Buying a used car can be a great way of saving money – find out how to protect yourself and avoid common pitfalls.
Buying a car - whether it’s new, from a used car dealer or a private seller – is one of the most expensive things you will ever buy, next to buying a home.
Buying a used car is fraught with pitfalls, but if you do your research it can also save you thousands of pounds.
The main problems with used cars are:
It can be difficult to ensure you know what you're getting
It can be difficult to know what the car is worth
When buying a second-hand car you may also want to shop around for car insurance before you go ahead and buy it; a hefty insurance bill could wipe out any savings you hope to make.
A study by the Office of Fair Trading found consumers buying a used car lose an average of £425 each – a total of £85m a year – through having to fix unresolved faults that are the dealers' obligation to correct.
According to Citizen’s Advice used car sales are still one of the biggest areas of consumer complaint across the UK.
There are precautions, preparation and checks that you can do before buying a used car.
Not only can they help you bag a bargain, it also means you don’t end up buying a car that has been badly damaged, stolen or illegally altered
You still have legal rights even if you don’t do the proper checks; you may have a legal right to a repair, the cost of a repair, or some or all of your money back
A used car dealer is a business specialising in selling cars.
When buying from a dealer look for:
An established dealer with a good reputation
A dealer that is a member of a trade association such as the Retail Motor Industry Federation
A dealer who follows the The Motor Ombudsman's code of practice and has their cars inspected by an independent engineer or motoring organisation
This is one of the riskiest ways of buying a used car as you don’t have as much legal protection as buying the car from a dealer. For this reason, it’s even more important to be vigilant and keep the following in mind:
The car must match the seller’s description; it must be roadworthy and the seller must have the legal right to sell it to you
You are responsible for making sure the car is “fit for purpose” before you buy it
Some unscrupulous used car dealers pretend to be private owners to offload faulty or stolen cars
Auctions don’t offer the same legal protection as buying from a dealer so make sure you know the auction house’s terms and conditions of business.
Wherever you buy your used car you will need to do some simple checks to reduce your chances of ending up with a car that’s being sold illegally or has had major repairs. Take a look at the tips below to help:
Firstly, it’s well worth paying for a private history check - also known as a ‘data check’. This will cost up to £20 and will tell you whether:.
The car has been reported stolen
The seller still owes money on the car; which means you may end up in debt if you buy the car
The car has previously been in a serious accident
The car is showing the correct mileage
The car has been written off, repaired and then returned to the road
You can get a car history check by searching online for websites that check vehicle details.
To do this you will need the following information:
Registration number (on the number plate)
MoT test number
Make and model
You can go online and used the DVLA’s free online vehicle information checker
The information the DVLA holds should match the dealer’s/seller’s information.
Vehicles need regular MOT tests to make sure they are roadworthy. You can check the MOT history of a car for free on Gov.uk.
If there are any gaps in the MOT history you may want to think twice about going ahead with any purchase. Remember though that a car might not have needed an MOT if it was unused or registered off road - statutory off road notification or SORN.
The car’s V5C registration document gives details of the registered keeper and all the car’s previous keepers. This is a red document issued by the Driver and Vehicle Licensing Agency (DVLA):
Check that the registered keeper shown on the V5C is the same person as the seller
Check whether it has a watermark and that there are no spelling mistakes
If the log book - V5C registration certificate - doesn’t match the car on the DVLA records you need to report this to the DVLA
When viewing a used car, look for its VIN (Vehicle Identification Number), which can usually be found at the base of the windscreen, under the bonnet, and stamped into the framework under the carpet by the driver’s seat.
Make sure the VIN matches the VIN found in the V5C registration document
Check that the VIN plate has not been tampered with
Do your research by looking at price guides and comparing similar used cars for sale online and in car magazines.
Arrange car viewings for the day, and at the seller’s home if possible. Try not to go when it’s dark or raining as this can hide defects, such as dents and scratches.
Check beneath the car and under the bonnet for rust and any signs that the car’s been in an accident. Also check the tyres are in good condition.
A simple inspection of a used car can help you pinpoint any obvious issues that mean you should avoid buying it.
