Friday, 2 November 2012

How Do I Get A Better Car?

Today, most people need a car.

I say need, because we all need to travel these days. The vast majority of the population do not work on the land anymore, but in an office somewhere, usually in the nearest big town or city, so you need a means to get to your place of work.

But do we need cars? Well, I'd argue that it's often STILL cheaper to drive than use public transport, despite the ever spiralling cost of fuel. The added convenience cars bring is just a bonus.

Of course most of us think it would be nice to have a better car too, but how affordable is it? And can you trade up on the cheap??

I've given this a lot of thought, because I love cars. I am a TOTAL petrol head, so transport is far more to me than getting from A to B on time. It's also about enjoyment and comfort. Why? Because  I spend a lot of time behind the wheel.

I don't spend all this time driving because I live so far from work, or the nearest supermarket, because that's not actually the case. It's more to do with my son, and making sure we visit both sets of grandparents as often as we can, although when I did work in the nearest city, commuting made up over 3 hours of every day!

Anyway, as usual, I digress.

The main point of this article is how to get a better car. I'm assuming you haven't currently got a "better" car because you can't afford it right now, so we're going to talk about how you can gradually work your way up the car "ladder", with some tips and tricks along the way.

Firstly, you need some cash to trade up. I'm not talking about raising enough to trade in your 10 year old VW Golf for a brand new Audi V10, but you can do it a little step at a time, and your old car is where you'll get the cash to do this. The first step is selling it.

Your current car may not be worth a lot, but with a bit of elbow grease and some care, you can make it more sale-able and therefore get more cash for it. A clean and shiny car will always sell for more than a dirty smelly one, all other things being equal, so get scrubbing, get polishing, and hoovering. This is something I've done a few times now and it works really well - It's simple psychology, the better a car looks, the easier it will be to sell.

Hopefully, you now have a bit of cash to buy something a little better than before. Now buying a car involves just as much psychology as selling one, but obviously in reverse. One thing to always remember is: Don't get too attached. That's a quick way to making a bad purchase. We're working our way up here, and making an investment, not making a final decision on something we really want, that comes later when we've got the cash for it.

So, don't dismiss a car just because it doesn't look great. It may mean the car hasn't been looked after but it may also mean that a quick polish will unveil a bit of a gem. Determining whether the car has been looked after is more than just the state of the paint work, and it's not particularly hard either. If the owner presents you with a sheaf of bills, it's a good bet they have cared for it. A quick look at the engine bay should help too. If the engine looks like it hasn't been touched in years, then maybe it hasn't. Here's a couple of tips:

Click for attribution
Oil change services are the services that should be done most frequently. When the oil is changed, the oil filter should be changed at the same time, so it shouldn't look too old. They are a round cannister (any colour), generally found somewhere on the side of the engine block and look like this -> 

On my car, it's found just behind the radiator so it rarely sees a lot of dirt and still looks fairly clean upto 10,000 miles when I change it.

Check the spark plugs: A friend of mine told me her local mechanic always looked after her car. She liked him because he was always cheap. After looking her engine over one day I could see why - the spark plugs were so old, they'd rusted into their holes, and one of the spark leads was much newer and a different colour to the others. He'd done practically nothing and taken her money regardless.

Although it's not conclusive, evidence of work having been done and new parts fitted is a good sign. Of course if a full dealer service history is present and stamped then that's also a very, very good sign.

And get some experience. When you've identified a particular model you are thinking of purchasing, don't buy the first one. See a few, and drive a few first, so you know what it should feel like.

Anyway, that's enough about actually buying cars. There are plenty of blogs about on how to spot or find a good car and buy it on the cheap, (or maybe I'll cover that in a future post).

So you see the idea. You sell high, buy well and repeat up to a point. You need to do it reasonably often as well because nearly all cars lose value over time and you want to make your money grow. One thing to be aware of is when manufacturers release a new version of one of their models. Overnight, all the older models sink in value so remember, keep an eye on the car news to use this to your advantage depending on whether you are buying or selling at the time.

After a while, you should get to the point where the cars you are buying are valuable enough that they lose a significant portion of that value over the year, and the buy/sell cycle is no longer covering this. If the kind of car you want is still out of reach you'll have to consider a few things.

  • You are at the point where you must save a bit between each car if you want to keep trading up.
  • Finance
Yes, I mentioned borrowing. You can use the money from your old car as a deposit against some newer metal, and pay for the use of your new car month by month.

