There's nothing quite like the excitement of buying a new car, but it's important to know what you're looking for and be aware of the car-buying process. By having a clear plan of action you can avoid any pitfalls and drive off with your perfect car.

buying a new car what you need to know shaking on the deal

We've put together a list of some key pointers to help you along the way:

1. Draw up a buying shortlist - This is the fun bit. If you're not sure already, draw up a list of the type of car you want. Is fuel economy important? Or maybe it's road-handling and performance? Automatic or manual? Be clear what you want from the outset to help you make the right choice. Remain open-minded regarding make and model as this may change after you test drive a few.

2. Test drive, test drive, test drive. - From your list, test drive as many cars as possible. And this means more than a 10-minute spin around the block that the dealer may propose. Request to take the car away on your own to try it out in different scenarios (for people who are serious about buying a car some dealers offer 24 to 72-hour test drives). Drive it on different roads; in traffic; loaded up with people and luggage. This will give you a true insight into how the car performs.

3. Check running costs - Another good indicator of which is the right car for you are the running costs. The upkeep and maintenance can be costly and you don't want it to be a drain on your finances if you're not getting full value from it. Diesel cars offer better fuel economy than petrol, however they are more expensive to purchase, as is the fuel. Consider how much you use the car. If you drive thousands of miles each year, then diesel may be the way to go. If it's just for casual use, petrol is better.
Other factors to consider are road tax and insurance. Different cars fall into different categories and can greatly affect your outlay. Even the size of the tyres should be taken into account; replacing larger ones costs a lot more than smaller ones.
Finally, there's car depreciation to think about. Will your car be sellable in years to come and how much will its value drop? Buying a cheap new car could be costly if second-hand demand is poor.

4. Finance options - When it comes to paying for your car, there are many options to consider. Besides the preferred method of walking into a showroom with a briefcase full of cash, you're most likely to take up a finance option offered by the dealer. Here's what to expect:

  • Hire Purchase - You pay an initial deposit of at least 10% of the car's price then pay the remainder in monthly instalments (with interest - typically between 7% and 13% APR).
  • 0% finance - You pay a large deposit (approximately 35-40%) and the rest is paid in interest-free monthly instalments.
  • Leasing - A good option if you want a new car regularly without actually owning it. Monthly payments are normally between £100 and £400 a month (depending on how long you want the car for and annual mileage).
  • Personal contract plan - This is for people who want low repayments and like a new car every two to four years. You put down a deposit and pay monthly instalments, leaving a lump sum to pay off at the end of the contract.

5. Differences between seller types - Where you actually go to buy a new car is another consideration. Decide if personal interaction is more important than cost-saving or if part-exchanging your old car is part of your plan. Below are some of the most popular options, with the pros and cons of each.

  • Franchised Dealers - Pros: Face-to-face service and a wide choice of cars to look at and test drive; easy to part-exchange; best comeback if anything goes wrong. Cons: Expensive but discounts can be had with haggling; private sale of old car will earn you more than part-exchanging.
  • Car Brokers (internet-based) - Pros: Save thousands on main dealer prices; one-stop shop for different makes and models. Cons: No test drives available; limited personal contact; unlikely to offer a part-exchange service.
  • Car Supermarkets - Pros: Very competitive pricing; plenty of choice of makes and models; finance packages offered; drive away the same day. Cons: Limited to what cars are in stock; 'no-frills' customer service; new cars may be imports so check for full UK specification.
  • Import Agents (buying from abroad) - Pros: Able to source big discounts from other EU countries; no paperwork, negotiation or collection; will deliver to your door. Cons: Importing can be time-consuming with lengthy delivery times; price comparing is tricky due to currency fluctuations; large deposit may be required before confirming delivery date.

6. First six months of ownership - Now you have your new vehicle, there are a few important things to be aware of within the first few months of ownership.

  • Make sure all the paperwork you received after purchasing are kept somewhere safe. Sounds obvious, but it's easy to forget where we put these things sometimes and typically can't find them when we need to. Critical if you experience any problems.
  • Keeping the vehicle clean both inside and out will help it fetch a good price when the time comes to sell it. This includes removing dust and dirt from the engine as it can soon build up. Get into this habit as early as possible.
  • Try to avoid the temptation of driving too fast and braking too hard. Ease yourself into the first few miles to help maintain performance in the long term.
  • It is recommended to change the oil soon after purchasing a new car. After just 20 miles it can contain particles of metal worn off rubbing surfaces inside the new engine.
  • Should anything go wrong with your new car within the first 30 days of ownership, you are entitled by law to reject it out of hand and receive a full refund (Consumer Rights Act 2015). This act also entitles you to a full or partial refund if, after 30 days but within six months of purchase, the car has a fault which is not repaired at the first attempt.
  • Consider taking out GAP insurance. The value of your new car will depreciate significantly once it leaves the showroom and should it be written off or stolen, GAP insurance will cover the difference between what your insurer will pay and what the car initially cost.