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Driving a bargain
For many of us, buying a car is probably one of the biggest purchases we will ever make. It pays to think about it carefully and make sure you know your rights.
Start by reviewing your money situation and work out a budget. This will help you decide how much you can put towards buying a car; whether it will be new or second-hand; and, importantly, how you'll manage the ongoing costs such as car tax, insurance, servicing and repairs.
If selling your existing car, see if you can trade it in to a dealer to offset the cost of your next one. Until March 2010 a government-backed scheme may grant you £2,000 discount on a new car if you trade in one older than ten years.
A new car may come with a special deal such as a warranty or servicing option, and you won't have to worry about an MOT for a few years. A second-hand car costs less, but do check out its condition and its history.
Cars lose value every year through depreciation. Bear this in mind, especially if you take a loan over several years. You may find that when you come to sell the car, you owe more than you can get for it.
You may be able to negotiate a better deal by paying cash. But in a private sale only do so if you know the person and are sure the car paperwork is genuine.
If buying a car with a loan, credit card or hire purchase, find out the total cost of the loan by checking the APR (Annual Percentage Rate), which all lenders must tell you. Ask about other fees and charges.
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