How to buy a new car for less

To understand how to get a new car with maximum discount you need to understand how the motor trade works. For an insight which can save you thousands read more…

money graphWhen contemplating the prospect of buying a new car most people think of that show room experience where they are guided through a bewildering range of colours, finishes and options wondering how, in the twinkle of the salesman’s eye, their modest £20,000 car suddenly got closer to £30,000; their budget in tatters after being far too willingly led up the garden path by the nose. Was that upgraded sound system really worth £3,500?

There is a way of buying a new car for less. Much less but it will need an understanding of how the motor trade works, specifically the relationship between dealers and manufacturers. The motor industry is truly global and the principals which apply in the UK are much the same as in the US and Europe.

For reasons, lost in the annals of history, car manufacturers have shown little appetite for retailing and have relied on third party dealerships to sell cars on their behalf. The manufacturer grants a franchise to a motor retailer which operates within a specific area for a given period of time, with the dealer agreeing to strict conditions of service including how many cars it will shift each year.

Car dealerships will argue that the manufacturers' hold the whip hand and that they, the subjugated retailers are forced to dance to their tune. But in reality, supply and demand operates in this market like any other and make no mistake, car franchises can be very valuable. Just take a look at your local Mercedes or Jaguar dealership for confirmation. They hardly appear on the breadline!

Manufacturers want to sell cars. They want their cars off the production line and onto the forecourt quickly and they want to pass the responsibility of sales straight to the dealerships. In short they want a consistent, well managed, smooth sales process without peaks and troughs or uncertainty. If the economy is struggling, if the country is covered in snow, if the new registration plate is imminent or if the Bank of England is talking of cutting interest rates it’s not their problem. All these things and many more can affect car sales but it is the dealer which ultimately has to ride out these storms.

So, how does the manufacturer create the conditions to achieve this? The answer can be found in the way their franchised dealers are remunerated. You may be tempted to suppose a dealership buys cars when it needs them; when their stocks are running low and the public is clamouring for more. Not so. A large chunk of a dealership's income is earned through bonuses based on the number of cars which it buys. So whatever the trading conditions the dealership has its quota to fill or it potentially loses its lucrative bonus. The financial incentive to reach targets is massive and therein lays your opportunity to buy a new car at a substantially reduced price.

In order to reach their targets a dealership will buy cars themselves (self-register) and these cars are your target. Of course, you may not have the option to choose the exact colour and specification you want but we are talking about a UK wide buying opportunity so you may well find a car that is very close to a perfect match for you. You will find, especially in quiet trading months, there are large stocks or new cars (or very low mileage demonstrators) which dealers are desperate to sell. You need to find them and negotiate hard.

Or, if you are like most of us who feel uncomfortable with negotiating (it’s just not British!) there’s another way. Internet based companies will do the work for you. You just provide the specification of the car you want, plug in your details and wait. Dealers literally bid for your business and you get the deal you want with no obligation and no charge. Click here to start searching Carwow

Before you get too excited recommend that the purchase of your vehicle and your finance should be kept separate. This way you can negotiate the best possible deal on both your car and your finance.