But how can you sell your old car, and buy a new one, safely and securely?
What’s your car worth?
To get an idea of how much your vehicle is worth, check out similar cars for sale online. Bear in mind that your vehicle’s mileage can affect its value as much as its age and condition.
A simple way to sell your car is to trade it in when you buy a new one from a dealer – this is known as a part exchange. But this won’t give you the best price, as the dealer will be aiming to make a profit when they sell the car on.
Selling your car privately should get you a better price, but it’s a lot more hassle. You’ll need to advertise the car for sale, deal with potential buyers and accompany people on test drives.
Once you’ve found a buyer, there’s the question of how to accept payment. Be wary of taking a cheque, or accepting a wad of notes, and handing your vehicle over straight away. A bank transfer might be a safer option.
Be cautious of anyone keen to buy your car despite not having seen it, or a buyer who wants the car shipped overseas – there are plenty of scams about.
Get the paperwork right
It’s important to tell the DVLA you no longer own the car. This will stop you being landed with any of the new owner’s driving offences or parking tickets. You can notify the DVLA of a change in ownership via post or online.
As the seller, you need to fill out section 2 of your car’s V5C document (also known as the logbook) then tear it off and give it to the new owner as proof of the transfer of ownership.
Then, to inform the DVLA that the car has been sold, you need fill in sections 6 and 8 of the V5C and put the form in the post. Or you can inform the DVLA online if you prefer.
Give the new owner the car’s handbook, keys, service history, and the MOT certificate.
You won’t be able to transfer the vehicle excise duty (car or road tax) to the new owner, but you can get a refund for any unused months.
How to buy a car
What’s your budget?
The most expensive cars are brand new – you pay a premium to be a car’s first owner. Used cars are much cheaper but might not be in perfect condition.
In general, if you’re buying a used car you’ll need to pay for it with cash or by using a personal or car loan. You can either buy a new car outright or via various finance or leasing options.
It’s important to incorporate running costs into your budget. How much will the tax and insurance be? How much will you spend on fuel?
You will also need to pay for an MOT and a service each year.
Check price guides and compare similar cars in the classifieds before you start looking at vehicles – you don’t want to be overcharged. Be wary of anything that seems like a bargain, or has a very low mileage for its age. If a deal looks too good to be true then it probably is.
Always do a test drive before buying. Try the car out in various conditions, such as stopping and starting in slow traffic and driving faster on a dual carriageway.
Leasing enables you to drive a brand new car by paying for it monthly. There are two main types of car leasing deals – personal contract hire (PCH) and personal contract purchase (PCP).
Under a PCH agreement, you’ll usually need to pay three months’ rental in advance and then monthly payments. You never own the vehicle and you have to hand it back at the end of the term.
With a PCP agreement, you’ll pay a deposit and then monthly payments. You’ll have the option to buy the vehicle at the end of the term in exchange for a “balloon” payment.
Sticking to the law
Vehicle excise duty can no longer be transferred to buyers so you’ll need to tax any car you buy.
Car insurance is also a legal requirement. If you sell a car and buy a new one you have two options. Firstly, you can ask your insurer to switch your policy to your new vehicle. You’ll have to pay an administration fee plus any extra premium.
Alternatively, you can cancel your insurance policy, receive a refund for any unused months (minus an administration fee), and then shop around for a new policy for your new car.
Either way, once you’ve got all your paperwork and admin sorted, you can enjoy cruising around in your new car.