How to buy OR find a cheap used cars - must read tips

Over the last ten years I have spent a small fortune on cars. As soon as I have bought one I find myself thinking about what’s next.

And the good news is that my next motor could be pretty cheap. That’s because used car prices have tumbled in recent months – thanks to a combination of the credit crunch and record fuel prices. And while fuel has dropped from the high of 120p per litre in July to around the 85p mark, car prices have not rebounded. So if you are looking to change car, now is a great time to buy second hand.

So here are three tips to help you get a good used car deal.

1) Un-cool is cool, but don’t go ugly early

If a car was un-cool originally, by the time it is resold the price will have plummeted. These are the ones to get if you are not so bothered about image, and simply want a decent car.

In fact, you can get a decent un-cool car for £3k or £4k. And you are not looking at something that old either. In a quick search of cars priced at less than £4k on Auto Trader, I found more than 10,000 that have less than 40,000 miles on the clock and are less than 5 years old. They won’t all be good cars, but a good proportion will be.

Be careful though. When you’re buying a car that is less than cool, don’t buy it when it is new or nearly new. Do this and you will lose out. It doesn’t matter how good the deal looks – the price will still have a long way to drop one or two years down the line.

2) Buy cheap, buy twice.

Don’t buy a car on price alone. It’s easy to look at the small ads and go for the lowest cost option. It may be a very decent car, but make sure you check these vital points first:

A) History: Is it too good to be true? Make sure the card hasn’t been crashed or stolen and that the mileage is genuine. Cartextcheck.co.uk will do a basic check via your mobile for £3; I have always used HPicheck.com. This excellent service costs £20.

B) Next service date: Check when the last service was and when the next one is needed. The cost will depend on the car and which service it is. Look the model up on parkers.co.uk to find out the service intervals. A quick call to the dealer will let you know the approximate cost of a service. If the car is getting close to 60,000 miles, ask when the cam belt needs changing as this can often be an expensive job.

C) Tyres : The cheapest set of tyres for a small car will set you back at least £100, for a medium saloon with ‘branded’ tyres you are looking at £250+, so if the tyres are not great, take this into account when you negotiate the purchase price.

D) MOT – If a car has a short MOT, you may get caught out if it needs work. Add to that the £40+ for the MOT and you could be looking a quite a bill.

E) Tax – 12 months tax on a mid-sized saloon will cost around £200, down to £0 for the very smallest ‘green’ cars. If there’s no tax paid on the car, take this into account and drive down the purchase price.

On top of these points, make sure you add your time into the equation. If you have to take a day out to get tyres, tax and an MOT , it will also cost you a day of holiday, or valuable weekend time.

3) Keep an eye on running costs

So you have got a real bargain. The car has been serviced, has decent tyres and so on. But before you commit, make sure it won’t hammer you on the road. Check out:

A) Future tax banding – Car Tax will increase very slightly from April 2009 for an average vehicle, and then by around £20-£25 from April 2010. Parkers.co.uk has tax prices by model. If you go for something really polluting, you could be looking at £455 per year!

B) Fuel economy – A massive proportion of any running cost. The price of fuel has come down, and it looks like it will stay down for a while, but 85p per litre is still not cheap. Make sure you know the miles per gallon, how many miles you will do annually and budget accordingly.

C) Insurance – Get a quote before you buy, and make sure you don’t take the first quote. Our online car insurance search engine will take about 5 minutes to search up to 400 policies; the saving could be the most you will earn in 5 minutes.

In part two I will be looking at where you can shop around, whether you should buy petrol or diesel, and how being clever with your financing could save you hundreds.

I’m also going to put my money where my mouth is. My Porsche is up for sale and I’m going to get a replacement for less than £5k including insurance, finance and maintenance. I’ll let you know how I get on. Until then drive carefully.

Thanks: lovemoney.com & google pics

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Top ten money saving tips when buying or running a used car

Everyone is having to deal with the reality of life quickly becoming increasingly more expensive, so we're all on the look out for creative and effective ways to save money. Saving money does not have to be difficult- there are dozens of small and easy methods that make a big difference to your pocket book. Here are the top ten tips to help you save money when buying ore running a used car.

1. The price of petrol

Petrol has been a pressing issue on our car finances for a while, with the cost of a litre of petrol often peeking over a pound and the cost of diesel often peeking well-over a pound it's important to consider some fuel saving tips.

