More ways to get a great deal on a new car
Manufacturers are offering extra incentives to tempt you to trade in your old car for a new one. But which of them will net you the best deal?
THERE’S A LOT to consider when you’re trying to get the best deal on a new car. Are you getting a good price for your trade-in vehicle? Are you paying a fair price for the new car? And if you’re buying on finance, how much extra will you pay in interest charges?
As if that wasn’t enough to deliberate over, there are now two other important things to consider: is there a manufacturer deposit contribution and does your old car qualify for a manufacturer scrappage allowance?
These incentives have been introduced by car makers in the past few years to keep people buying new cars as well as help the environment. And they’ve been effective. Although total new car sales last year were down 5.7% on 2016, the 2,540,617 cars registered still made for the third-highest annual figure for 10 years and more than half a million higher than in the sales slump of 2011, when registrations dipped below two million.
So why are these incentives important? Well, because each of these can amount to a larger discount than any you might be able to haggle out of a salesperson. That said, you’ll still need to do the maths to cost up the overall package to ensure you’re getting the best deal. Our panel (right) can help you work this out. WHAT IS A DEPOSIT CONTRIBUTION? It’s a sum of money added to a finance deal by a car maker (or dealer group) that bumps up the deposit you pay towards a new car. By reducing the overall cost of the car, it has the knock-on effect of cutting the monthly payments and any final ‘balloon’ payment required to buy the car at the end of the finance deal.
Deposit contributions are generally only offered on personal contract purchase (PCP)
and hire purchase (HP) deals, not if you’re buying a car with cash.
If the deposit contribution is big enough, even a deal that charges interest can work out cheaper than buying the same car with cash or on a 0% finance deal.
WHAT IS A CAR SCRAPPAGE DEAL?
It’s an incentive of between £1000 and £8000 that you can get for trading in an older car for a new one.
Last year, a number of car makers launched scrappage schemes, including Audi, BMW, Ford, Hyundai, Kia, Mercedesbenz, Mini and Renault. The deals are designed to reduce the pollution caused by older cars, as well as to increase the uptake of low-emissions cars in the UK. Although sales of such cars have risen by more than 30% in the past year, they still account for just 4.3% of the total market.
Not all car companies guarantee to scrap your trade-in car, so if you’re taking up a scrappage deal to ensure your more polluting car is off the road, then it’s best to check with the manufacturer before you buy.
To qualify for the schemes, the car you’re trading in must comply with Euro 1-4 emissions standards; this generally means it will have been first registered before 31 December 2009. Not all schemes are restricted to diesel vehicles; many car makers will also accept Euro 1-4 petrol-engined cars.
Euro standards set the emissions limits for new cars. The first, Euro 1, was introduced in 1992, and over the years these standards have drastically cut the allowable level of exhaust emissions produced by cars and light vans. You can check the Euro emissions standard of your car at carfueldata.direct.gov.uk.
Since the introduction of the Euro standards, carbon monoxide levels have been cut by 82% for diesel-engined cars and 63% for petrols, and particulate matter has been reduced by 96%. Since 2001, nitrogen oxide is down by 84% and hydrocarbons are down by 50% in petrol-engined cars.
Both diesel and petrol-engined vehicles that comply with the latest Euro 6 standard produce very low levels of carbon monoxide, hydrocarbons, nitrogen oxides and particulates.
WHAT ARE THE PROS?
The scrappage initiative is great news if you’re considering buying an electric vehicle or hybrid, because the discount is offered on top of the Government’s electric vehicle grant. This means if you want to buy a BMW i3 electric car, you’ll get £2000 scrappage as well as the £4500 government grant off the list price.
Some, but not all, car makers state that the scrappage discount can be had in addition to other existing finance offers. For example, trade in a pre-2011 car for a Ford Kuga and Ford says you’ll receive a £2000 discount for scrappage and another
£2000 off from an existing offer.
IS SCRAPPAGE THE BEST-VALUE OPTION?
Not necessarily. If you own an old banger that’s worth less than £1000, you’ll make a saving with a scrappage deal. However, if the amount offered is less than the tradein value of your car – plus any discount that’s being offered by the manufacturer on a new car – you’ll be out of pocket if you take up a scrappage deal. The amounts offered by car makers range from £1000 on smaller models to £8000 on the most expensive, so it’s worth using our online guide (whatcar.com/news/scrappageschemes) to check how much of a saving is being offered and the terms and conditions of each car brand’s scheme.
‘Scrappage deals are designed to reduce the pollution caused by older diesel cars’