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Buying a new car: the basics

Buying a new car: the basics

There are lots of things to think about when buying a brand-new car. From when and where to buy a new car, to whether you’re insured to drive a new car home, we cover your car-buying questions. 

Daniel Hutson
From the Motor team
4
minute read
posted 9 SEPTMEBER 2019

A nation of new car buyers 

In the UK, buying a brand-new car is almost a national pastime. It’s so important to us that figures for new car registrations are often used as a barometer for economic confidence. You think things are looking rosy for the next year? You treat yourself to a new car.  
 
That said, in 2018, the Department for Transport registered 2.3 million cars, down 6.7% from 2017. Sales of new diesels declined by 30%, while petrol car sales were boosted by 9%. For the first time, ULEVs – ultra-low emission vehicles – were winners with a 20% increase on the previous year. So is buying a new car still attractive? 

Pros and cons of buying a brand-new car 

There are advantages to buying a new car: you’ll get a new model with the tech and spec you want, a full warranty and you won’t need to get an MOT. 
 
The main problem with buying a new car is depreciation – the difference between what you paid for the car when brand new and its resale value a few years later. Depreciation is typically about 20% a year for the first three years.

The best way to buy a new car 

If you have a lump sum from savings or a windfall, then it could make sense to buy the car outright, as you won’t have to pay interest on a loan. But if you’re prepared to budget over a few years, then there are a number of car financing approaches that you can take.  
 
These include personal contract purchase, hire purchase, buying with a personal loan and buying on a credit card. 

When to go shopping for new car deals

It’s often said that the best time to buy a car is at the end of June and December. This coincides with when car salespeople are closing in on their quarterly sales targets. The other quarters end in March and September, but experts often advise avoiding buying at these times as this is when new number plates are introduced.

If salespeople are yet to hit their targets, then they’ll be eager to do a deal. They might offer to match your deposit on a new car, upgrade the model for the same price or throw in a free manufacturer’s warranty.

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Where to buy a new car 

An alternative to visiting car showrooms is to buy online. This is where you might find some of the cheapest new car deals, especially if you’re buying a pre-registered car (usually one that the intended owner has cancelled the order for) or if you look for an ex-demonstrator model.  
 
Several major car manufacturers now offer extensive online services, from configuring the car and booking a test drive, to buying online. 

Taking your new car home 

You need to be insured to drive a car at any time – including on a test drive – so making sure you’re covered for getting your new car home from the forecourt is essential. Many dealers will include this cover (which lasts for around seven days with the sale of a brand-new car), but make sure this is the case.  
 
If cover isn’t included, you’ll need to get your own temporary car insurance – also known as drive away insurance. This can cover you for up to 28 days.    
 
When you buy a new car, you must tell your current car insurance provider – if you have one. Typically, you won’t be covered to drive a different car under your current policy. 

Buying a new car is also an opportunity to review your current car insurance. Depending on any fees, it might be worth cancelling your current policy and shopping around for a better deal.

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