For someone who spends roughly £50 a week on fuel, this 20% efficiency increase would save around £500 a year. And, according to the RAC, boy racers can expect annual efficient driving gains to be up to 60%

• Find the cheapest petrol – to find the cheapest petrol prices in your area visit www.petrolprices.com. This brilliant website is free to join and has over 10,000 UK petrol station prices updated daily to tell you which one is the cheapest in your area. Simply sign-up, entre your postcode and away you go!
• Another website is www.findcheappetrol.com which again uses postcode searches to find the cheapest petrol stations near you.
• There are significant savings to be made by using these sites. You could save as much as 10p a litre on unleaded petrol, and 15p a litre on diesel.
• Try saving money whilst you shop. Supermarket promotions are an easy way to save money on your petrol.
• Did you also know that if you buy your petrol when the temperature is cooler, such as in the early morning before work, it becomes denser in cooler temperatures, and as petrol pumps only measure the volume - and not the density, you'll get overall more for your money by purchasing petrol when it is cool outside rather than in the heat of the day.

2. Less speed more haste!

As soon as you apply more pressure on the accelerator you are using more petrol. Try using these driving techniques to help you avoid using too much petrol and reduce CO2 emissions.

It's possible to drive the same distance in the same time, yet use considerably less fuel. You can chop up to 60% OFF your fuel costs without cutting your top speed. It's simply about driving more smoothly to boost your fuel efficiency.

• Accelerate gradually without over-revving.
• Speed up smoothly; when you press harder on the pedal more fuel flows, but you could get to the same speed using much less power – a good rule is to stay under 3,000 revs
• Drive in the correct gear.
• Always drive in the highest gear possible without labouring the engine.
• Slow naturally. Rather than brake all the time, let your car slow naturally and use its stored momentum.
• Think about road position.
• To do all this takes road awareness, so the more alert you are, the better you can plan ahead and move gradually.

3. Compare insurance quotes

Insurance quotes can vary dramatically for your car, so it is definitely worth shopping around for Insurance premiums. Therefore start by deciding what cover you want and ensuring you're as low a risk as possible so that you get the best deal.

• Try a price comparison website like www.moneysupermarket.com or www.confused.com. Simply type in your details and they will then and compare the price of hundreds of insurance premiums.
• Some special deals might not be mentioned by comparison services. So once you’ve used the comparisons try these other providers which are not on the comparison websites as researched by www.moneysavingexpert.com.
• The AA. www.theaa.com
• First Direct. www.firstdirect.com
• Kwik Fit – www.kwik-fit.com
• RAC – www.rac.co.uk
• Swiftcover – www.swiftcover.com
• Your job is important as all insurers keep a record of past claims made by each occupation, so they can see which are the most risky and more likely to claim. www.moneysavingexpert.com has built a tool to help you find a suitable cheaper alternative job title, but without having to get a new job.
• Double check the quotes - Click through to the insurance provider's own website to double check the quotes, as some comparison sites make a few assumptions.
• Examine the policies coverage. Is the policy suitable for you? So if you want "free car hire" if your car is being fixed, is it included? Plus while you're there it's worth playing with the policy details to see if you can finesse the price down; look at the excess, and whether adding drivers cuts the cost.
• Breakdown cover – check if your policy includes breakdown cover, if not, then ensure that you arrange it.

4. Forward Plan

If you have a lengthy journey ahead of you it's always worth planning ahead to avoid adding on extra miles and using extra petrol or diesel.

Try journey planning websites to ensure you are getting the most for your miles:

• route.rac.co.uk – simply type in your postcode and the journey location and away you go. You can also request points to the route.
• www.theaa.com/travelwatch/planner_main.jsp - You can search for routes using street or postcode, town, city or place of interest (eg sports ground, hospital, train station, airport). Get driving directions and a detailed map of your journey.
• www.greenflag.com/routeplanning - Simply enter the information required Green Flag will suggest either your shortest, quickest or recommended route

5. Watch the money market

To ensure you know about all the issues which could potentially affect you and your motoring, ensure you visit these websites to keep up-to-date on the latest motoring news:

• www.consumerdirect.gov.uk Consumer Direct is a government funded advice service for everyone to use. Our regionally based advisors are specially trained to give practical advice on consumer issues.
• www.dvla.gov.uk DVLA. Registers drivers and vehicles and collects vehicle taxation.
• www.direct.gov.uk. Portal to public service information from the UK Government, including directories, online services, news and information of relevance to specific groups.
• www.financingyourcar.org.uk Everything you need to know about motor finance from the FLA
• www.moneymadeclear.fsa.gov.uk Moneymadeclear is from the Financial Services Authority. They cut out the jargon and give you just the facts about financial products and services, helping you to make an informed decision
• www.moneysupermarket.com/motoring/ - Read 100s of car reviews for all makes of car from experts including What Car? Parkers, Top Gear & Auto Express.
• news.bbc.co.uk - Visit BBC News for up-to-the-minute news, breaking news, video, audio and feature stories.
• www.oft.gov.uk - Enforces consumer protection law and competition law, reviews proposed mergers and conducts market studies. Decisions, and press notices.
• www.moneysavingexpert – this website is great for getting honest advice about what's really happening in the financial market place

6. Look after your car!

What we mean by that is, look after it as it will save you money in the long-run.

