Buying a used car

Buying a new car is one of life’s great joys and searching for a used car can be a lot of fun. However, with so many options these days, you might be unsure of how to go about finding that ideal used car.

There are a lot of questions you should ask yourself to narrow down exactly what kind of car you want and how you’re going to get it. Do you buy from a dealer, a private seller or from an auction? Do you choose petrol, diesel, hybrid or electric? Peugeot or Ford? Low mileage or most recent year of manufacture?

You’ll already know your car needs to be reliable and suitable for your lifestyle; but how do you know which used car is best to buy? Every car out there has been driven differently, so it’s important to suss out which ones can offer quality.

We’ve broken the used car buying process into sections to help you in your search for a used car. Click on the links to jump to each section.

Where to buy a used car

Buying from a dealer

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We’ve all heard the cliché of being sold a used car by some dodgy dealer. Luckily, for most of us, buying a used car from a dealer isn’t anything like that.

There are three main types of used car dealer, including the manufacturer’s franchise, independent dealers and car supermarkets. Often, it’s the type, age and planned use of the vehicle you want that will determine which kind of dealer you buy from.

Unfortunately, used car dealers don’t have the best reputation historically. This means that one of the biggest issues people come up against is deciding whether a used car dealer can be trusted. There are a few small steps you can take to assess how trustworthy a dealer is: reading online reviews, knowing what to look out for on the premises and going for a test drive are all good checks to make. By knowing the right questions to ask and arming yourself with knowledge, you’ll be able to trust your gut with any dealer you choose to buy from.

You can also ensure you’re car shopping with confidence by familiarising yourself with the industry jargon. Knowing your Cat B from your Cat D will stop you getting lost in dealer’s spiel, instead allowing you to understand what deal you’re really getting for your chosen car.

The good news about buying from a dealer is that your consumer rights are protected. Dealers can also offer extras, such as used car warranties that’ll cover you if something goes wrong with the car after you’ve purchased. Dealers tend to carry out pre-sale checks on all of the vehicles they sell as well; so, if they do spot any potential issues or problems, they should have been sorted before you drive away.

Another advantage of buying from a dealer is that you have the ability to part exchange your car. This not only covers some of the bill but gives you the opportunity to make a quick sale rather than having to sell privately. If this is a route you want to take, check with your dealer if they offer this service and get an estimate for your existing vehicle.

The offers you can get from a dealer often mean your car purchase works out cheaper. Thanks to the increased value a dealer can provide, through pre-sale checks, extras like warranties and finance options, and better-protected consumer rights, you can save money and hassle in the long run.

Buying from a private seller

You may have scoured the classified ads and think you’ve found the used car of your dreams. However, buying a used car from a private seller isn’t without risk.

Although the price will probably be lower than you’ll find with a dealer, you won’t be able to get a warranty on the car and you won’t get a part exchange option, meaning you’ll have to arrange to sell your existing car another way. Your consumer rights aren’t protected in the same way they are with a dealer - unless the car isn’t sold as advertised - which can leave you vulnerable. There’ll also be no payment/finance options, as a private seller will require cold, hard cash up front.

It’s important to consider these risks and what they mean for you. Even if the price of the car is lower than buying from a dealer, any issues that require repair will cost you and could turn a bargain into a drain on your bank account.

To prevent this, you’ll need to make sure your research and the checks on the car are done carefully, such as asking about the car’s service history and taking it for a test drive.

On the upside, you’ll be able to negotiate a good deal because the seller will probably be keen to find a buyer.

Buying from an auction

It’s not just antiques that you find at auction; you can also find a used car.

Although you can get a bargain at auction, this is actually one of the riskiest ways to buy a used car. The competitive nature of an auction can sometimes lead to overbidding, and you won’t benefit from a warranty on any car you buy either.

If you decide to buy at auction, stay within your budget and do your research first so that you know what to expect. When the hammer goes down, the car is yours and you have no legal right to back out of the sale. The same is true if you win an online auction - such as on eBay Motors - so do your research before bidding to prevent ending up with a disaster on wheels.

Motor auction houses like British Car Auctions (BCA) tend to be more reliable than online auctions, as they allow you to see the car in person before bidding. The BCA sell cars that are either part exchange from dealers, cars from leasing companies or car fleets, and so tend to come from reputable sources.

