The process of how to buy a car and the cars you buy might have changed over the years, but one thing is certain – a new car is still one of the most exciting purchases you’ll ever make.

You may go to a dealership, buy online, or buy privately and there are pros and cons to each.

Going to a dealership can be a great way to buy a new or used car. As well as being close to home, your local dealership can offer a wide choice of cars and the opportunity to test drive any that take your fancy.

Buying a car online rather than in person will give you lots of options, but at the same time it’s easy to get overwhelmed with the extensive choices that come up on even your first internet search.

If you buy privately, you may get a great deal – and it might be local – but you’ll have less choice. You’d probably have done some research online to find the car, but a private seller might have to work harder to gain your trust. 

Buying a new car: step by step

When buying a new car, make sure you do the following:

1. Research the car market
2. Define a budget and carry out some research
3. Compare the market and negotiate
4. Take a test drive
5. Check the vehicle’s paperwork
6. Find your finance deal (if applicable)
7. Check the small print
8. Get an insurance quote

Research the car market

Buying a car is most likely the second biggest investment you'll make after buying a house, so you should do your homework. Whether you’re buying a new or used vehicle you should find out as much as you can about it before sealing the deal.

There are published rankings of the most reliable cars, and if you're buying a used car don't be afraid to take an expert with you to examine the vehicle’s condition.

Define your budget and know what car is best for you

Before buying a new car – and even before heading into the showroom – work out how much you can spend. You might be digging into your savings, or signing up for a car finance deal – either way, be realistic. Overstretching yourself financially can lead to problems later on – especially if you have little in savings or your income drops unexpectedly.

Use a budget planner to work out how much you can afford to spend.  There are plenty around, including one on the Money Advice Service website.

Remember – it’s not just the outright cost of the car you need to consider, but the regular running costs, too. Sure, the price of a large SUV might be in your budget, but how much will a month’s worth of diesel set you back? Consider the cost of:

• Fuel
• Tax
• Insurance
• Parking costs
• Servicing and MOTs

If you’re set on buying a car from a dealership, it can be tempting to head straight there. But going in blind is a bad idea. While your dealership will stock a wide selection, you don’t want to limit yourself to what’s on the forecourt on the day.

So if you want a car that’s perfect for you, you need to have a strong idea of the type of car you need – rather than want – before visiting the dealership. Think about how you’ll use the car.

Buy a car magazine and have a flick through – is a people-carrier a no-brainer, or does a smaller hatchback make more sense? Make a note of any suitable models within your price range.

Should you buy a brand new car?

Since 1 March 2019, all brand new cars have the new 19 registration number plate, which took over from the previous 68 registration issued in September 2018.

Buying a brand new car can be expensive, but as it’s such a popular time to buy, dealers often undercut each other by offering discounts, low finance rates or even higher specification cars for the same price, so you could land yourself a great deal.

Compare the market and negotiate between dealers

While you might be more familiar with the idea of visiting a local dealer to buy a car, it’s now really easy to buy a new car online. You can compare prices from dealers all over the country without having to haggle in person or over the phone, because a car broker does that for you.

Once you’ve narrowed down your search to two or three models, it’s time to get out your phone, laptop or tablet, and start shopping around.

Search any car broker and you’ll find a range of pre-negotiated discounts from dealers. Once you’ve told them what car you want, your broker might be able to negotiate further on your behalf to find you an even better price.

You’re now ready to visit a dealership. If you’ve done your research thoroughly, you might even know the exact make and model you want – but it’s still wise to keep your options open.

Try not to buy a new car from a dealership on your first visit. Take a few models for a test drive, gather further information, and then leave. Even if you think you’ve reached a decision while you’re there, wait until you get home before making a final call.

Then it’s time to get quotes from different dealerships. This will give you the upper hand in price negotiations, and if dealers know they’re being pitted against each other, it’ll be easy to get their best offers right off the bat. Doing this could save you a lot of money, but even if it’s just a couple of hundred – you’re still making a saving.

Take a test drive

It’s important to give your car a thorough test drive before buying it to check if you’re comfortable driving it. Buying a new car online doesn’t mean you can’t take a car for a test drive. Visit a dealership with your preferred model in stock and ask to take a test drive before making your final decision.

