It's ‘credit' crunch time for the ‘58' plate

Motorists opt for used rather than new cars but are losing out on extra savings by not haggling on the forecourt or researching finance and insurance options.

The launch of the new ‘58' registration plate on 1 September should fuel interest in both the new and used car markets, yet motorists could be missing out on big savings by not doing their homework and not haggling on the forecourt for the best deal, according to new research by esure car insurance.

With the words ‘credit crunch' on everyone's lips, it's perhaps unsurprising that 64 per cent of motorists polled are looking to buy a used rather than a new car for their next purchase. But even with the current strain on household budgets, only two thirds (68 per cent) of motorists questioned admitted they would always bargain down the price tag of a new or used car - a substantial purchase for anyone in the current economic climate.

Alarmingly, 68 per cent of motorists surveyed said they don't do any research at all on finance deals available to them when buying a car - such as looking for the best rates on loans or credit cards. Women are likely to get the worst deal with almost three quarters (72 per cent) of those polled admitting to never doing their sums or their homework beforehand, compared to 64 per cent of men. In fact, only 13 per cent of motorists spend more than a couple of hours finding the most suitable finance option before signing on the dotted line and paying for their car.

Motorists also seem to be choosing the easiest option when it comes to car finance: one in seven (14 per cent) motorists surveyed took out the dealer finance offered by their car salesman when buying their last car. Almost one in ten (9 per cent) financed their car using a personal loan, whilst around one in twenty (4 per cent) of those polled just swiped their credit card for the full amount when they paid for their last car. Not researching which type of finance options are the most suitable and not comparing APRs or a product's flexibility can cost motorists dear.

Even when it comes to insurance, drivers are potentially leaving themselves exposed to higher premiums by not checking ahead. A quarter (24 per cent) of motorists surveyed wouldn't get an insurance quote before deciding on a new car purchase. In fact, only 70 per cent would check the insurance group of the make and model of car they're looking to buy to ensure that the new insurance premium is within budget and that they are still insurable.

Mike Pickard, Head of Risk and Underwriting at esure car insurance, said: "With the cost of motoring on the up, it's more important than ever for drivers looking to change their car to make sure they get the best deal. Whether it's bargaining on the forecourt or shopping around for the right finance package or insurance cover, an hour or two of researching at home can make a real difference to your wallet."

The Welsh are most likely to pay over the odds for their set of wheels - they are the worst hagglers in the UK with a fifth (19 per cent) of those questioned never bargaining in a car showroom. Scots are the most likely to do a deal with their salesman when it comes to paying for their new car with over a fifth (22 per cent) opting for showroom finance. The Welsh favour taking out a personal loan when financing their new motor (28 per cent) whilst Londoners like to slap it all on a credit card (10 per cent). Car buyers in the South West prefer to save up - with 61 per cent using their hard earned cash to pay for a car outright.

Gender and age breakdown

Women are most likely to be ripped off - almost a fifth of women (17 percent) would never negociate on the displayed purchase price of the car compared to eight per cent of men. The over 65s are most likely to lose out when it comes to finance deals though - 80 per cent of those surveyed didn't do any research into finance deals when buying their last motor - whilst five percent of budget-conscious 18 to 24 year olds spent over 30 hours number crunching before signing on the dotted line.

esure offers motorists looking to buy a new or used car some money saving tips:

Shop around for insurance before signing on the dotted line: drivers looking to buy a car should shop around for insurance quotes before putting a deposit down to see by how much their current premium will be affected and to check that it's affordable. Price comparison sites such as gocompare.com are a great way to check the market.

Always haggle down the price: don't think that the displayed price tag is set in stone, especially in the current market. Always start with a low offer price and try to get some accessories such as new car mats or six months of road tax thrown in.

Check the market value of your trade-in: if you're looking to trade in your old car then make sure you know its value before you start car shopping and consider selling it privately to get the most money back.

Find the right finance deal for you: whether it's a flexible personal loan or a zero per cent credit card, always spend time finding the best rates and type of finance for your car purchase before you step onto a forecourt.

Set a budget and stick to it: always stay within budget and don't fall for the hard sell. If a salesman won't budge on price, be prepared to walk away rather than pay over the odds.