BCA also provides a mechanical report carried out by the AA that includes brakes, warning lights, tyre depths, engine noise, gearbox, suspension and fluid levels. If the car you buy doesn’t match its report, you’ll have 48 hours or 500 miles of driving to inform the BCA who will then attempt to fix any issues. It’s not quite a dealer warranty, but it can help to ensure quality. You have even fewer legal rights on an online auction, unless the car sold was mis-described or the seller isn’t the legal owner.

Be aware that there can be additional costs involved with buying a car at auction. These include costs to have a car inspected and valeted, as well as storage and delivery costs if you can’t take the car home with you on the day of the auction. Any of these additional costs will increase your overall spend on the car, so it might not be quite the bargain you thought you were getting.

Choosing the right car

You’ll want to find a used car that suits you and your lifestyle. To make sure you’re getting the right car for you, take time before searching to consider what you want from your car and what it will be used for. This will help you narrow down the key features of your next car, including fuel type, car style, age and mileage.

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If you need a helping hand, our list of key considerations when car shopping can help.

Choosing the type of car

Knowing the type of car you want before you search will be a massive step towards deciding where you’re going to buy your car from.

For example, if you’re after a luxury car, there’ll be specialist dealers who can provide you with a wide selection. If you are going for a premium used car, you’ll want to take extra car to make sure you’re getting value for the price you pay. Be sure to take advantage of test drive offers too, so you can get a real feel for the car before you buy. Our tips for premium used car shopping will help you to know what to look out for.

Another decision you’ll need to make is what size car you want to buy. Are you looking for a large vehicle, like a 4X4 or SUV, or a more traditional body type? Each of these have different pros and cons; for example, larger vehicles will use more fuel due to their increased weight, while hatchbacks aren’t ideal for those wanting lots of space. Make a list of non-negotiables for your next car to help you make the right choice when comparing different vehicles.

If you’d like a reliable car that gets you around day-to-day, check out our list of the best all-round cars to compare different models.

Knowing what type of car you want, and what you want from it, will make your search quicker. Remember that, even if you think you’ve found the perfect car in terms of appearance, you should still take the time to make checks to be sure it’s a good buy.

Fuel types

These days, fuel types are a popular topic. With more options available than ever before, it can be hard to pick your preferred fuel. However, fuel will affect the economy of your car, so you’ll want to consider your car needs to get the most out of your chosen fuel type.

Petrol or diesel, electric or hybrid - which is best?

The main four fuel types to choose from are traditional petrol and diesel, as well as the more modern electric and hybrid.

Petrol cars are, in general, cheaper to buy as they’re less expensive to fill and they won’t need a service as frequently. They also have small, highly efficient engines so are better suited to shorter journeys. Although a petrol car might deliver less fuel economy than a diesel, it could still be the cheaper option based on running costs, reduced tax and pending legislation changes against diesel.

Diesel engines offer better mileage than petrol with around 25% improved fuel economy. Although they’re more expensive to purchase, and diesel fuel is more expensive per litre, they offer great efficiency and are more economical. On average, diesel cars are more efficient than petrol by about 9mpg, which can save you around £200 a year.

However, there’s concern over diesel recently with a suggested ban of diesel cars by 2040, leading Porsche and Toyota to pledge to stop the production of diesel cars at the end of 2018. While diesel is particularly beneficial for larger vehicles and for towing caravans, the increased restrictions around this type of fuel should be considered if you are planning to buy a second-hand diesel car, as they could limit you further down the line.

While petrol and diesel both have their environmental impacts, electric vehicles are seen as a solution to harmful gases. Using a battery-powered engine, electric cars give off fewer emissions and can save you money as you won’t need to fill up at the petrol station. However, electric cars do require you to have access to charging points, which can be a deal-breaker for some. There has been an increase in charge points across the UK, but they can still be scarce in more remote areas.

The rise of the hybrid engine over the past few years has created another option for increased fuel efficiency, bridging the gap between electric and petrol/diesel. By coupling traditional oil with a battery electric drive system, hybrids have increased fuel economy and reduced emissions. Hybrids are often generally more reliable than pure petrol or diesel engines as they are often built on a gas-powered platform, while still providing a back-up if the battery runs out unlike an electric vehicle can.

