Whether you’re buying a new or second-hand car, it’s worthwhile considering a diesel-engined vehicle. Although diesel fuel is around the same price as unleaded petrol in the UK, diesels are cheaper to run (e.g. 35 to 40 per cent better fuel consumption) and have a much longer engine life.
Car sales are covered by the Misrepresentation of Goods Act 1967, which means that a seller cannot lawfully make false claims. If you buy from a dealer, you’re additionally covered by the Sale of Goods Act 1979, which says a car must be of ‘merchantable’ quality and good for the purpose intended. Which? magazine publishes an annual Which? Car edition containing independent information on best buys, performance, comfort, convenience, reliability, trouble spots, running costs, safety, recalls, and new and second-hand prices. New and used car reports are available from the AA’s Car Buyer’s Guide (0870-600 0376).
New Cars
Making comparisons between new car prices in different countries is often difficult because of fluctuating exchange rates and the different levels of standard equipment. These may include electric windows and mirrors, central locking, electric sun roof, alloy wheels, stereo radio/cassette/CD, power steering, ABS, air bags, automatic transmission, leather or power seats, cruise control and air conditioning. Some manufacturers include many of these items as standard equipment, while others charge dearly for them as ‘optional extras’. A catalytic converter is fitted as standard equipment to all petrol-engined cars sold in the UK. Paying for expensive optional extras on many cars is unlikely to increase the car’s value when you sell it, although many cars are easier to sell with options such as power steering, central locking and electric windows. Capital depreciation is a greater threat than rust to a new car owner, as a car’s value can drop by as much as 60 per cent within three to four years.
The manufacturer’s list price includes the wholesale price, the dealer’s profit, car tax and 17.5 per cent VAT on all these items. In addition, you must usually pay for delivery (average £450), number plates (e.g. £25), a tank of petrol, floor mats, mud flaps and road tax. Delivery charges have increased considerably in recent years and are a rip-off used to hike car prices (and are exclusive to motor vehicles). They can vary considerably for the same car, depending on the supplier. When comparing prices, ask dealers for the on-the-road price, including delivery and the other charges listed above.
Another important aspect of buying a new car is the warranty period, during which major parts are insured against replacement. Many manufacturers now provide extended warranties of up to four years with unlimited mileage and most others offer an extended warranty for an annual fee (usually with a mileage limit). Some manufacturers offer three years (or longer) unlimited mileage or a limit of 96,000km (60,000mi). If you do a high annual mileage and change your car every two or three years, you would be well advised to buy a car with an extended warranty or pay for extra cover. However, warranties usually contain a range of get-out clauses for manufacturers.
Shop around and compare prices, discounts and incentives from a number of dealers. There has been a slump in sales to private buyers (rather than fleet sales) in recent years, which means that buyers can usually get a good deal. Free insurance, servicing and petrol are just some of the added incentives offered in recent years. You can often get a good bargain by buying an old model that has been, or is due to be, replaced by a new model. When new registration numbers are issued, it’s a good time to buy a new car with the previous year’s registration number, which may be sold for thousands of pounds below the list price.
Finance Deals
Dealers offer a range of finance deals that may be a better option than paying cash, particularly if you’re offered a one or two-year, no-interest deal. However, most require deposits of up to 50 per cent. A plethora of deals is on offer and seven out of ten cars are bought on a leasing or hire purchase scheme. One such deal is called the 50-50 scheme, where you pay 50 per cent and drive for two years, after which you either pay the balance or hand the car back to the dealer and walk away. The most popular deals are personal contract plans (a combination of hire purchase and rental) which are offered by car manufacturers and some banks, and account for one in five of all car sales.
Although not as cheap as no-interest finance packages, deposits on personal contracts are lower at 20 to 30 per cent. After deducting the deposit, the manufacturer deducts the Minimum Guaranteed Future Value (MGFV) that he expects the car to be worth in two or three years’ time when the contract expires. The balance is divided into 24 or 36 equal monthly repayments and interest is charged on the MGFV and the amount outstanding. At the end of the two or three-year period, the customer can pay the MGFV or simply return the car to the dealer.
