your local A roads. Get a feel for the car on everything from motorways to country lanes. 

  • Bring a partner or friend. It’s always good to get a second opinion, and an idea of how the car feels from a passenger’s perspective. 

  • Take your time. Don’t be pressured into thinking you have to get the car back to the forecourt after a couple of trips around the block. Give yourself time to get used to driving this new model.

  • Trust your intuition. Only you can know if the drive feels right. Is the steering responsive? How do the brakes feel? Does it sound like it should to you? Listen to your senses. 

You’ll find test drives available on new cars at retail centres right across the country. At Inchcape, we’re delighted to offer our tailored ‘Drive it Your Way’ experience, which can be booked online at your nearest centre today. 

Finance Options

When you buy a new car, there’s a whole range of finance options to choose from. Some are aimed at private customers, other business customers, and some can be used by either. When looking for new car deals, consider what best suits your budget and how long you intend to own the car.

  • Personal contract purchase (PCP). This is a very popular option for finance cars. In short, you put down a deposit and agree a contract length and mileage allowance. From this, the car’s value at the end of the contract is estimated – this is the ‘projected value’. This is offset until the end of the contract, and the balance (plus interest) is divided into monthly instalments. 

Come the end of the contract you have several options. Either pay the projected value and take ownership, use any of the equity as the deposit on your next car, or simply hand the car back.

  • Business contract hire. This rental plan caters for business drivers. You agree your rental term and mileage allowance, then put down the deposit – the more you put down the smaller your monthly payments. When your contract is up you simply hand the car back. It’s handy for businesses as there’s no obligation to buy, and can include the cost of maintenance in the monthly payments.
  • Hire purchase. This is the most traditional form of financing. You simply put down a deposit and agree a term, then pay off the balance in fixed monthly payments – just like a mortgage. Once you’re done paying, it’s yours to keep. It’s useful as there’s no mileage limits when you choose this option. 

  • Balloon hire purchase. This works in much the same way as hire purchase, only that a significant ‘balloon’ final payment is due upon completion of the arrangement. This means your payments while the contract is active are much smaller. You can’t simply hand the car back, you are obliged to make the payment.

  • Advance payment plan. This is aimed at business customers who would like to own their vehicle outright, who could be cash buyers, but would rather defer some of the cost. With this type of plan, you agree a contact length and mileage allowance, and a guaranteed future minimum value (GMFV) is calculated, but there are no monthly payments. The GMFV is set aside but the remaining value is paid up front. Come the end of the contract, you either pay the GMFV or hand the car back. 

Running Costs

  • When buying a car, it’s important you consider what it’s going to cost to run and keep on the road, and not just your purchase or finance arrangement costs

Standing charges are things you must pay for simply for owning a car, regardless of whether you use it. These include:

  • Insurance. You are legally required to have car insurance, unless the vehicle is off-road at all times or declared SORN. You can choose from third party, third party fire & theft, and fully comprehensive cover. How much it will cost you is largely based on how much of a risk you’re perceived to be.

  • Road tax. For new cars, a new tax payment structure was introduced on 1st April 2017. How much you’ll pay in the first year depends on how much CO2 your car produces – anything from £10 to £2000. After that, you’ll pay at least £130 a year, unless it’s an electric car in which case you’re exempt. Find our more on the GOV.UK website >
  • MOT. Your car is legally required to pass an MOT each year after its third birthday. How much you’ll pay for this can vary greatly, but as you’re buying a new car you’re unlikely to encounter any major problems over the next few years

Then there are costs relating to the use of your car. These will vary based on where and how often you drive:

  • Fuel. The size of your fuel bill will depend on how much time you spend driving. The fuel efficiency of your car and what fuel it uses will also be factors – but once you’ve chosen your car you should be able to make a fuel-cost estimate based on these. 

  • Replacement costs. Should your car be damaged in any way, you may well incur replacement costs. If it’s due to failure of the hardware itself, replacement parts or a replacement vehicle may be provided under warranty. If you’re involved in accident and need replacement parts, you’ll need to claim on your insurance and pay any excesses. If you choose not to claim on your insurance, and the problem isn’t covered under warranty, you’ll need to pay any replacement costs in full yourself. Some vehicles will need parts replacing at particular mileages, so you should take this into consideration.

  • Servicing. As your car is new, you’re unlikely to incur these costs in your first few years of ownership – but anything can happen. Many new cars will be offered with service packs, contributing to or covering any servicing that’s required within a particular timeframe after purchase. It’s worth asking your dealer if this option is available for your marque and model. 