How your journey types affect your fuel type choice

Fuel type and the type of journeys you’ll be making go hand in hand and should be considered when you’re looking for a used car.

Will you be racking up high mileage driving long distance? If so, then a diesel car will likely be more economical. Hybrid may also be worth considering, as its electric engine will save running costs when compared to a diesel or a petrol vehicle.

Short journeys are inefficient for any kind of engine. Journey times of less than 15 minutes use a lot more fuel and do not promote fuel economy as the engine is taking time to warm up. If you are making frequent short journeys, you may wish to choose petrol as it’s cheaper to fill.

Finding a fuel-efficient used car doesn’t have to be a challenge. Consider the below helpful tips for buying a fuel-efficient car:

  • Understand the purpose of your car based on your lifestyle. What are the typical journeys you’ll be taking? Are you fighting your way through two-miles worth of traffic just to drop the kids off at a school, or will you be driving long distances on motorways travelling with work? Identifying a car that meets those needs is the first step towards fuel efficiency.
  • Get the right sized car to suit your needs. If you are a family of four, a coupe might not be the most practical solution. Instead, consider something like an estate that can comfortably fit your family (and the dog), but won’t weigh as much as an SUV, in order to gain greater fuel efficiency.
  • Ask whether you’
  • ll be using your vehicle to tow or carry heavy loads. Weight can impact your fuel economy, which is why a diesel engine is recommended for anyone regularly towing a caravan or trailer.
  • Consider diesel. As mentioned earlier, diesel cars have gained a lot of bad press recently, but that doesn’t mean they should be avoided like the plague. Diesel cars operate more efficiently than petrol so you could achieve around 50% greater fuel economy. However, consider factors such as age of the car, as much older cars will have a reduced engine efficiency meaning all black smoke and little value.

Impact of fuel on car performance

To understand fuel economy, you have to understand the engine’s power. A diesel engine has more power than a petrol engine, meaning it’s better at maintaining its performance and economy with a heavier load in the car. This means when you’re off on your holidays with your boot filled to the brim, you’ll be enjoying a smoother drive (even if the kids aren’t enjoying it so much).

Diesel also trumps hybrid cars when it comes to performance. As hybrids are dual-engine, their conventional fuel engine tends to be a smaller size than you would see in a purely diesel or petrol car. Because of this, these cars tend to be better for city driving where high speeds aren’t required. The combination of a traditional engine and a battery engine also increase the weight of hybrid cars, which can slow acceleration and speed.

Electric cars are often dismissed as providing a poorer driving experience. However, these vehicles have improved over the years to feature more light-weight batteries and offer better driving experiences. Certain electric vehicles can accelerate faster than their petrol or diesel counterparts, using increased torque. It’s worth doing research on electric vehicles if you’re looking for a high-performing car, as you might just be surprised by what they can offer.

Understanding the impact of fuel type on mileage of a used car

To understand which cars are more fuel efficient, it’s best to compare their MPG. Miles per gallon (MPG) measures fuel economy in vehicles and is the distance (in miles) a car can travel on one gallon of fuel. The higher the MPG, the better that car’s fuel economy is.

Many things can affect a car’s MPG. After the size of the car and the size of its engine, the fuel type it uses is the next element that will have an impact.

Diesel engines are more fuel efficient than petrol, while hybrid vehicles have even more of a positive impact due to the small size of the fuel engine. So, driving a mile in a hybrid vehicle will cost you less in running costs than driving a mile in a petrol car.

When considering mileage for an electric car, it’s not MPG that needs to be scrutinised but the car’s New European Driving Cycle (NEDC) range. If the vehicle was made after September 2017, this is known as Worldwide Harmonised Light Vehicle Test Procedue (WLTP). Pure electric cars today are said to be able to drive over 100 miles on a single charge, but this depends on the vehicle. The higher the NEDC or WLTP, the more favourable the car is for mileage.

Mileage and age considerations

Does low mileage really matter?

When it comes to getting a used car, there’s one age-old question: should you go for a car that’s newer or one that has less miles?

