Car dealers get rich when people are dazzled by their gleaming showrooms and commission hungry sales staff so, before leaving home, give some thought to what you will use your new wheels for.

It sounds obvious, but many customers buy something without thinking ahead or doing even the most basic of research. Changing the wrong car after a few months is usually a very expensive waste of money, so it pays to be street smart.

The main things you should consider:

Purpose

• Will you be doing mainly long or short distances?
• How many people will you usually carry?
• How much luggage?

Size

Larger cars are often safer than small ones, but also more expensive.

Running Costs

Apart from the initial price, the ongoing running costs are an important consideration. Different engine sizes in the same model can have a big impact on fuel consumption and insurance premiums.

Ask about the costs of basic things which you will have to renew such as tyres and exhausts, as well as the costs of regular servicing - you will find significant differences between makes.

All these things will effect how much you are likely to spend each month, but the biggest cost will not be payable until you sell your car - depreciation.

Depreciation

This is the amount that your car will lose value over the period you own it. All cars suffer from it, but some more than others.

Although a hidden cost, you will thank yourself when you come to get your next car if you ensure the car you buy now will hold on to as much of its value as possible since it will provide you with a much bigger part-exchange or second-hand value than you would get for a car of the same price now which suffered from greater depreciation.

Autocar magazine has a list of prices for all new cars which also shows the percentage value retained after 3 years (or 30,000 miles). A Fiat Marea is estimated to retain only 20% whilst an Audi A2 should keep 54%. As both cars cost about £13,000 when new, the Audi's £4,400 extra trade-in value speaks for itself.

New or Second-Hand?

This is the reason why many canny private buyers choose not to buy a brand new car. They save themselves thousands of pounds by buying one two or three years old which, if it has a full service history and reasonable mileage, (about 10,000 p.a.) will meet their needs just as well.

The other way of looking at this is that you can get a much better quality used car for the same cost as a basic new one.

Petrol or Diesel?

As a general rule, diesel cars keep their value better than petrol engined ones. They also provide better fuel economy.

Where to buy from?

This is your next problem. Do you go to a big dealer or respond to a private advert in the local newspaper? Car supermarkets and auctions are other
possibilities.

All have benefits, but remember - buyer beware.

Unless you know a bit about cars, it is wise to involve a friend who does as each source also has potential downsides. You may pay more than necessary or you could spend your hard earned (or borrowed!) cash on something which develops lots of problems and costs a fortune to repair.

Dealership

Buying from a dealer means that the car should have been inspected and faults repaired. You will get a guarantee and some protection if the car has been stolen or is still subject to an outstanding Hire Purchase agreement. Main dealers will have a comprehensive back-up service and others will offer a range of makes for you to compare.You will pay more than for a private purchase but will get peace of mind to compensate.

Car Supermarket

Car supermarkets have developed greatly in the last few years and often give the opportunity for you to view several hundred cars at one location. Prices are usually well below what you would pay at a main dealer, but some offer only a short test drive and others none at all! Cars less than three years old should still have the manufacturers warranty whilst older models will probably have a less comprehensive guarantee than if bought from a main dealer. You may get a lower part-exchange allowance if trading in an existing car, but it is still possible to get some very good deals.

Auction

Auctions are an experience in themselves. You can do a very cheap deal quickly and often have a wide selection. However you cannot take a test drive and will have limited facilities to inspect, so keep away unless you go with an expert.

Private Seller

Buying from a friend or private sale can be less pressurised and gives the chance to meet the owner. By visiting their home you will get an impression of their attitudes- a tidy house may mean they have taken care of their car. You can discuss its history and inspect service records.

Negotiate the price, which should be a lot less than you would pay at a dealer because you are not getting any guarantee (although the remaining period of any manufacturers warranty will still protect you ).

Mechanical Inspections

Unless you are a mechanic it is well worth asking the AA or RAC to carry out an inspection. This will cost between £130 and £200 depending upon the engine size and degree of thoroughness required. You will get a written report and apart from peace of mind, any faults discovered can either be corrected before you buy or used to reduce the price.

Be aware that you cannot take a test drive without comprehensive insurance and that the seller may not even own the car- it could be stolen or subject to a Hire Purchase agreement!

Data Checks

You should therefore arrange a Data check with the AA, RAC or HPI - a fee of about £35 will give you confirmation that the car has not been reported stolen, written off after an accident, any secured finance outstanding, change of colour etc. and enables you to check that the registration number agrees with the recorded VIN (Vehicle Identification Number) that you will find on the car.

General Advice

Ask the seller to show you the original receipt when they bought it, together with the MOT Certificate if the car is over 3 years old, as well as the Registration Document.

There is a lot to digest here, but rest assured that it's quite possible to buy a reliable car without spending too much money. You can then experience that most addictive sensation of all - freedom!

Top tips from Graduate UK:

• Think about what you need
• Always seek advice
• Keep all financial and service records
• Ensure you have a test drive
  
  
• Check legitimacy of seller and car
• Always consider depreciation
• Research running costs
• Enjoy

FURTHER REFERENCE

Browse the Motoring section of our Web Directory for links to the sites of almost every manufacturer - as well as other useful websites.

Happy motoring!