When you’re on the road you should:

• Test out the car on different roads including dual carriageways and country lanes
• Check the car accelerates smoothly and brakes effectively
• Try manoeuvring in the car – reversing, parking, etc – to check your view from all angles
• Test the car’s gadgets and features, such as heated seats and Bluetooth

Things to consider if you're buying a used car

If you're looking at buying a second-hand car you need to make sure you run a few checks before driving off. First things first, find out if the car is worth the price being charged by putting the car’s details into our car valuation tool.

Used car buying risks are on the rise with outstanding finance a particular concern, according to My Car Check, as a quarter of the 30 million cars on UK roads have outstanding finance. Did you know it's illegal to sell a car with outstanding finance, such as PCP, without informing the finance company?

Vehicle checks can highlight anything from a legal registration plate transfer to a major issue such as a previous write-off.

How to sell your car

If you have a car to sell, make sure you shop around to get the best price for it. Make the most of the internet and traders – you can part exchange on your new vehicle for an easy option, but make sure the sales adviser is giving you the best price out there. Don't be afraid to contact other garages to compare prices.

Check online buying sites also, but you’ll probably find privately selling your car will give you the best return.

How to negotiate with salespeople

Here are some top tips for how to get the best possible price at a car dealership:

• Be friendly and polite, and never let the salesperson know your upper limit
• Don’t let them know if you’re a cash buyer. Dealers often make bigger profits on finance deals, so let them bargain on this basis
• Start off by stating an amount lower than what you’re prepared to pay and then haggle up from there
• When you make an offer, don’t say anything until the salesperson responds
• If you’re struggling to get a discount, offer to close the deal there and then if you can reach an agreement on price
• Resist upsells. Even if you need a product or service, remember you can often find them elsewhere at a lower price
• Don’t be afraid to walk away from a bad deal

We’ve worked with a panel of anonymous car salesmen to find out all the tips the dealers don’t want you to know. Read more in our guide to the Secrets of the Salesmen.

Check the vehicle's paperwork

If you’re buying a used car, make sure it comes with the big four:

1. V5C Registration Certificate (log book)
2. MOT (if over three years old)
3. Service history
4. Handbook

Then do the following checks:

• Are all of the above documents present?
• Do the Registration and Chassis numbers on the V5 match those on the vehicle?
• Are the personal details, such as full name and address, the same as those of the person selling the vehicle (in the case of a private purchase)?

Choose the right finance

Once you've found your dream car, it’s time to pay. If you’re paying cash, it’s usually pretty straightforward.

If you’re opting for finance, make sure you shop around and don't just accept the dealer's offer straight away. While they can sometimes be competitive, some dealers rely on you not realising you can shop around for car finance to make a bit of extra money. 

Admiral offers several car finance options, and you could get a quote in just a few minutes.

Read the small print

Reading the small print is one of the most important steps in the buying process. It’s easy to be taken in by signs for 0% APR deals, low monthly payments or even free fuel and insurance.

However, there may be limitations and exceptions that are important to be aware of before you sign on the dotted line.

Even if the sale terms and conditions are long and boring to go over, you could spot extra fees and charges, or regulations you didn’t know about.

You don’t want any nasty surprises in your terms and conditions upsetting all the budgeting you’ve done so far, so take the time to read over the small print before you commit yourself to the purchase.

Get insurance quotes for cars online

Make sure you arrange car insurance before you become the car’s owner and certainly before you drive it away.

Your final insurance cost will depend on a combination of factors, including:

• How old you are
• Where you live
• How much you’ll be using the car

When it comes to insurance, cars are put in groups from one to 50, with 50 being the most expensive. The cheapest cars to insure are often the lowest numbered, and these are usually relatively inexpensive models with small engines and low-priced parts. Find out more in our guide to car insurance groups.

Once you’ve decided on your car and you know when you’ll be able to take it home with you, contact us for a quote.

Buying a car is a big deal. While it’s tempting to get excited and make a hurried decision, remember that the time you spend finding the right car will really pay off in the long run.

By following these steps you should find a car you can comfortably afford, is the right size and you’re proud to be seen driving. Happy hunting!