It’s true that mileage is important to consider as an indicator of the car’s condition. The average annual mileage is 10,000, therefore a five-year old car with a mileage of 50,000 or less is considered low. But is low mileage really important when buying a used car?

A low mileage can indicate that the car has been subject to less wear and tear, meaning fewer repairs in the short-term. However, this isn’t always the case; the condition of the car is dependent on how well the car is looked after. Due to this, you should be suspicious if a seemingly ‘low-mileage’ car appears to have a lot of damage as there is the possibility that the car has been clocked. This is when the odometer has been tampered with and the stated mileage turned back to show fewer miles than the car has actually done. If you suspect this, you can use the car’s vehicle history to determine what the real mileage is.

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Although low mileage is often seen as ‘preferred’, high mileage on a car isn’t necessarily a deal-breaker, providing the car has been well-maintained and driven carefully. Certain cars may withstand a large number of miles better than others, so it’s important to do your research beforehand and find out the model’s reliability.

Age

Older cars are generally cheaper to buy, but they might be in worse condition or face unknown problems further down the line, which is an added expense.

It has been suggested that the advancement in technology, found more frequently in newer cars, has made cars more reliable. This isn’t referring just to the all-singing-all-dancing media hub found on your dashboard, but to the technology used to control vehicle function, such as the oil and service lights. By making the driver aware of these issues as they occur, they’re more likely to get it repaired, making it more reliable in the long run.

So, does that mean you should exclude older cars from your search? Not necessarily. It all depends on how well it’s been looked after previously. A well-maintained car that’s 10 years old with one previous owner, may be a better investment than a three-year-old car that’s had numerous owners and hasn’t been well looked after.

Mileage or age of car: which is more important?

So, it’s back to that question: is it better to have a younger car or one with less miles? Both are important factors to consider, and both will have an impact on the price. For example, a two-year-old car is usually more expensive than its five-year-old equivalent, and a 100,000-mile car will be cheaper than one with 10,000 miles on the clock. But which factor is more important?

It’s hard to say whether one factor matters more than the other as age and mileage are so connected. Mileage can indicate a car’s age and vice versa.

The biggest issue with high mileage is that it indicates wear and tear. Engine parts, suspension and tyres are only designed to last for a certain length of time, so if the car’s been driven a lot, they’re more likely to need repair sooner. A car that’s young but has racked up a lot of miles is a particular red flag, as it suggests a lot of driving has been done in a short space of time.

It does depend on how the car has clocked up the miles as opposed to just how many it’s done. Cars that have done more than 20,000 miles per year may have spent a lot of time on the motorway, which actually means there’s been less wear and tear on the clutch (if it’s a manual car). It also means that the engine has been running for longer periods, which is better than a lot of stop/start activity.

A low mileage doesn’t necessarily mean the car is in better condition. A 10-year-old car with only 5,000 miles on the clock may seem appealing, but you have to question why the mileage is so low. If the previous owner hasn’t used the car much, they may not have spent much time maintaining the car’s condition either, so you’ll be left with the costly repairs.

In short, there’s no quick rule to determining whether mileage or age is more important when looking for a used car. Instead, it all depends on the type of vehicle, the type of driving that’s been done and the previous maintenance. So, look at the condition of the car first and then consider how well it compares to its mileage or age.

How to use the service history to check a used car 

It’s common knowledge that, to keep a car working at its best, you’ll need to service it regularly. It should be serviced once a year or at every 12,000 miles: whichever comes first, though this can vary depending on the manufacturers service schedule. If a car is older or has racked up a lot of miles, you might want to have it serviced even more regularly.

The car’s service book will detail its previous service history and list any faults and repairs. It’ll also show how many miles it’s been driven. By checking the service history, you can get a picture of how the car has been looked after and inform your purchase. It will also raise a red flag if the mileage on the clock doesn’t match what is recorded in the service book.

Some cars may not have their service log book for one reason or another. Luckily, there’s a way around this. If you have no details about where the car may have had its service, the first step is to contact the manufacturer and ask for details about your car, using the vehicle identification number (VIN), which can be found on the dashboard of the car. They may be able to tell you who originally supplied the car so you can locate the service history. Some manufacturers, such as Renault, even have centralised records that could identify its previous service history. If all else fails, you’re able to request a V888 form from the DVLA to request details of car’s previous owners.