You can reject a new car if it’s faulty, but you have only a few days or weeks in which to do so. If you buy a real ‘lemon’ you can have it inspected by one of the motoring organisations or a member of the Institute of Automotive Engineers (01543-266 906), which usually provide irrefutable, independent evidence in the event of a legal battle with the manufacturer.
You may save money buying a car abroad, although prices have fallen considerably in the UK in the last few years and it’s generally no longer worthwhile for the relatively small savings.
Used Cars
Used cars can be excellent value for money, particularly low mileage cars less than one year old, where the savings on the new price can be as high as 25 per cent. The minute a new car leaves the showroom, it’s usually worth 10 per cent less than the purchase price. Some models depreciate much faster than others and often represent excellent second-hand bargains. If you intend to buy a used car, whether privately or from a garage, check that:
- It has a test certificate, if applicable and that its condition matches its declared age.
- It hasn’t been involved in a major accident and suffered structural damage. If in any doubt, obtain a declaration that it’s accident-free, which should be in writing.
- It’s in good mechanical condition. Check the bodywork in daylight, preferably with an expert (if you aren’t one yourself).
- The import tax and duty have been paid if it’s an imported model. The registration document of a vehicle imported without tax and duty being paid, is annotated with ‘Customs Restricted Until (date)’.
- It hasn’t been stolen or is subject to a leasing or hire purchase contract, in which case the original owner or lender can legally demand it back. Thousands of cars are sold each year before they’re paid for. If in doubt, check with the Hire Purchase Information (HPI) register through a Citizens Advice Bureau.
- The official service record book have been completed and stamped, and that routine servicing has been carried out regularly by an authorised dealer (mandatory for a manufacturer’s warranty to be valid). It’s best to buy a car with a full service history (fsh), that should also verify the mileage (see ‘clocking’ below).
- The price roughly corresponds to that shown in guides to used car prices (see below).
- A written guarantee or warranty is provided (see below). The manufacturer’s warranty is usually transferable to subsequent owners.
If you’re buying a car from a dealer who’s a member of the Society of Motor Manufacturers and Traders (SMMT), the Motor Agents Association (MAA), the Vehicle Builders and Repairers Association (VBRA) or the Scottish Motor Trade Association (SMTA), extra protection may be afforded (but don’t count on it). Most garages provide a warranty on used cars, e.g. 3 to 12 months (unless it’s covered by a manufacturer’s warranty), although you should check what it includes and more importantly, what’s excluded. You may be able to purchase an additional one to three years warranty, depending on the age and make of the car. The best warranties are supported by the manufacturer.
Most experts recommend that you don’t buy a used car that you couldn’t afford to run from new, although you could forego fully comprehensive insurance on an inexpensive vehicle. The higher the new price of a car, generally, the more it costs to repair and service. Many cars have very expensive parts that may need replacing, including catalyst-equipped exhausts, ABS systems, engine control units, automatic gearboxes, electronically-controlled heaters, nose and tail fairings, power-steering racks, dashboard electronics and power accessories. The more electronic gadgets a car has, the more there is to go wrong (the cost and fitting of replacement parts would deter many people from buying certain cars).
You can get a guide to the value of most second-hand cars from motoring magazines such as What Car?, Motorists Guide and Parker’s Car Price Guide, all of which are published monthly. Always do your own research in your area by comparing prices at dealers, in local papers (and free car magazines) and in the national press, e.g. Exchange & Mart and the Auto Trader. Many private sellers are willing to take a considerable drop and dealers also usually haggle over the price. The average annual mileage for a car in the UK is around 12,000mi (19,311km) a year and cars with high mileage (e.g. 20,000mi/32,186km a year) can usually be bought for substantially less than the average price. An innovation in recent years has been the car ‘supermarket’ (e.g. Carcraft, www.carcraft.co.uk ), selling nearly-new or used models, mainly ex-fleet or ex-lease.