The locks are different from one another, suggesting that the car’s been broken into
There are signs of forced entry - make sure all the windows, including any sunroof, open and close normally
If the mileage looks too low for the age and appearance of the car the odometer may have been tampered with, this is called known as ‘clocking’
A ‘cut-and-shut’ is where pieces of two or more vehicles are welded together. This is illegal, but you need to watch out for this. You can check by pulling up carpets and trims for signs of hidden welds and look at paintwork that doesn’t match.
A full history check before buying a used car will show if the car’s been stolen or written-off – a cut-and-shut could be both
Always view the car in dry weather in the daylight. If you are buying from a private seller do so from their home so you have their address.
When taking the car for a test drive, keep the following in mind:
Drive for at least 15 minutes on different types of road and try and drive for an hour if you can
Check that all warning lights operate normally
Check that the brakes work effectively and there are no unusual noises
Make sure the steering doesn’t vibrate or pull to one side
Check the seatbelts operate correctly
You may also want to get an independent report to give you detailed information about the car’s condition. This will cost around £100 to £200 and the Motor Ombudsman will have advice on where to get an independent report in your area. The Motor Ombudsman is a government-backed self-regulatory body for the motoring industry.
Before you take the car for a spin, you will also need to make sure you are insured to drive the car. You may already be insured via your own car insurance but check with your insurance company first.
If you don’t have insurance, a trader or private seller’s insurance might cover you - you’ll need to ask them.
Alternatively, you may want to search quotes for temporary car insurance. Cover can be for as little as an hour, making it ideal for a test drive.
Whatever you do, don’t test drive a car if you’re not insured as you’ll be liable for any damage you cause and you could get points on your licence.
When agreeing on a price for your used car, don’t be afraid to haggle. The Money Advice Service has useful guidance on negotiating when buying a car.
Make sure you get the original (not a photocopy) of:
The log book (the V5C registration certificate)
The valid MoT test document
Never buy a car without the log book.
You’ll need to pay vehicle tax as soon as you buy the car as the seller cannot transfer any tax they have paid
The phrase ‘cooling-off period’ is the period of time you have to change your mind about something you’ve purchased from a distance.
The statutory minimum a seller must offer you is 14 days. If you have bought your car from a private seller there is no cooling off period if you have bought it in person
If you have bought your car from a used car dealer, the cooling off period will only apply if you have bought it via finance, as financial products – such as loans – have to include a 14-day cooling off period
The cooling off period only applies if the car is roadworthy and you have changed your mind
Paying with cash is the cheapest way to pay for a used car as there are no extra fees or interest and often you get a discount for paying cash.
But if something goes wrong with the car you won’t have the protection that some credit arrangements offer.
Paying via credit card means you can be flexible with making larger payments when you can afford them. It also means you’ll get protection for goods costing between £100 and £30,000, even if you only paid for a small part of the cost on a credit card (this is called ‘section 75’ protection). Should something go wrong with your purchase, the credit card provider and seller are jointly liable.
The downside of using a credit card is that you may have to pay interest, making this more expensive than paying with cash.
Alternatively, if you pay with a debit card, you might have protection if your card provider has a chargeback scheme, and you won’t be charged interest.
Transferring the money using a bank transfer can be more preferable to carrying large amounts of cash.
You can pay with a CHAPS payment but there will be a charge – and your bank may have an upper limit on the amount you can transfer.
With this option, you will have to pay interest, but you might also have extra protection. This is because not only do you get protection through the dealer, you also get protection via the finance company.
This is another form of loan but means you don’t own the car until the last payment is made and the car can be repossessed if you can’t keep up the payments.
Used cars can be much cheaper to insure than brand new cars, but there are other steps you can take to reduce the cost of your car insurance.
Having a black box fitted
Lowering your mileage
Parking in a private driveway or garage
Considering a multi-car insurance policy
Choosing a car from a low insurance group
Having a black box fitted means your driver behaviour is monitored. The telematics box reports back to your insurer about how you accelerate, brake and negotiate sharp bends, as well as what time you drive and on what sorts of roads.
The data is analysed, and if your scores are positive, your car insurance may be discounted over time.
If you drive fewer miles in a year this could result in a lower car insurance premium, as there is less risk of you having an accident and making a claim.
Parking in a private driveway or garage can also attract a discount. Car insurers may take into account where you park, depending where you live.
If your driveway is cluttered with cars, you may want to consider a multi car insurance policy
The lower the value of the car and the cheaper it is to repair, the less you’ll pay for car insurance.