Bear in mind that different manufacturers have a different standard service. For example, a Ford service will check basic requirements such as oil, tyres and filters to ensure the car is safe and running as efficiently as possible. BMWs, on the other hand, have different service packages, with the basic package just including oil and filter changes and brake fluid renewal. So, you might find different things have been kept in check depending on the car you go for.

Any car you buy should also have had a full service at the dealer, so any issues should have been accounted for before you make your purchase.

Getting the best price

Nobody wants to spend more money than they should, and it’s no different when it comes to getting the right price for a used car. The key to getting a good deal is to spend time researching before buying rather than purchasing impulsively. Knowing the different elements that can affect a car’s price, and what makes it a valuable buy, means you can walk away with a quality vehicle and eliminate the risk of overspending.

When buying a used car, you’re at an advantage where the impact of depreciation (AKA the car’s drop in value) is not as steep as it is with brand new cars, as the most significant initial drop in value for a car occurs in the first few years. Roughly speaking, a car loses up to 35% of its value in the first year, and this increases to 50% by three years. So, by buying a car after this point, you’ve skipped the major drop in value. You can find out more about what depreciation means for you here.

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There’s a number of things that affect the price of a used car, including:

  • Mileage: The more miles on the clock, the less the car is worth
  • Size: Big cars tend to depreciate more than smaller ones, as they cost more to run and often have higher maintenance costs
  • Number of owners: The fewer the better, as this suggests fewer miles
  • General condition: Any visible damage, however small, on the interior or exterior of a car can reduce its value
  • Fuel type: Electric cars depreciate over two times faster than pure fuel engine counterparts. With technology constantly evolving, the depreciation is much higher meaning an electric car may be ‘old’ even after a few years
  • Service history: The more detailed the historical service log, the better. This shows a car has been kept in good condition, with any repairs being completed before purchase
  • Fuel economy: The more miles per gallon (MPG) is often favourable. Cars that are more fuel efficient tend to depreciate more slowly
  • Age: Newer cars tend to lose value faster, with the biggest hit taking place in the first year

The best age for a used car

As age can have an impact on the value and price of a car, it would be fair to ask: what’s the best age for a used car?

A three-year-old car is often considered better value, as the biggest hit in depreciation would have occurred already. The car will have lost around 50% of its value, but should be as reliable as a new model, meaning no or few repairs. In essence, you can still get two thirds of the car’s life but at around half the price.

Cars aged under three years should also still be covered under the manufacturer’s warranty, so many people aim for used cars aged between two and three years old for the most value.

However, this doesn’t mean a used car older than three years is totally worthless. Before discarding older cars, check their condition and history to find out if they’re still worth investing in.

What is the importance of a car’s previous owners?

When it comes to buying a used car, you’ll have already accepted the fact that the car was previously owned (and hopefully, loved) by someone else. The number of previous owners can indicate a car’s usage over the years and its reliability. But how many owners are too many?

The preferred number of owners is just one, as it’s safer to assume the car’s been driven consistently and with care. But in the end, there’s no right or wrong number, it all boils down to who those previous owners were rather than how many of them.

You may have heard the myth that ‘one careful lady owner’ is the ideal, but we can confirm this isn’t true! There’s no correlation between the owner’s gender and the car’s condition, so don’t feel limited to cars previously owned by careful Cathy. Essentially, it all boils down to what condition the car is in once it gets to you that decides whether a car is worth buying or not.

The best time of year to buy a used car

As well as where you buy, when you buy can help you find your ideal car for the right price.

Do you want to drive around a 4x4 Discovery series with leather seats and snow tyres in the peak of summer? Probably not. Nor do you want to drive around in a sporty convertible during the British winter when it’s pouring with rain. So, the time at which you chose to buy a used car matters.

Buying a convertible in late winter or early spring should be cheaper than at the height of summer, when open-top motoring is in demand. Similarly, four-wheel drives should cost a little less when the weather is fine.

Try to think about what car you’d like in advance. That way, you might be able to time your purchase with when that particular car is less in demand, and save yourself money.