You must be extremely careful when buying a used car, whether from a garage or privately. Sellers use many ploys such as ‘clocking’ (winding back the mileometer); false test certificates (most likely on older cars); and any number of ruses to hide major faults such as accident damage, rust or imminent engine failure. It’s advisable to check a car’s history before buying it to ensure that it hasn’t been written off (e.g. a ‘cut and shut’, where two ‘good’ halves are cut and welded together making a death trap), stolen, disguised or the number plates changed. This costs around £25 and can be done by the AA’s Data Check (0800-056 8040) which maintains a register. Cars written-off in road accidents are also substituted by stolen cars, so it’s advisable to check that the vehicle identification number matches the registration number. The mileage can usually be verified by buying a car with a full service history (fsh). Complaints about second-hand car purchases regularly outnumber all other consumer complaints!
You have a certain amount of protection in law, whether buying from a dealer or privately, although legally you’re better off buying from a dealer. The Automobile Association publishes a booklet entitled The Law about Buying and Selling a Car. For people who know little about cars, the Office of Fair Trading publishes a booklet entitled Used Cars, which includes tips about buying, service and repair. If you buy a ‘lemon’ (a dud), you should take legal advice to find out whether you have a valid complaint.
Always check a car carefully (particularly the tyres, which may be illegal) and take it for a test drive. It’s advisable to obtain an independent inspector’s report from one of the motoring organisations before buying, although this may not be possible with a private sale, when a decision must often be made on the spot. Keep a copy of any advertisements which include a description and note any claims made by the seller. Beware of dealers claiming to be private sellers (which is illegal). If the seller’s name and address isn’t the same as that in the vehicle registration document, you should be suspicious (it could also be stolen).
In addition to buying a car from a dealer or privately, you can also buy a car from car auctions throughout the UK. These are, however, generally for the experienced buyer and the trade, who buy around 90 per cent of all cars sold at auction. ADT Auctions, one of the largest in the UK, produces a booklet for would-be buyers and sellers, available from any of their auction centres (see yellow pages).
Test Certificate
All vehicles (cars, motorcycles, motor caravans, light goods and dual-purpose) that are over three years old must have an annual Department for Transport (DfT) test. This was previously called the Ministry of Transport test or ‘MOT’ and the name has stuck. Passenger-carrying vehicles with more than eight seats and taxis (excluding private hire cars) must be tested after they’re one year old and there are also separate rules for goods vehicles over 1,525kg (30cwt), about which information can be obtained from a VRO.
Tests are performed by officially approved test centres, including local authorities and most large garages, many of which will test your car while you wait (although you may need to make a booking). Some garages do tests seven days a week and even provide a free collection and delivery service. The test usually takes 20 to 30 minutes, depending on the condition and cleanliness of your car, and includes all lights, steering and suspension, brakes (including the handbrake), tyres and wheels, seat belts and general items such as windscreen washers and wipers, horn, exhaust system and silencer, exhaust emission and vehicle structure (e.g. soundness of the bodywork). Tyres require 1.6mm of tread over 75 per cent of their width. The test has been made more stringent over the years and it’s now difficult to get an old car to pass.
Recently certification has been computerised and all records are held on a central computer. The official (maximum) cost of the test is around £50, although some garages charge less. When your car passes the test, you’re given a Test Certificate (VT20), if it fails, you are given an advisory list of the defects which must be corrected. If the tester completes the ‘Warning’ (section D) part of the test report, you’re allowed only to drive it home, to a garage for repairs or to another testing station after repair. You can appeal against a test failure by completing form VT17 (available from any testing station) and sending it to the local Department for Transport office with the appeal fee, within 14 days of failure.
