Choose a pre-registered car
These are discounted new cars that the dealer registered as sold to look like they hit monthly targets. They shouldn't really do it, but it's good news for the buyer; deals we saw recently included £4500 off a Citroen Grand Picasso. Only drawbacks are an out-of-date plate number and second-owner status on the V5.
Save using brokers
Sample saving from a broker: £4600 off a new VW Passat estate. Dealers use brokers to find buyers for cars they're having trouble selling, or when they need to hit sales targets. To them brokers are like outlet stores. Some can be fly-by-night, so aim for established players like Broadspeed.com. Typical brokers cars might be less popular - the Passat mentioned is petrol powered for example.
Grab an interest-free loan
Free money is obviously a Good Thing. Interest-free loans are part of the manufacturer's arsenal to tempt you into the showroom and are a good way to save money. A couple of things to watch for. Firstly, the deposit needed is often substantial, maybe 40 per cent of the price, which you'll have to find from somewhere. Secondly, the salesman could use the zero-per cent deal to stall your attempts to haggle the list price. Don't let him - interest-free loans are usually backed by the manufacturer, not the dealer, so there's that margin still to work on.
Avoid conventional autos
A conventional automatic gearbox will increase fuel consumption by roughly 10 per cent compared to a manual. However more and more manufacturers are producing semi-automatics that self-shift without the fuel penalty. Examples include VW's twin-clutch DSG gearbox and Citroen's EGS. Choose the twin-clutch system if fast gearchanges are important to you; semi-automatics can feel sluggish next to a regular auto.
Let the APR rate dictate your loan
Avoid expensive loans by comparing the annual percentage rate (APR). By law this should be displayed loudly and proudly by the dealer, but slippery salesman will often rubbish APR as a way of calculating interest, instead pushing the base rate. Don't let them do it. APR includes all costs and so is a more accurate indicator of how much you'll be paying.
Ask to fill out a customer satisfaction survey
Sounds strange, but during one undercover story we were involved with, a Toyota salesman said he'd give us a better discount if we praised the dealer in a satisfaction survey. According to him, Toyota raised the dealer's profit margin from 3.5 per cent to 12 per cent if they could prove they had happy customers. So fill away. After all, if you get the discount you'll be happy.
Buy on a PCP
The cheapest monthly payments usually are to be found on PCP (personal contract purchase) agreements. This system calculates what the car will be worth at the end of the three years, and divides up the difference into monthly payments. To buy the car outright, you have to pay the car's worth (the guaranteed future value) at the end, or just hand it back. PCPs are usually open to people with poorer credit ratings, but the APR rate is high because that final payment sits there accruing interest.
Lease the car
Leasing brings cheaper payments than standard hire purchase because you're not paying for the car, just a figure based on the value drop and the cost of the money. The deposit is small too - usually just three monthly payments up front. Over the length of the agreement you pay the monthly fee, then hand the car back. Often manufacturer lease rates are cheaper because car companies prefer to hide big discounts in the lease fee, so you'll save money there too. Leasing also fewer acceptance problems for people with poorer credit ratings than straight car loans.