What to look out for

Buying a used car can be riskier than buying a brand-new car straight out the factory because you won’t always know its history, such as previous damage and any manufacturer faults. However, there’s still plenty of opportunity to get value from a used car.

The quality of used cars has improved over recent years, although one of the most important considerations still at the top of everyone’s list when buying a used car is reliability. After all, comfort, fuel economy and technological extras won’t matter if the car is breaking down constantly.

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Knowing what cars are vulnerable to faults and other reliability issues can shape your used car search. Using a car reliability index can also steer you in the right direction and help you to avoid expensive repair costs in the future.

Manufacturer and model

Audi A1, Kia Sportage or Land Rover Discovery: how do you know what’s best?

When you’re looking for a used car, there’s an overwhelming number of options available. Knowing what car is best suited to your lifestyle will help narrow it down, as will focusing on models and manufacturers known for their reliability. Our list of the most reliable cars – and those to avoid – highlights which manufacturers and models to look for.

The manufacturer of a car also has a part to play in the cost of repairs. As a general rule, the more expensive the car, the more expensive the parts to repair. Common cars, such as Ford, will tend to be cheaper due to the vast number of models produced. On the other hand, prestige cars like Mercedes will cost more to run and repair. We’ve listed the most expensive manufacturers in terms of repair costs here to help guide you.

Recalls

Whether a manufacturer has recalled a vehicle, part or accessory due to a safety problem, is something to consider when searching for a used vehicle. The part may have been repaired, but it may also indicate additional cost for future repairs.

You can check for any recalls online, using the vehicle registration number.

What faults do I need to look out for?

The car you want may look like its in tip-top condition, but you’ll want to take the time to inspect the car for any potential faults before you purchase it to save you money in the long run. Make a list of what to check and keep it in mind when shopping for your used car; knowing the common faults that appear in used cars will help to inform your checks.

Even if there’s minor damage to the car, it doesn’t necessarily mean that you shouldn’t buy it. Instead, negotiate with the seller to see if they can fix it before you buy the car, or ask them to drop the price. Our guide to valuing a used car should tell you whether a car is being sold for the right price or not.

Of course, beyond faults, you’ll need to look out for whether you’re being lied to about a car’s condition. Don’t worry, it’s unlikely that you’ll encounter a fraudster when buying your car from a used car dealer. However, we have listed the most common scams to be aware of when buying a used car for added security.

The benefits of warranties

When purchasing a used car, you want to feel secure in your purchase on the off chance that something goes wrong.

Having warranty protection can help put your mind at rest in case the worst happens and parts of your car need replacing. If you do have a warranty, it’s important to check the terms and conditions so you know exactly what is covered. For example, wear and tear - which includes batteries, tyres, exhausts and brakes - is generally not covered under warranty.

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Warranties on used cars also differ from those you might get with a new car. Older cars and those with higher mileage tend to include warranties that cover significantly less. It’s also important to check if the warranty has an age or mileage limit; if any repairs are needed after the car has reached the limit, the warranty won’t cover them and you’ll be left out of pocket. When buying a used car from a dealership, they might even have an “approved used car warranty” where there’s a requirement that the car has to be serviced by a specified dealer.

Some dealerships will offer warranties as standard on all the cars they sell for a certain amount of time after purchase. If you want to keep a car under warranty after this point, or if you want a higher level of cover, some dealers will give you the option to extend or upgrade your warranty. However, this will come at an additional cost but, dependent on the cover offered, can still prove valuable in the long run. Find out more about the costs of warranties here.

Warranties aren’t the only extras a dealer may offer: cover like paint and fabric protection or alloy protection can help you to keep your car in peak condition over time. Learn whether the additional extras are really worth it when buying a used car.

How to pay for a used car

Cash or finance: the best way to pay for a used car

When buying a used car, you’ve got two options: you can either pay in full outright using cash, or you can finance the car to spread the cost.

It’s often suggested that, if you’ve budgeted a certain amount for a car and have the funds available, paying cash may be the most favourable option as you won’t have to pay any interest on a loan.

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If you want something more flexible, financing could be the solution. Hire Purchase (HP) or Personal Contract Purchase (PCP) are ways of leasing a car on finance, where you put down a deposit of about 10% and then make fixed monthly payment over an agreed time period. You’re able to adjust the payment terms to suit your needs. The main difference between HP and PCP is that with PCP you don’t have to pay the full value of the car at the end of the contract (unless you want to own the car). This makes PCP a great option for those who’d like to change their car regularly. You can find out the pros and cons of each option here.