You can have your car tested any time, for example if you want to sell it. However, if it fails the test, even when it isn’t due, you’re unable to drive it until it has passed. It’s an offence to use a vehicle on public roads without a valid test certificate. You’re permitted only to drive it to a testing station where you’ve pre-booked a test. Without a test certificate, you cannot renew your road tax. If you lose your test certificate, you can get a duplicate from the testing station which carried out the test, provided you have the serial number or the approximate date of issue.
It’s unwise to buy a vehicle without a recent test certificate, even at a bargain price (which should make you even more suspicious), as many old cars fail their test. The standard of testing is variable, owing mainly to a wide variation in the interpretation of test standards. It’s unlikely that two testing stations will find the same faults on an old car, e.g. one over five years old. Even buying a car with a new test certificate doesn’t guarantee that it’s in good condition (it has been estimated that some 50,000 test certificates are altered or completed fraudulently each year). It’s easy for someone to obtain a false test certificate and many testers lose their licences each year for issuing false certificates. A valid test certificate should never be taken as a guarantee of a car’s road worthiness, particularly as many aspects of a car’s operation aren’t tested, e.g. engine and gearbox. Many garages fail cars for no apparent reason (other than to generate work for themselves!) and pass others that should have been failed. Over half of all vehicles are tested incorrectly.
If you’re buying a car privately without a guarantee, you would be well advised to have an independent inspection carried out by one of the motoring organisations. If you ask a garage (or anyone) to do a pre-test check on your car, don’t ask them to repair it to test standard to get it through the test, as this could result in unnecessary expense. Ask them to take it for the test to find out what (if anything) needs fixing. Essential repairs recommended by a garage may not be the same as those officially required after a test. An MOT handbook on mechanical safety for cars and light vans, entitled How Safe Is Your Car?, is issued by the Vehicle Inspectorate. Police carry out road worthiness spot checks on vehicles. If your vehicle is found to be unroadworthy, the fact that you have a valid test certificate is irrelevant.
Selling a Car in the UK
The main points to note when selling a car are:
- A potential buyer cannot test drive your car unless he’s covered by your or his own insurance. You’re responsible if someone drives your car with your permission without valid insurance.
- It’s illegal to sell a car in an unroadworthy condition, unless you’re selling it as a non-runner without a test certificate (see above). Never describe a car as being in a better condition than it is; if it’s subsequently found to have any faults, you could be liable to reimburse the buyer or pay for repairs.
- Inform your insurance company. Either cancel your insurance or transfer it to a new car. If you cancel your insurance, even for a short period, this may affect your no-claims discount when you take out insurance on a new car. When you sell a car, you’re required to notify the motor vehicle registration office by completing the appropriate part of the vehicle registration papers. The new owner of the car must also register his ownership with them (this is intended as a cross-check of ownership).
- If you’re selling your car privately, you should insist on cash. It’s usually a formality for the buyer to accompany you to your bank and make a cash transfer on the spot. There are confidence tricksters who will, given half a chance, happily give you a dud cheque and drive off with your car. Be wary of banker’s drafts and building society cheques, which, although as good as cash, may be counterfeit or stolen (some crooks try to pass them over a public holiday period when the banks are closed). If someone insists on paying by cheque, you should never allow them to take your car until the cheque has cleared. Don’t allow a dealer or car auctioneer to take your car until a cheque has cleared, as cheques sometimes bounce after companies have ceased trading.
- Include in the receipt that you’re selling the car in its present condition (as seen) without a guarantee, the price paid and the car’s mileometer reading. The new owner may ask for a declaration in writing that the car is accident-free, which applies to major accidents that have caused structural damage and not slight knocks.
- You can advertise a car for sale in local newspapers, on free local notice boards, in the Saturday or Sunday editions of national newspapers, and in many motoring newspapers and magazines. Among the best market places are Exchange & Mart and Auto Trader. The best place to advertise a car depends on the make and value of the car. Cheap cars are probably best sold in local newspapers, while expensive and collectors’ cars are often advertised in the motoring press and in the broadsheet Sunday newspapers, such as The Sunday Times. Buyers usually travel a long way to view a car that appears good value for money (if nobody telephones, you will know why).
