Car Finance

3. Using a Dealer

You need to think about several factors when choosing a dealer to buy from.

If you need a number of cars, you may get a better deal from the dealer if you buy in bulk, or if there is the prospect of more business to come. Test the water before committing yourself to a sizeable deal.

3.1 Cost is important

• If the dealer is arranging finance as well as selling you the car, look at the whole deal and its component parts.
• You need to know the cost of the car (and how that compares with list price), the size of the deposit, the size of the monthly instalments, how many instalments have to be made, and what you get at the end.
• In the case of a hire purchase contract, ask what rate of interest is being charged. If your business is incorporated (a limited company), the dealer is not obliged to give the APR (annual percentage rate of charge), but most will. Be cautious about those that will only quote you a 'flat' rate.
• Make comparisons. Obtain quotes from at least three dealers, and make sure you are comparing like with like.
• If the figures quoted by your favoured dealer are well out of line, try haggling.

3.2 Convenience is also important.

• Think twice before you buy at the other end of the country, even if the cost is low. If things go wrong, you will have to see they are put right.
• If you have a service and maintenance contract, you may have to take the car back to the garage you bought it from.

3.3 Check the dealer's reputation.

• You want to know that the dealer will still be there, and prepared to take responsibility, if things go wrong.
• If the same dealer is to do your maintenance and servicing, check its reputation for competence and thoroughness in this area too.

3.4 Always make sure you have seen the vehicle's original documentation.

• Consider using the AA's Car Data Check service. For £30 (£25 online) the service will verify the vehicle's ownership and mileage, protecting you against dealers selling previously written-off or clocked cars. Visit www.theaa.com or call 0800 056 8040.