How to Save Money

It can seem almost impossible to weigh up purchase and financing payments, standing charges and running costs. There’s no easy answer, but if you’re looking to bring your price down there’s some general rules of thumb to follow:

  • Petrol cars are usually cheaper than diesel. Many diesel cars boast being the more economical option, but that doesn’t always translate into money saving. They tend to cost more to buy outright, and then a touch more each time at the pump too.
  • Lower emissions means less road tax. In your first year, your tax payment is based entirely on your cars emissions, and can range from as little as £0 to as much as £2000. After that, things are fairly straightforward; £0 for electric cars, £130 for alternative fuel cars and £140 for petrol and diesel each year. That’s unless your car’s list price is over £40,000. If it is, you’ll pay an extra £310 for five years. It’s worth taking this into consideration if you’re looking at vehicles around the 40K mark. 

  • Hybrids are cheaper to run, but more to buy. Because of the sheer amount of technology included in modern hybrids, their purchase price is usually higher than corresponding petrol and diesel models. That being said, along with electric they’re the most economical car, and tend to hold their value well. This makes them ideal for those who don’t mind a larger upfront cost but want to enjoy cheaper running costs thereafter. 

  • Smaller cars tend to be cheaper to insure. All cars are given an insurance group – a number between 1 and 50. This is calculated based on performance, safety features and parts costs. Generally, this results in smaller cars coming in between 1 and 10 – the cheaper groups – while SUV’s occupy much of the higher groups. These littler models tend to be the cheapest new car to buy too. Check your desired model’s insurance group here >

  • Smaller engines can save you money. Generally, a larger engine in the same model will burn through more fuel than its smaller siblings. Though it’s important to consider how you’ll use the car. If you’re car’s just going to be a means of getting about town, a smaller engine is ideal. But if you’re going to spend most of the time powering across the country on motorways, a larger engine is better suited, as a small engine will have to work overtime to do this – and burn much more fuel in the process. 

  • Manual is usually cheaper than automatic. If you’re really looking to save on the upfront costs, you may want to consider a manual car. But you should bear in mind that manuals can be less efficient, depending on how you drive, while automatics are optimised to know what gear they should be in.


Before you pay up, it’s important to check you’ve got all your important documents together. You’ll acquire these throughout the buying process, so make sure you’ve got the following:  

  • Finance package. If you’ve chosen a finance agreement, make sure you’ve got the relevant documents and have read and understood them thoroughly before you sign. 
  • Logbook/V5C. This is issued by the DVLA and acts as proof that you are the keeper of the vehicle. Remember that while you should be listed as the keeper, if you’ve bought the car through a finance package you may not be listed as its owner. 

  • Servicing booklet. This will be empty, because the car is brand new. But you may be given this for future use, to keep any records in. 

  • Car manuals. Cars are becoming more complex than ever, so make sure you’ve got the correct manuals for your vehicle to hand. It’s a good idea to have given these a good look through before you get behind the wheel. 

  • Sales contract. Be sure that you’ve received a sales contract, that’s dated and shows you’ve completed the deal and paid what you owe. Check that all your, and the car’s, details are correct. 

Post-Purchase and Delivery Checklist

So you’ve finally payed up, agreed your finance plan and the car’s on its way. But there’s still plenty to be doing and thinking about. Here’s what to remember during the last stage of your new car buying process. 

  • Agree on a delivery date. Once your agreement is made and your car ordered, you need to set a delivery date. It’s unlikely you’ll be able to drive away and on the same day as you buy. If it’s being built to your specifications you may need to wait weeks or months. Agree on a date with the dealer, and contact them regularly to check everything’s still on track. 
  • Get insurance. It’s vital you have car insurance in place before you take delivery of your vehicle. The minute it’s delivered you’re responsible for it, and anything that should happen thereafter. Shop around and find the best deal, ensuring it caters to your needs. 

On delivery day:

  • Get together all your documents and check them over. These include the manuals, service booklet and logbook.

  • Inspect the car thoroughly. Take plenty of time to check it over, inside and out. Make a note of anything at all that isn’t quite right, even the tiniest of scratches. Check all the paintwork, and focus on the lines and gaps around the panels to see that they’re properly fitted. Inside, check everything from seams on seats to the fit of the dashboard. If there are any faults, inform your dealer.

  • Check the mileage. Unless your car had to be driven to the dealer, this should be less than 20 miles. 

  • Ask questions. Get your dealer to show you any features or fittings you haven’t quite got to grips with. Make sure you understand the car’s service schedule, and what you need to do to maintain it yourself. 

    And there you have it. All the work’s done and you free to finally get behind the wheel of your brand new car. 

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