Car Hire in the UK
There are four multinational car hire (which is usually preferred to ‘car rental’) companies in the UK (Avis, Budget, Europcar and Hertz), plus a number of large independents, e.g. British Car Rental, Godfrey Davis, Kenning Car Rental, Practical and Swan National. All have offices in towns throughout the country and at most major international airports (open from around 6.30am to 11pm). Most major companies provide one-way hire, which means you can hire a car at one branch and leave it at another (for an extra charge). When hiring from a national company, check whether you’re being quoted the national or local rate (which is cheaper). The national rate is usually charged when hiring in major cities or at airports and should be avoided unless someone else is paying. Always check what’s included in the rental charge, as what appears to be an expensive quote could turn out to be the cheapest.
Cars can also be hired from many garages and local car hire offices in most towns, which often charge much lower rates than the nationals. Look in local newspapers and under Car Hire in the yellow pages. Shop around for the best buy, as the car hire business is extremely competitive. However, you should be aware of cowboy companies who offer ‘hire cars from hell’. Many cars offered by local companies, particularly in tourist areas, are unroadworthy and could put your life at risk. Be particularly careful if hiring an older car (cars from major hire companies aren’t more than three years old and are usually less than one year old), as it could be in a dangerous condition. If you’re offered an old car or a car with high mileage, it’s probably wise to reject it (unless the company is in the business of renting cheap wrecks). If you hire a car in an unroadworthy condition, you’re responsible if you’re stopped by the police or cause an accident.
All national hire companies offer fly-drive deals on flights to or within the UK, which must be booked in advance. You can also hire a car from major railway stations and leave it at another station or delivery point. Providing you book 24 hours in advance, a car can be waiting to meet you at the station at any time of day or night. Cars can also be hired on the spot from some stations from Hertz and other hire companies. Hertz (and other companies) charge their highest rate for fly-drive and executive connection services. Special rates are available when combined with British Rail InterCity weekend or longer trips. Rental costs vary considerably between rental companies, particularly over longer periods (weekly and monthly rates are lower). Rates are inclusive of unlimited mileage, collision damage waiver insurance, personal accident, baggage insurance and VAT. Rental cars usually mustn’t be driven outside the UK unless prior arrangement is made with the rental company and continental insurance (a green card) obtained.
To hire a car in the UK, you require a full British, European or international driving licence, which must have been held for a minimum of one year (or two years if under 23). If you hold a British licence with an endorsement for driving without due care and attention (or worse), you may be refused car hire, although an endorsement for speeding is usually permitted. You may be asked for some form of identification in addition to your driving licence. The minimum age is usually between 18 and 23, although those aged 18 to 21 must normally provide their own fully comprehensive insurance or purchase collision damage waiver (CDW) insurance at a special (high) rate. Drivers under 21 are usually restricted in their choice of cars and some hire companies insist on a higher minimum age (e.g. 25) for some categories of cars.
You must usually be aged 23 to 25 to hire a minibus or motor caravan (the maximum age for hiring a car may be 70 or 75). A minimum deposit of £50 to £75 (or equal to the total hire charge) is usually required if you don’t pay by credit card (national car rental companies also have their own credit cards) and may be much higher if you don’t take out CDW insurance. Cheques must be supported by a guarantee card. When paying by credit card, check that you aren’t charged for erroneous extras or for something for which you’ve already paid, e.g. petrol. In fact, paying by credit card usually means that you give the hire company a ‘continuous authority’ (or blank cheque) to debit your card account.
Vans and pick-ups are available from major rental companies by the hour, half-day or day, or from smaller local companies (which once again, are cheaper). You can also hire a motor caravan, a caravan or trailer, or a minibus from a number of companies (prices vary with the season). In addition to self-drive car hire, in many cities you can hire a car with a chauffeur for business or sightseeing. The British Tourist Authority publishes an annual Vehicle Hire directory.
This article is an extract from Living and working in Britain. Click here to get a copy now.