I need a new car! What are my options?
Are you in the market for a car but feeling overwhelmed by the process? Don’t worry; you’re not alone. Buying a car can be a major purchase and can feel like a daunting task, especially if you’re not familiar with the process. However, with a little bit of research and planning, you can make the car-buying process a lot easier.
In this beginner’s guide, we’ll cover helpful tips and information that you need to know to save money and buy with confidence.
Determine Your Budget
It is essential to understand how much you can afford before you even start researching cars and finance options. Purchasing or leasing a car is a massive financial cost. Understanding exactly how much you need to have the correct financing to support this purchase is essential. Beyond thinking of the total price, it is important to remember other costs linked to the car. For example, insurance, tax, repairs, and petrol. If you are struggling to determine your budget, we advise you to use our budgeting tool to get started.
Research Your Options
The next step is to understand what your options are.
There are many things to consider when purchasing a car. Is it more cost effective to purchase a used car over a new one? Would a used car need repairs or tyre changes? When it comes to used cars, they can be cheaper than a new one. However, there could be underlining issues that may need to be looked at by a mechanic.
It’s important to note what type of car are you searching for. A small car may be cheaper, however, if you have a big family that won’t work. It is all about considering your lifestyle and what suits you best. It is important to note that cars with larger engines are often more expensive to insure. When you have considered all of these thoughts, you have to now look into the reviews and ratings of different cars. Reliability is key. If reviews are raving about the dependability of the car, that is good to note.
Are you planning to buy from a dealer or a private individual? Many people will have a car they want to sell in a personal capacity. You could be getting a good deal, but it’s important to consider your consumer rights. The CCPC has a helpful guide on buying a car from a dealer or a private seller and what to consider.
Financing Your Car
You have determined your budget for spending on a car, and you have done your research on which car would suit your day-to-day. Now it is important to talk about financing the car. When it comes to financing your car, there are several options to consider.
- Personal Contract Plan: PCP is a hugely flexible form of car finance as it allows you to set a deposit and monthly rental that suits your needs and gives you 3 different options at the end of your agreement:
- Pay the final payment or re-finance it (subject to lending criteria) and keep your car. It is only at this point that you will own the car.
- Hand back the car and make no further payments.
- Trade in the car against a new one: It’s important to read the terms and conditions of a PCP agreement. Typically, a PCP agreement will have limits on the mileage you can cover in a year and that you must have the car serviced with a registered brand dealer, to name just 2. The dealer may charge you penalties if you do not comply with these terms and conditions
- Hire purchase is a way to finance a car in which there is an agreement whereby a person hires goods for a period of time by paying instalments and can own the goods at the end of the agreement if all instalments are paid.
- Under a hire purchase agreement, the consumer does not actually own the goods until the last instalment is paid, although he or she has full use of the goods throughout the repayment period
- Car leasing is a form of finance which allows you to hire a brand-new vehicle for a certain timeframe, known as the ‘lease term’. As the lessee* you are responsible for insurance costs and keeping the car running, but you will never own it
- Personal Loan: You borrow a set amount of money, usually between €2,500 and €25,000, over a set number of years, typically between three and five years, although you can get longer-term loans.
*Lessee – a person who holds the lease of an item or property
Shopping for Your Car
When shopping around for a car, there are important things to keep in mind.
- It is necessary to check the dealer’s reputation. Check their reputation online to ensure that they have good reviews and are trustworthy. A friend or family recommendation is helpful, too, to help you start looking at dealerships.
- Always be sure to bring your driver’s license to ensure you can test drive a car at the dealership. There are certain things to note when you test drive a car, which the AA has listed on their website.
- Inspect used cars for any notable damage, both internal and external. If possible, try to hire a mechanic to have a scan of the vehicle before purchase.
- When buying a used car, you have the choice to buy from either a dealership or a private seller. A dealership is often considered more reliable as it can be researched beforehand to ensure that it is a reputable business. However, if someone was to purchase a car from a private seller, the Citizens Information page on buying a car has a list of things to note to ensure the safety of purchase.
- When closing the deal, if the car you are purchasing is second hand make note of any visible damage so that you can haggle for a lower price. Respectfully, try to whittle the price down as much as possible. It is important to remain friendly. However, do not be friends with the dealer. The Credit Union hosts a page that explains the ins and outs of closing a deal.
When purchasing a used car, make sure they have all the necessary documents – National Car Test (NCT) Certificate (if the car is over 4 years old), and Vehicle Registration Tax (VRT) Certificate (if it is imported). Ask the dealer/seller for the car’s service book and manual. If you are purchasing from a dealer, they will deal with the registration paperwork. However, if you are buying from a private dealer, you have to visit the registration office.
Shop around for insurance. It is essential to research all of your options as you may find different insurance companies will offer different prices. Legally every driver must possess the minimum cover of insurance, Third Party. Once you have purchased your insurance, you are good to go!
Buying a car can seem like a daunting task, but it doesn’t have to be. By following the steps outlined in this guide, you could save money and make a well-informed decision when purchasing your next car. If you have any further questions or need assistance with financing, please reach out to MABS. We are here to help you every step of the way.
If you’d like to do some additional reading or learn more about budgeting for a car, visit our page, Planning for Buying a car
If you would like some support, advice or help, please reach out.
For any query on car financing or a general money, budgeting or debt-related query, you can call the MABS National Helpline on 0818 07 2000 Monday to Friday, from 9am to 8pm, WhatsApp 086 035 3141 or find the contact details for your local office.
Don’t forget to follow us too at @MABSinfo – Facebook, Instagram, or Twitter.
Disclaimer: While every effort is made to make sure this information is accurate and correct, we strongly recommend that you do your own research and make your own informed decision.
Note: We welcome references to and use of the content in this blog. However, please reference MABS and link said content if you choose to do so.