Save money on a new car by haggling

Collectively GB motorists could save themselves an incredible £286 million, if only they were prepared to haggle on the price of their new car, according to research from Sainsbury’s Finance.

Of the 1.5 million people planning to buy a brand new car between March and August 2008 up to 195,000 say they do not plan to haggle at all over the price. This is despite the fact that they could on average save an estimated £1,468.

In addition, the bank’s research highlighted that a further 403,000 people could also pay too much for their brand new cars because they are only prepared to haggle ‘slightly’ over the price. Only 62% of those people buying a brand new car said that they would haggle more aggressively – ‘very hard’ or ‘hard’.

As well as haggling over the price of the vehicle it also pays to shop around when looking for car finance. Given that around 24.5% of the purchase of a brand new car will be financed through a loan, it’s worth shopping around for a competitive rate.

Steven Baillie, Head of Sainsbury’s Loans said: “Our latest research reveals that the number of people looking to buy a brand new car has dropped by more than half a million on the previous six months.. Clearly people are more concerned about their finances and so those still looking to buy should haggle as hard as possible. Furthermore, those looking to finance their purchase through a loan need to make sure they shop around to find the best deal for them.”

In addition to offering consistently attractive rates, customers taking out a Sainsbury’s Loan can choose to make no repayments for the first three months, receive an instant decision and have their cheque delivered to their door within 24 hours. The bank's car purchase scheme, Drive, eliminates the need to haggle as it negotiates discounts on every make and model of a new car on the motorists’ behalf (sainsburysbank.co.uk/drive).

However, if you wish to haggle yourself, here are some tips from Sainsbury’s Finance:

You can often pick up a good price on a new car just before the introduction of new registration plates as any cars left over from the previous new registration become less attractive

When manufacturers are introducing a new model, you can sometimes pick up a great deal on the old model

Car dealers looking for a quick sale will sometimes throw in additional features that are not included as standard (e.g. better car stereos; sunroofs etc)

Be aware of the discounts you can obtain on the car you want. Having knowledge of these can be very useful when negotiating on price. The What Car? Target Price will show you the average price that you can expect to pay for a car, which on average is currently around £1,468 below the list price (April 2008)

Know what car you want and the size of your budget and stick to it

Keep your excitement in check. If you look too keen the car dealer may be less willing to negotiate on price. Make them think that you are prepared to walk away.