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Tax On A New Car

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Buying a new car can be a daunting experience if you don't prepare yourself beforehand. There are just five easy steps you can take to help you enjoy immense savings when you are new car shopping whether online or at the dealer. Taking the time to do a little bit of research before you sign on the dotted line can be well worth it in the end.

The First Step-Determine a Fair Price

The first thing to do is to decide what a fair and realistic price you are prepared to pay for the new car you want. When you do your research online, you can find websites that have a down loadable spreadsheet that is absolutely free, to aid you in figuring this out. Before you can determine a fair price, you will need to know the invoice price for the car. You can find this information out on one of two sites. The first is FightingChance, and they will sell you a package for about $35 that has such information as inventories of current dealers, as well as the pricing information. The other is Edmunds, and they have invoice pricing information that is for free. Their information doesn't seem to be as accurate as the data you receive from FightingChance.

The Second Step-Use The Competition For Your Advantage

After you have determined the fair price for the new car you want, the next step is to fill out all the free quotes from the websites you have visited when you were searching for a new vehicle. Cars.com, Yahoo!Autos, Autoweb, and others like websites are all great places to look for a bargain. It takes just a few minutes to fill out the information required, and the more dealers you contact, the more likely you are to be offered a price that is almost rock-bottom. Be sure you give the correct contact information so that dealers may contact you. Tell the dealer you are working with others, and you are not interested in financing options at this time, just the price of the car that includes all the dealer fees as well.

The Third Step- Shop Around For The Best Financing

When you comparison shop for financing for a new car loan, you can look for the best deals at the best interest rates that are available to you. You do not have to get your financing from the dealership where you intend to buy your car. You will need to check your credit score so you will know what types of rates you can expect to be offered for financing. You can obtain a credit report from one of the three main credit reporting agencies; TrueCredit, Equifax, or Experian. Once you know your score, you can send in your application to lenders online like HSBC Auto Finance or Capitol One Auto Finance. These companies can give you some of the best rates available online.

Fourth Step-Trade In Value of Your Old Car

For those who want to trade in their old car, you can use the Kelly Blue Book to get an estimate of the price you can expect to get for your car. You will use this information on your spreadsheet to help you determine the actual price you will be paying for your new car.

Fifth Step-Negotiate The Price

Now you are armed with plenty of information, and plenty of offers from dealers. The best way to get a picture that is accurate, is to ask for the out-the-door price in cash for the car. Have them exclude rebates, trade-ins and any incentives offered. When you are dealing with a few dealers, they are anxious to make a sale and can offer you huge savings you never expected to receive on a new car purchase.

Tax On A New Car

When cars are stolen and not recovered or written off, motor insurance policies usually pay out only the approximate value of the car, rather than its list price at that point in time. This applies even if the incident occurs fairly soon after you buy a new car. The reason for this is depreciation; new cars depreciate extremely quickly, sometimes losing anything up to 50 per cent of their value during the first two years they are owned.

If you've just bought a new car, it is likely that the dealer will want to sell you gap insurance to cover the difference between what it cost and what your insurer company would pay out if the car was stolen or written off.

Gap (Guaranteed asset protection) insurance covers the shortfall between what your motor insurance company will pay out and the amount you actually paid for the car. This should give you enough money to buy another car of the same value, or at least pay off a finance company if any money is still owed on the car. If you purchased the car with cash, of course, this wouldn't be an issue.

If you look on the internet you will see that it is probably cheaper to get Gap insurance from an independent company rather than from a dealer. To cover a shortfall of £7,500 it would cost approximately £165 spread over three years.

The question of whether Gap insurance is worthwhile is a difficult one. You could argue that the only way to find out is by knowing the risk. What percentage of cars are, in truth, stolen and not recovered or indeed written off entirely within the first three years of purchase?

Statistics regarding this information are hard to come by and even details which are available can be conflicting. The online insurer, Excite claims that half of all stolen cars are not recovered. Car-Finance.net, on the other hand, says the figure is one third. If you rely on the government's car theft index (albeit for 2004), it is older vehicles – cars aged 11-15 years that are in the highest risk category of being stolen. Apparently, more than 50 per cent of all cars stolen in the UK fall into this category.

Truly concrete figures really don't exist. According to Vcheck, which obtains its information from the police, ABI and the DVLA, more than 3,000 cars were written off and almost 300 stolen. And that was just in one day!

From the statistics available it seems that new cars are clearly at a lower risk of theft than older ones, yet if you don't take out Gap insurance you will have no protection against your car being written off or indeed not being recovered in the, albeit not very likely, event that it is stolen. With car insurance already at a high level, many consumers would probably try and resist paying out a further £55 to cover the potential shortfall risk. Like with all insurance, it comes down to the question: What price peace of mind?

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Michael Challiner has sinced written about articles on various topics from Finances, Advertising Guide and Quit Smoking. The Car-insurance-facts.co.uk offers great deals on and help on other financial products. Visit our site for more info. Our sister site Brokers On. Michael Challiner's top article generates over 165000 views. to your Favourites.

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