Thursday, 21 February 2013

Drive For Value That’s Fuelling A Used Car Boom

There may have been the odd dent or scratch. The interior may not have been pristine. That’s the way it is with first cars, which have, in 89 per cent of cases, been loved and driven before, according to a recent survey by Experian. And almost all of us will finish the way we began – 80 per cent of us never own a new car.

Only eight per cent of participants in the Experian Used Car Report 2012[1] were sure that they would drive a shiny, new car off the garage forecourt when it came to replacing their current vehicle, while more than 70 per cent are pretty certain that a pre-loved model is what they want.

The market is certainly strengthening, with predictions of a 1.5 per cent increase in used car sales every year to 2017, when 7.27 million used cars are expected to change hands. To set that in context, the research found that by the time you reach 55, the chances are that you will have owned 10 used cars.

The drive for value
The big driver is, of course, price, cited by every respondent in the survey as the biggest consideration when they chose a new-to-them car, with most people (48 per cent) paying less than £5,000 for a car that’s between three- and five-years-old, the age range given by 37 per cent of people.

And many believe the best possible value lies in private sales, which the Office of Fair Trading and British Car Auctions believe account for 40 per cent of the used car marketplace.

Buyer beware
With improved build quality, a used car no longer represents the same kind of risk it did 20 years ago. But there are pitfalls, especially as you don’t have the level of protection that you get under consumer law when you buy from a dealer.

For example, one in 12 people reported a private seller hadn’t told them that a car had faulty or missing parts and drivers were really worried that they might discover the car was a write-off or had been clocked (each cited by 58 per cent).

Outstanding finance, which means the car could be repossessed by the lender, was mentioned as a major concern by 57 per cent, while 56 per cent were worried that it might turn out to be stolen or a truly dangerous cut and shut – a car made up of elements of two cars welded together.

Precautions pay
Simple precautions, such as viewing the car at the vendor’s home and collecting it from the same home address, can help to set your mind at rest. You should also cross-reference the details in the logbook to confirm that the seller is the registered owner. And a thorough inspection (bring in a mechanic if you’re not an expert) and test drive should go without saying.

But these won’t uncover a car’s hidden history or answer those serious concerns. One increasingly common step is to order a Vehicle Check report, which can alert you to potential problems. It includes 26 different checks with more than 20 sources, such as the police, the DVLA and insurance companies, and includes verification of critical issues such as mileage and outstanding finance which aren’t covered by some vehicle history checking services.

That way you can buy with confidence – and find yourself a genuine used car that will give you years of reliable motoring.

[1] July 2012: Based on a survey of 1,800 used car owners who have bought a used car from a private seller in the last 18 months, this report is the first of what will be an annual investigation into the private used car marketplace.

Thursday, 13 December 2012

Get A Good Used Car For Under A Grand

When wheels are essential and your budget is tight, it’s time to learn how to sniff out a bargain – and a reliable one at that.

An Experian survey[1] has shown that 13 per cent of us buy bargain basement used cars. Predictably, many of these are young drivers who simply can’t afford to pay more, with 28 per cent of 18-25-year-olds spending less than £2,000.

These simple precautions could help to sift the old bangers out from the workhorses that will keep you mobile for years to come.

1. Research your makes and models in advance
You may be seduced by the idea of a sexy coupĂ© or a hot hatch but there’s no point buying one if you can’t afford the running costs. Check reliability ratings, fuel economy and the cost of parts, servicing and insurance before you begin your search. If you still don’t know where to start, the top three picks in the Vehicle Check survey were the Ford Fiesta, Ford Focus and Vauxhall Corsa.

2. Don’t judge a book by its cover…
…or a car by its shiny paintwork and list of extras – unlike the 14 per cent of people in Wales who told the survey they were happy to buy on the basis of online details alone. The most common checks are on bodywork, tyres, the exhaust, the engine, the clutch, the brakes and the interior. Even so, eight per cent of buyers said that sellers did not admit to faulty parts.

