Never a better time to buy a car?

Cars in the current crises are hitting all time lows, with new, nearly new and used vehicles available to up to half of the price a year ago.

Struck by the lack of credit to new customers and the lack of funds for cash purchases, dealers are desperate to move stock. I was quoted 18.9% for a new car loan recently, which is pretty outrageous (from www.peugeot.co.uk) – the worse bit was I had to spy on the salesman’s fingers on the calculator to get the APR – he kept up with some spiel of “don’t worry about the APR, think of the monthly cost”

Prices may be bottoming out, with the car manufacturers not responding by dropping prices, rather increasing them in reaction to the decline of the Pound against the Euro; Ford and Vauxhall report the are increasing list prices by around 5%.

Also, car dealers are reporting used car prices have risen by £300 from December compared with prices dropping like a stone in the months leading up to Christmas.

Some remarkable deals are around, such as Broadspeed offering two-for-one deals one cars to tempt buyers. Vauxhall are also hoping to tempt buyers with giving you back 5% of your 0% APR finance loan for three years

Rich Headland, editor of Which Car? has said recently:

If you have the cash and your job is safe, there are some stonking bargains out there – particularly for new cars. We recently found Fiat Pandas being sold for new for less than one year old models at dealers.

Smaller cars seem to be holding their prices better than big cars, with people still smarting from high fuel prices in the summer. Car Tax changes also mean you could be paying £350 for your yearly car tax for a big car, to no car tax at all with a modern fuel efficient car.

Lets not forget the new VAT price as well, a 2.5% drop in what you pay which will be taken away in a few months time.

Car Tax Rules

A new bill to factor into your expenses this year are the new car tax rules – if you’re buying a car first registered after 2001 then the car tax you pay is set to change, due next year.

If you buy a very fuel efficient car, you could pay no car tax, but a gas guzzler could cost you £455 a year.

A BBC information page gives you the typical tax for the leading cars being sold today, find it here.

You may need to bear this in mind if your selling a car from after 2001 also, since the car may have been instantly devalued, or you may be lucky to find it has increased in value, since buyers will factor in they will pay no car tax on a highly economical motorcar.

There has been some backlash from the press that this tax will affect the poorest more, and Gorden Brown also faces backbench rebellion due to it acting retrospectively, hitting drivers who had no knowledge of the tax when they bought their car.

Like many government initiatives at the moment, the measure seems to have good intentions (cutting CO2 levels) but hitting the wrong type of people in the pocket, which after all is the majority’s main concern.

Judging by the pressure on Gorden Brown recently, this measure could be taken down, but expect some kind of initiative targeting green cars soon.

Its been a real noticeable change in policy in the UK where environmental concerns take front stage – as a child in the 80s I remember such initiatives would have been part of the “loony left”.

Tags: cartax, budget tips, car