• When it comes to maintenance and repairs on your vehicle, it makes sense to ensure you always have your car regularly checked and serviced. Also check your manufacturers warrantie to find out what repairs they cover.
• If your warranty has run out, or you have a second hand car it is worth getting quotes from a couple of garages before you get any work done.
• Finding a good, competent, honest, local garage can be a one of the biggest money saving moves you can make. When you’ve found one, treasure them for all they're worth, treat them politely, flatter them, and pay them on time. Visitwww.allianceautocentre.com to find a recommended garage near you.

7. Nearly new and used cars can save you thousands

• Did you know that brand new vehicles can lose anything up to 50% off their value within months? By purchasing a nearly new or used car you are ensuring that the car itself will depreciate a lot less than new cars and could also be alot more efficient to run.
• Buying a used car doesn't need to be a painful experience if you purchase from an award-winning car supermarket like ours. Always check out the credentials of where you are buying the car from to ensure you get the best service and the best deal.
• Did you know you can also check your cars MOT on-line? A car history check is the best investment you’ll make and could end up saving you hundreds of pounds in the long-term. Any reputable car retailer should talk to you about the MOT prior to your purchase.

8. Air con cool down

Turning off your air conditioning is a simple yet effective energy efficient solution to help you cut back on your fuel costs.

• Did you know that air-con uses a large amount of fuel when driving at a slower speed, so if you use the windows and sunroof instead to cool you down, it will save you money on your car's fuel consumption.
• However, driving with your windows and sunroof open while going fast down the motorway can reduce fuel efficiency by 10%, as an open window increases drag and burns more fuel. So, save the air-con for the motorway driving, and wind down your windows when you’re driving around town.
• Turning off your air-conditioning could save you at least £2 per week on fuel, according to Read our www.autotrader.com.
• That’s over a £100 in a year. Think of what you could do with all that spare cash!

9. Can you feel the pressure?

By being aware of your car tyre pressure it can help you with safer motoring. You must:

• Religiously check your car's tyre pressure each week with a high quality gage
• Tyres that are under-inflated will reduce fuel efficiency by as much as 3% for every 0.1 bar that the tyre is under-inflated so ensure that the pressure is correct (1.6 mm)
• The amount you save all really lies on the type of tyres you have and the car you drive (and of course, the way you drive it), but according to Autotrader, under inflated tyres can increase fuel consumption by 5%
• For further information on your tyres read our article Tyre care for your car

 

10. Less weight means more miles!
 

• Lastly try to ensure that you carry around as little as possible in your car as the extra weight will mean using extra petrol. Clear out boots and unnessecary objects on seats etc as they all add to your fuel economy.
• Because fuel is also heavy, every time you fill up you'll be adding weight to your car.
• A heavy car will burn more fuel, making it less economical, and therefore costing you more to run. So, filling up slightly more often and putting slightly less in will make the car run more efficiently.
• Try to fill up at least fifty miles before your tank runs dry. That way there'll be no panic about running out of petrol, and you'll have enough time to get to a cheaper petrol station. If you leave it until the tank is virtually empty you'll end up filling up at the next garage you see, which could well be one of the most expensive in the area. When you're filling up, aim for your tank being between half and three quarters full.

Thanks: availablecar.com & google pics

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How to find a cheap car insurance - must read money saving tips

It's possible to swiftly secure the cheapest car insurance in minutes, as you’ll see in the mainCheapest Car Insurance guide. However if you’re getting the wrong type of cover, the fact it’s the cheapest is irrelevant, this special additional article will help you work out exactly what you need.

Even we can't make this dirt cheap

Comprehensive or Third party? What to choose

There are three types of insurance to choose from and you should consider all the options to get the right type. Also, once you've chosen make sure you check your policy carefully, so you know exactly what you are and aren't covered for in the event of a claim.