If you do decide to lease your car, there are often restrictions in place, such as only being able to drive a certain number of miles. Bear this in mind when deciding if leasing is right for you.

Another option is to take out a personal loan, rather than arranging finance through a dealer with PCP or HP. While a loan can help you to drum up the money for a car, you’ll need to be eligible to get the loan approved. Finance providers will take into account your credit history to make sure you can be trusted to pay the loan back. Loans can also be expensive to repay due to added interest, which is why you should shop around providers before taking out any loan. You’ll also need to be sure that you can pay the loan back before signing up for one.

We have listed the key things to consider when buying a used car on finance to support your financial research.

Overall running costs of a used car

It isn’t just the initial payment that you need to budget for when buying a car, you also need to work out if you can afford to run it on day-to-day basis. According to the Office for National Statistics, UK motorists spend on average £1,679.60 per year on car running costs. To put it into perspective, that’s the equivalent of roughly 3,359 pints of milk, or 466 pints at your local pub. You can use a car costs calculator as an indication of how much it costs to run a particular used car over one year; and find out how much you’ll have left for the pub.

You should also factor in the car’s warranty – usually they last three to seven years – as once this has ended, maintenance and repairs may become more expensive. 

The make and model of the used car will also affect your running costs. For example, luxury cars and sports cars tend to be more expensive to maintain due to their high-performance engines and high-tech equipment. You can find our list of the cheapest-to-run cars here.

Whether your car is petrol or diesel is another factor in running costs; for example, if you’re driving a vehicle with a diesel particulate filter (DPF). If you drive mainly in towns, you should avoid cars with a DPF installed because these can easily get clogged with low speed, short journeys and are costly to maintain.

Other fuel types should also be considered for lower running costs. Despite the higher sale cost, an electric car can save you money in the long run, thanks to reduced ‘fuel’ costs and tax exemptions. The cost of charging is the primary running cost, which is around four times less than petrol or diesel fuel. With fewer components found under the bonnet, electric cars also cost less to service and maintain. However, the biggest issue with used electric cars is how well the batteries keep their charge. Replacing the battery can be a significant cost, but some manufactures (such as Renault) offer a battery lease plan to reduce the impact of battery replacement cost. 

Other considerations to factor in when calculating running costs include car tax, servicing and fuel. The cost of these are all dependent on the age and condition of the car. For example, diesel cars usually have a higher tax but are cheaper to insure, and cars older than 40 years old are exempt from paying road tax.   

Budget planning and affordability of a used car

It’s important to consider your budget before you buy a car, especially if you’ve not got a particular car in mind. You might go into the showroom with a budget of £15,000 (or monthly cost of £200), but find a car that meets all your requirements at a higher price. It’s important to take a look at what’s currently available before you visit in order to set a realistic budget.

Remember, it’s not just the price of the car you’ll need to account for, but also its running costs and the other hidden fees involved with buying a car.

Our guide on making sure buying a used car is affordable can help you to create a budget.

Resale considerations

You’re looking to buy a car, so why would you think about selling it? Although you may have the car of your dreams right now, there’s every chance you’ll want something new down the line. Considering the car’s resale will help you to determine if the car will still be of value later on or whether you’re likely to lose money.

It’s important to take in factors such as the car’s age and current condition, which will ultimately affect the resale value. For example, a car that’s only one year old won’t have been through its biggest drop in depreciation, meaning you’ll lose out on money once this takes place. As cars older than three years have already felt the biggest impact of depreciation, they may be better value in the long term. Faded paint work, scuffed alloy wheels and stains on the car’s interior can have a detrimental impact on a car’s resale value, so you’ll want to keep your car in tip-top condition too.

Resale considerations are especially important when looking to purchase an electric car. The more miles an electric vehicle has driven, the bigger the impact on battery life, and this will reduce the resale drastically.

So, there we have it, a quick guide on key things to consider when buying a used car. For more information on what to look out for, how to choose the right car for you and where to buy, check out our advice section.