It's at this point that I should point out that using finance to get a better car is only really something you should look at when you are financially savvy and stable enough to know what you are getting yourself into. If you have been reading this blog because of the debt advice I've written about, my advice would be to sort your debt first before you even think about financing a car.

If you can afford to finance a car, pay close attention to the finance deals available and the maths involved.

For example: There are deals where you put a deposit down, make your monthly payments over a few years, and then finish the deal by paying a last "balloon" payment at the end of the contract whereupon you keep the car. If you don't pay the last balloon payment, you simply hand the car back. All well and good, but you're left without any of the cash you've managed to accumulate. Maybe that's OK if you got to drive your dream car for 3 years, but that's your choice.

Be aware that dealers can finance your purchase in a number of different ways and ask about what options you have if you want to pay the finance off early (returning the car, selling it etc.), or want to upgrade before the end of the contract. Also, you should know that being directly financed by the dealer is not the only option. Many dealers have ties with 3rd party lenders to cater for customers with credit scores that aren't so good, or downright terrible. After all, the dealer wants to make a sale, and in this case a loan company has some security to lend against.

In conclusion, this does take some time to achieve, it's not something you can do overnight, but by using these tactics, over time you can build up to a car that you really want.


  1. I too work in an office, but I've chosen to go car-free for the last 4 years. I bike to work (11km) about 8 months a year and bus the rest. It is absolutely possible to get by without a car, especially in Europe.

    I'm curious about your argument that driving is cheaper than taking public transport. When driving a private vehicle, you are paying a huge premium for the convenience of driving where you want, when you want.

    If driving were cheaper, why do poor people take the bus?


    1. Hi Victor, thanks for your interesting comment!

      Firstly, the post is more geared towards people being able to afford a better car rather than budget motoring. I'll cover that in the future, however, in answer to your question, most factors all seem to favour the car, as follows:

      In my own personal case, I have osteoarthritis in one of my hips and I live 8.8 miles from my office in the Peak District. Biking is out of the question as the route takes in a peak altitude of 1132ft and my work place is almost at sea level. The big hills are the main reason the GB cycling team use the area for their training.

      OK the car costs. Servicing: 4 x decent, branded tyres/brakepads and shoes/3 x oil changes and filters etc. £470. Insurance £800 (I've had a few accidents recently), tax £220, annual mileage 20,000 @50mpg is £2,500 in diesel at today's prices. Total cost per mile is £0.20/mile. This is a conservative figure as we normally see at least 53mpg, usually a bit more and my insurance rates will improve hopefully. I haven't included depreciation as it's negligible on a 10 yr old car and I'd still need it anyway for carting about my 2 yr old and all his associated paraphenalia.

      The bus costs £3.90 return, which works out at £0.22/mile. On other routes, like going to my local swimming baths, it's quite a bit more expensive, and the train costs £10 because there isn't a direct route there. Of course this all applies to just me. If my wife were travelling with me, then the cost doubles of course, where it doesn't in the car.

      I take your point about getting about in Europe. Public transport is often partly funded by tax payers, although it does depend on how remote your home is, and mine is definitely out of the way, although you can see I'm not paying anything like a huge premium for convenience.

      I also purposely took my job where it is for convenience too. The nearest big city centre is 10 miles away, but due to traffic it takes well over an hour to get to/from at rush hour. My work still only takes 20 mins if I get stuck behind a horsebox or tractor, which does happen from time to time!

      Addressing your last point, poor people often pay more for such things because they don't have the ready cash or facilities that others do. Paying out £3.90 a day maybe more expensive in the long run, but catching the bus doesn't generate sudden large bills like when the car needs taxing, or a new set of tyres for example.

      I suppose the main point is that the average peson drives a much newer car so purchase price and depreciation would often count more heavily, plus many people expect a car to be all things to them, such as being sporty or posh or both as well, but this makes little sense to me.
      For everyday use I often purchase older cars because they are actually very good value. A car that has done 100,000 miles might well be only half way through it's useful life if cared for, and if it's the kind of car aimed at fleet managers, like your average saloon, it'll be cheap to service and run too. That's my workhorse, but for my treat, I do have an old classic with a V8 nestling under the bonnet. It's very, quick, looks good, and makes me feel good, but because of it's age it is tax exempt, and the insurance is ridiculously cheap. It barely does any mileage, but as it gets older, it actually appreciates too.


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