Third Party

The minimum level of cover you need to legally be able to drive on the roads is called 'Third Party'. It used to be the cheapest type of insurance but now bizarrely fully comprehensive policies can often be cheaper. Never assuem one costs less than the other; quote both.

Third Party covers you for any damage you cause to another person's vehicle and protection for any passengers in your car.

Therefore, if you are in an accident and it is your fault, you will have to pay for any repairs to your own car yourself, as your insurance won't cover it. It's more expensive because it's assumed you care less about your car and are therefore more likely to have an accident.

It’s generally the most suitable for those…

• With cars worth less than £1000
• Aged under 25
• Without a no-claims bonus
• Or living in a high risk area

Third Party Fire and Theft

Third party fire and theft has the same level of cover as third party insurance. However, self evidently, it also has the additional cover of assistance if your car is stolen or is set on fire.

Fully Comprehensive

This is the widest level of cover but can be the cheapest. The big advantage is if you have an accident and it was your fault you will be able to claim the cost of repairing your own car, and cover personal injury costs, as well as those of the other drivers.

The cover also includes accidental damage and vandalism, for example if somebody causes damage to your car when it is parked in the street and they then drive off. Plus you'll usually (though not always, so do check your policy details carefully) be able to drive other people's cars if you have their permission, although this is likely to be only be Third Party. Sometimes you'll be covered for driving hire cars too.

Fully Comp is a good idea if your car is worth more than £1,500 and gets more important the more valuable you car is. Many insurers will only offer fully comprehensive cover for higher value cars anyway.

There are a few ways of cutting the cost of fully-comprehensive cover, Tesco Value insurance offers a comprehensive policy but limits the repairs to garages it has relationships with, which lowers the cost. However this doesn’t automatically make it cheapest, ensure you first use the comparison sites in theCheapest Car Insurance article to check.

Don’t think third party’s cheaper than comprehensive

Counter logically lesser third-party policies often cost more than fully-comp.

Why? Car insurance rates are set by actuaries, who’s job is to calculate risk. And it’s likely third-party buyers are on average a higher-risk group, perhaps as overall they care less about their cars, and so prices are pushed up. To illustrate this in one low risk driver quote, we found £290 for fully-comp compared to £406 third-party.

Yet this isn’t a hard rule, third-party can win, but for price’s sake always check comprehensive out too, use the main Cheap Car Insurance guide to compare.

Reduce your risk, reduce your cost

Every application for car insurance is different. Each insurer’s price depend on two things, first the underwriters assessment of your particular risk focus and then the pricing model which dictates what type of customers the insurer wants to attract.

Therefore by reducing an insurer’s perception of your risk you can reduce the price you’ll pay. There are of course many factors you either can’t change or can’t change easily … age, gender, where you live and driving history. Yet there are things you can have control over:

• Park and drive carefully
  
  Theft and accidental damage add a bulk to insurance costs. If you leave your car in a garage or driveway it’s a big deterrent to theft and means accidental damage is less likely, resulting in a 3% - 7% drop in insurance costs.
  
  And of course the more points on your licence the higher the cost. While speeding points remain on your licence for four years insurers check for convictions during the last five before they are removed from your record.
  
  One speeding conviction may only affect the price of cover by around 5% but any more’ll bump up the price, with two offences costing around 20% more. Being caught with a mobile phone is more serious and can double your quote!



• Add a second person to an under-25s / high risk drivers insurance
  
  Insuring someone aged under 25 can cost a fortune. Yet by adding a second driver with a good record to the insurance, even if they won't use the car often, it can smooth out the average risk and sometimes reduce the premium. It won't always work, but it’s worth playing with quotes to check.
  
  However at no point should you add your name as the main driver on a younger driver’s policy instead of them. This is known in the industry as fronting and is fraud. When you come to claim, this will often be checked out and your insurance will be invalidated.
  
• Pick a car
  
  The combination of car, engine size and value all impact car insurance cost. It’s worth considering this when you buy; a big super-powerful 4 by 4 for a 17 year old would cost enough to make Bill Gates balk.
  
• Fit a security device
  
  Any extra security will help, fitting an alarm or immobilizer (especially one approved by Thatcham) will reduce the bill substantially.
  
• Don’t modify your car
  
  The more changes you make to your car, barring security ones, the more you’ll be charged. Always make sure you inform your insurer of any modifications to your car, whether you made them or not, or it may invalidate your policy. A modification is anything that is not part of the standard vehicle specification including factory fitted optional extras, such as alloy wheels.
  
