There was a time when some clever tactics could secure you some significant new car bargains. Sadly, those days are gone. But if you’re clever you can still get hold of a new car for less money than they’re being advertised for.
Why are there no discounts on new cars?
There’s a significant shortage in new cars. Sales in July 2022 were down year-on-year by 11 per cent. And last year was the worst sales performance for years with this year heading for even lower lows.
Visit new car sales websites and rather than the cars’ features, they’re likely to talk about availability. Anything you can get your hands on within two months is considered a good thing. If you want a specification that’s at all complicated, you could be looking at the best part of a year.
What about pre-registered cars?
Pre-registration used to be a ‘thing’. It was where dealers would effectively sell cars to themselves. By registering the car themselves they would hit manufacturer targets for sales numbers which in turn would get them a bonus. That bonus would be sufficient to enable them to sell the car to a ‘real’ customer, usually as a demonstrator, for a hefty discount without losing any money.
Now that most dealers can sell what stock they have several times over, they don’t have to pre-register cars to inflate their sales figures. And that means new car bargains are thin on the ground.
Pre-registered EVs still exist
However, some car makers do have pre-registered EVs to sell. This is because car makers are keen to shift as many EVs as they can because it helps them hit tough emissions targets.
If car manufacturers can’t average 95g/km of CO2 across their range, they are hit with fines by the European Union. Selling 0g/km EVs is a simple way of bringing that average down and enabling them to still market profitable large cars with higher emissions.
To do this, they will push out cars that have been pre-registered through their dealers. These will be at attractive prices.
One bit of good news…
The price of any car you’re looking to sell will have risen. Used car prices went up around 30 per cent in 2021 with some cars’ prices increasing by 70 per cent. That means if you’ve got a car to sell you need to be sure you get what it’s worth.
What if you’ve bought a car on a PCP?
If you’ve bought a car on a PCP (personal contract purchase) you will have the choice of paying a balloon payment to buy the car outright, handing it back or using any equity in the car to put towards the deposit on a successor.
What you should do is look at the guaranteed future value (GFV) of the car when you bought it. This is how dealers calculate your monthly payments. We can pretty much guarantee that the GFV will have gone up since you bought the car.
If you look at the car’s actual value – there’s a handy blog here to show you how – and it’s higher than the GFV, get a loan and buy the car yourself. Yes, if you want a new car, you’ll have the aggravation of selling your car. You won’t just hand it over. But if you give the car back to the dealer, you’re throwing money down the drain.