3. Call in the experts
A good mechanic (friends and family count) should be able to spot potentially expensive problems. If you’re not an expert, join the 30 per cent of drivers who call one in when they’re keen on a used car. Unsurprisingly, women are more likely to turn to the experts – 33 per cent of them bring in a mechanic, against 28 per cent of men. You can use what you learn to drive down the price.

4. Budget for repairs and replacement parts
Almost 60 per cent of buyers had to pay for some repairs or replacement parts within 12 months of getting a new (to them) used car. Tyres top the list at 34 per cent, followed by brakes and batteries at 13 per cent each, so it’s worth finding out what these would cost in advance and factoring them into the price you’re prepared to pay.

5. Uncover any nasty secrets in its past
What if the car has been stolen, clocked or is a write-off? Worse, it could be what’s known as a cut and shut – a potentially life-threatening hybrid made of chunks of two separate cars welded together. Find out – and join the 45 per cent of used car buyers who commission a vehicle history report – with a Vehicle Check report, which includes 26 different checks with more than 20 sources, including the police, DVLA and insurers – to help you buy that car with confidence.

Get your car checked out
You can take steps to ensure you have a clear understanding of the car’s history by carrying out a full Vehicle Check report. It could help protect you from potential hidden pitfalls, such as cars that are currently listed as stolen or have existing damages through being written off, and can tell you whether a car has outstanding finance recorded against it.[2] Some vehicle history checks do not include critical issues such as mileage, outstanding finance and other high risk factors.

Many of us have a particular model in mind when we’re choosing a used car, but before you fall too much in love with the car of your dreams, ensuring everything is in tip-top condition by completing a full Vehicle Check report will give you confidence in what you are about to purchase.

[1] July 2012: Experian AutoCheck Used Car Report: Based on a survey of 1,800 used car owners who have bought a used car from a private seller in the last 18 months, this report is the first of what will be an annual investigation into the private used car marketplace.

Wednesday, 15 August 2012

What is Gap Insurance?

If you think standard car insurance would be sufficient to cover you in the event of an accident or theft of your vehicle, then you could be disappointed.

Standard car insurance will only cover you for the current market price of your vehicle. So if your vehicle has depreciated in value since you bought it, or you took out finance to pay for it, you could find yourself out of pocket in the event of your vehicle being stolen or damaged beyond repair.

Guaranteed Asset Protection (GAP) insurance covers the difference between the cost you paid for your car and its current market value, whether that's now or several years in the future. It gives you peace of mind that if you do need to replace your vehicle then you will have enough money to buy a like-for-like model or to pay off any outstanding finance or loans.

GAP insurance is particularly beneficial when buying a new car which can depreciate in value very quickly as soon as it leaves the forecourt or if you have bought an expensive car and you are concerned you might not have enough money to replace it with an identical make or model in the event of an accident or theft.

There are different types of policy available:

• A Return to Invoice policy will cover the difference between your settlement and the amount you paid for the car.

• Return to Value policies are available for cars bought privately or at auction. When you take out the policy an independent assessment will be carried out to determine the current market value of your car. This will be the most you will be able to claim for your vehicle if it is stolen or damaged beyond repair.

• Finance GAP insurance covers you for any outstanding finance or loan agreements on the car.

• You can combine a Finance and RTI policy which will cover you for the original price of the vehicle or clear the outstanding finance, whichever is the greater.

• Vehicle Replacement Insurance covers the cost of replacing your car with a like-for-like new model, even if the retail price has increased since you bought it. You will get a brand new replacement of the same make, model and specification of your vehicle or you will get the latest equivalent. If your car is second hand, your replacement car will be closely matched in terms of mileage and specifications.

When buying GAP insurance consider whether your policy covers the excess you will need to pay on your standard car insurance policy, the maximum cover you will need and how long you want the policy to cover. Gap insurers generally offer policies for between one and five years.

You will also want to consider the maximum value the insurer is willing to pay out for your vehicle, the age of your car and whether any other restrictions apply, for example some insurers have mileage limits. It may be helpful to shop around and compare policies online to get the best deal.

Click here to find more about Auto Trader Gap Insurance.