When it comes to buying a car, even the most sensible and organised people seem to go into a complete panic, making stupid decisions and ignoring their own instincts because they are suddenly put under pressure in an uncomfortable environment.

The complete guide to getting a great deal on buying a car would fill a whole book, but since you’re probably here looking for immediate answers and advice on buying your next car, here are The Car Expert’s Ten Golden Rules on buying a new or used car. Follow these pearls of wisdom and you are far more likely to end up with a decent car – and get a decent deal on it, too.


Rule 1. Do not sign anything unless you are 100% committed to buying the car

Signing a form indicates you are legally committing to what that form says.  In a car showroom, if you sign a form then you are generally agreeing to buy a car.

You don’t need to sign anything for a quote, whether it’s for a car or for finance.  Any dealer that tells you that you need to sign anything “to hold the price until you make up your mind” is lying.  You don’t need to do that.  You are signing a contract to buy a car.

You may have to sign a test drive form to make sure you are covered for insurance purposes, but you don’t have to sign a vehicle order. If a dealer won’t allow a test drive without signing an order for the car first “subject to a satisfactory test drive”, walk away.

If you’re not 100% sure it’s what you want, or whether your significant other will like it, or if you haven’t got an insurance quote yet, or if you’re not sure it will fit in the garage, or for any other reason at all, don’t sign the form. Don’t be pressured into signing anything (see Rule 4 and Rule 9).  Only sign when you are good and ready.

The Car Expert ten golden rules - don't sign a contract unless you're 100% committed
The most important of all the golden rules – don’t sign anything unless you are 100% committed to buying the car!

Once you sign a contract to buy a car, you have legally committed yourself to it and you can be held to it.  Changing your mind after you sign on the dotted line is much harder than before putting pen to paper, and potentially much more expensive.

Next page: Before you reach for your wallet…

4 COMMENTS

  1. hi stuart ,
    is it right that a balloon payment on a bmw new car purchase deal , cannot be reduced by early repayment sums . ?we were told by their salesmen that we could reduce the balloon payment by early overpayments. how much interest is included in the balloon payment,? would it typically be more than the interest accruing in our regular monthly payment on a pcp deal?

    • Hi Robert. Normally no, the balloon amount at the end of the term is fixed as it represents the predicted value of the car at that time. Usually overpayments will reduce the monthly payment amount, which includes the interest payable on the balloon. Some finance companies will allow you to use overpayments to shorten the term, but this is less common.

      You pay the same APR on the balloon as you do on the monthly payments. However, you are paying the interest for the whole loan amount (inc. balloon) up-front. Making overpayments will reduce the total amount of interest you pay as you are reducing the amount of debt outstanding.

  2. Hi Stuart, I’m considering taking a PCP out on a brand new Audi S3, I have a considerable deposit that I can put down, 12k to be exact which makes the monthly payments easily affordable but my concern is, that after the 3 or 4 year payment term comes to an end, the difference between the GFV and what the dealership actually values the car at at the time of trade in, the actual deposit I’ll have to put towards another PCP deal will be considerably less and the payments will be considerably more. So 12k inital deposit turns into 2k after 3 years so in effect 10k lost! Are people aware of this?

    • Hi Rob. Always assume that you will have no equity over and above the GMFV. If you do, then great. But never start counting equity in advance.

      It’s not so much as “£10K lost” as “£12K of cash lost now but lower monthly payments for three years”. If you put no deposit in, your monthly payments would be much higher and you would also be paying interest on all that extra money borrowed, so your Total Amount Payable would go up.

      (But you are right in that most people seem to be unaware of this; they get sucked into a PCP and then get to the end of it and realised they are screwed when they want to change for another similar car)

What are your thoughts? Let us know below.