5 min read

6 ways to cut down the cost of buying a new car

Hannah Patnick
13 March 2017

Ever wondered how on earth you’ll be able to afford a new set of wheels? Well, it’s not easy. But we’ve come up with 6 tips that could help towards lowering the cost of your new car.

1. Have a price in mind before you head out

Just because you’re borrowing money to buy a car doesn’t mean you should accept the price on the windscreen. Before hitting the showrooms, check out the ‘target price’ of your dream car online and aim for something as close to this as possible.

2. Think about value for money

Certain types of cars will be better value for money than others. If you’re willing to live with a different feature or model, you could find a car that makes your money go further, even if it’s not as high a specification as you had initially planned. For example, petrol cars tend to cost less than diesel to buy; smaller engines bring the cost of the car down; and manually operated cars tend to be cheaper than automatic.

3. Make the most of dealers’ targets and pick your timing carefully

Some months are better than others for buying a new car. All dealers have targets to meet, which are usually based on their quarterly sales targets. The end of March, June, September and December tend to be good times to buy, when sales assistants are more likely to offer better rates to secure their bonuses.

Check out car finance offers suited to your credit history

4. End of the line models

If you’re not in a desperate hurry to get the latest version of a new car, there are significant savings to be made. ‘End of line’ models often boast discounts of up to 30% on the original price.

5. Your credit score can get you a better car finance deal

If you’re planning to buy your car using credit, your credit score comes into play. Generally speaking, the higher your credit score, the more likely it is you’ll be accepted for car finance, and at the best interest rate. So checking your credit score and report regularly and taking steps to improve it, could help you make big savings on any money you borrow.

An example of how you can save some money
APR rates can vary from as low as 5% to 32% and higher when buying a new car. The better your credit score, the more likely it is you’ll secure the best APR rate. For example, the hotly anticipated Fiat Abarth 500x crossover – launching mid 2017 – is set to be a popular choice for Fiat fans with a passion for speed. However, the £25,000 price tag could cost someone with a low credit score an extra £18,967 in interest repayments over a five-year loan period compared to someone with an excellent score.*

6. Planning ahead

One other way to try and cut down on the cost of car finance is to choose the car you want a few months in advance. This way, you can start to plan (and improve) your credit worthiness before you go anywhere near a forecourt.

Generally speaking, the more time you have to improve your credit score the better. There are always quick things you can do to boost your score, but not every change you make will have an instant impact. So the more time you have to work on your score the better.

Our [5 minute monthly checklist] will help you get into the habit of regularly checking your credit score and report.

SOURCES: *Based on one of ClearScore’s car loan partners CreditPlus’s estimations of what APR you are likely to be offered based on your credit score, with a 10% deposit on a £25,000 loan over five years

In a nutshell:
  • know what you want to pay before you hit the showrooms - this way you have a target price to aim for
  • think about going for 'value for money' features
  • buying a car in March, June, September or December could help you get a deal
  • try to get your credit score is in top shape to give yourself the best chance of getting the lowest interest rate on a car finance plan
by Hannah Patnick

In her previous life Hannah was a consumer journalist making primetime television shows. Now she's ClearScore's Content Producer. Amongst her many talents, Hannah is famed for her excellent tea-making skills.

ClearScore exists to make your finances simple.
We offer a free service where you can handle everything to do with credit in one place. In your ClearScore account, you can see your credit score and the full details of your credit report. Your credit cards, mortgages, mobile phone contracts, loans, overdrafts and utilities all on the record. Our goal is to make ClearScore as simple, calm and straightforward as possible. Money is stressful enough.