New car buyers still fail to haggle more on price

The number of people looking to haggle on the price of a new car over the next six months has increased significantly, according to new research from Sainsbury's Finance, but car buyers could collectively still overpay by more than £200 million because they are not prepared to haggle more on price.

Of the 1.33 million people planning to buy a brand new car between February and July 2009, up to 117,000 say they do not plan to haggle at all over the price they pay. This is despite the fact that depending on the car they want to buy, they could obtain a discount of up to 50% on the list price. Indeed, the average discount you should be aiming for on a brand new car is around £1,780, which is twice the average 2001 discount.

Sainsbury's Finance's research also highlighted that a further 304,000 people could also pay too much for their brand new cars over the next six months because they are only prepared to haggle ‘slightly' over the price. Only two in three (67%) of those people buying a brand new car said that they would haggle ‘very hard' or ‘hard'.

With consumer budgets increasingly stretched, the pressures of the last six months have lead to a change in approach from many would-be new-car buyers. In August 2008 just 79% of those planning to buy a new car believed they would haggle on the price. Now, 90% of those planning to buy a new car in the coming six months will attempt to negotiate a discount.

As well as haggling over the price of the vehicle, it also pays to shop around for a competitive rate when looking for car finance. Around 9% of the money paid for brand new cars will be financed through loans. Sainsbury's Finance offers one of the most competitive rates of 8.1% APR typical in the personal loans market.

Steven Baillie, Head of Sainsbury's Loans said: "The car industry is facing a very difficult time, with sales of new cars in February for example down 22% on a year ago. This means that now is one of the best times ever to negotiate a significant discount on the price of a new vehicle. It's a real shame some people still don't feel confident in doing so. We'd urge the 17,000 would-be purchasers that are undecided as to whether they'll try to negotiate a discount to give it a go.

"As well as obtaining a good deal on the price you pay for your car, it's also important that if you are planning to use a loan to help finance this, that you make sure you shop around for a competitive rate."

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 24hours.

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 particular make of car.

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.

For further information on Sainsbury's Bank Loans, visit sainsburysbank.co.uk