• Reduce your mileage
  
  The less you drive, the cheaper your insurance will be. Where possible try and reduce your mileage. This may sound trite, but actually the real key is incorporating the extra insurance cost when you make long journeys not just the cost of petrol compared to taking the bus or train (also read Cheap Trains article). If you drive your vehicle on business, always declare this rather than just include the business miles as personal, or the policy may be void.
  
• Inform your insurer of any changes in circumstances 
  
  This is crucial as it reduces potential problems in the event of a claim; even if it’s just your address. Trying to get insurance after you've had a policy cancelled due to a fraudulent claim is very difficult, very expensive and will follow you for the rest of your life.
  
  A change in circumstances includes moving jobs, as insurers beleive this can affect your risk. Scandalously, the unemployed often (though not always) pay higher rates for their car insurance, so do inform your provider if you're out of work but also check to see if it’s worth cancelling and moving elsewhere, as you don’t need to be at renewal to change insurer.

If you’ve read these tips and thought, “it’s be quite easy to lie about this”, then of course you’re right. Yet lying on your insurance form is fraud. It can lead to your insurance being invalidated and in the worst case a criminal prosecution for driving without insurance. Don’t do it.

Tips and tricks for lowering car insurance costs

If you’re trying to finesse the lowest price, there are a few more things to watch out for. Car insurance marketing is clever. Its aim is to make you feel you’re getting the best deal but to maximise the insurer’s profit at the same time.

• Get a ‘new’ quote from your existing insurer
  
  Often applying to your existing insurer as a new customer produces a cheaper price than its renewal quote. Insurers put out more competitive prices to attract new customers so simply start again and you could be better off.
  
• Consider how much you’d really claim for?
  
  It's worth considering going for a policy with a higher excess (the amount of any claim you need to pay yourself). Many people will find that claiming for less than £500 worth of damage both increases the future cost of insurance and can invalidate no-claims bonuses, meaning it’s not always worth making a claim.
  
  So why pay extra for a lower excess? A few policies will substantially reduce premiums for a £1,000 excess, so try this when getting quotes. Of course the one downside with this is if you have a bigger claim you’ll have to shell out more, but often it’s a good balance of the risks.
  
• Drive someone else’s car on your insurance
  
  If you have fully comprehensive insurance then often, although not always, it includes what’s called ‘driving other cars’ cover. This provides you with Third Party cover whilst reducing your mileage and therefore the cost of your own policy.
  
• New car, free insurance
  
  Buy a new car and it may include free insurance for a few years. While this is only worth a few hundred a year to an experienced driver, to a young car owner it could be worth thousands and is well worth taking into account when you add up overall costs.
  
• New Driver? Take an additional driving course
  
  PassPlus is a Driving Standards Agency course aimed at helping new drivers (within 12 months of passing their test) become more confident on the road. There are six modules; town driving, all-weather driving, driving out of town, night driving, driving on dual carriageways and driving on motorways.
  
  The cost of the course is around £200 but varies depending on where you live and the instructor or driving school you choose. Yet many local councils offer discounts of up to 50%, usually for those under 25, and in Wales it only costs £20 (check if your council is taking part).
  Once you have the certificate some insurers then discount the price of your insurance but but as there are not many there’s a high chance you can get cheaper cover elsewhere.

Extra tips for no claimers

• No-claims discounts don't necessarily reduce the premium
  
  For every year you don't claim on the insurance policy you get a discount. This makes a substantial difference to the overall cost. If you do claim it's usually two years off this discount. This is deliberate to encourage people not to claim. You can also get a protected no-claims discount so that claims don't impact it.
  
  Remember though, if you do have an accident, even if you don't claim to keep your no claims discount, the price of the policy can rise simply because you may be assessed as a higher risk in the future.
  
• Try to keep your no-claims if switching from a company car to a private car
  
  If you have a no-claims bonus from driving a company car and try to find private insurance online, you'll find neither insurer nor broker will allow your previous no-claims bonus to count.
  
  Yet if you phone up most companies will give some form of ‘introductory or special bonus' to those switching to a private car. This is because these discounts are often applied manually as the online systems don't automatically allow a discount. There are also discounts available with brokers and some insurers where second cars for existing policyholders can attract introductory bonuses, but again these are call-centre not internet-based. See the Mulit Car Discount section in the main Car Insurance guide.
  
  The overall tactic I would suggest is first of all use the Cheapest Car Insurance four-step plan to establish your risk factor – then call the top three (or possibly five) providers listed and discuss this no-claims company issue.

Thanks: moneysavingexpert

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