Guide to Buying Used Cars for Your Company

A great way to save money when looking for company vehicles, is to purchase a used car. Used cars are much cheaper than buying brand new cars, as they have already had a lot of the depreciation value take place.

However, when you search online or visit local dealerships you need to know how to separate the genuine used car deals from the too good to be true deals. Within this guide we will outline some of the more important checks to complete before signing any agreement which will ensure you balance your needs, affordability and tax efficiency.

What Type of car do I need?

Whether you are looking for your first used company car, or looking add another to your growing company fleet, one of our biggest tips is to ensure you know what type of vehicle you need.

This may seem obvious, but in most cases, people have a preconception of what a company vehicle should be, and do not look at your own personal requirements. Therefore, before you start looking for a used car for your company make yourself a list of essential requirements.

A good starting point is thinking about the size of vehicle, do you need a car, sprinter van, or transit van? As well as the size, think about the cost involved, what can the company afford to pay for the vehicle, and how much will it cost to run and tax?

They are also other points to consider based on your company activities, that may mean ‘optional extras’ quickly become essential requirements. Is the vehicle required to do a lot of long-distance driving, do you cruise control? Or do you visit a lot of places and it needs a built in sat nav?  Also, think about new driving regulations. Will the driver need to speak to customers or the office whilst he is driving, in this case does it need an inbuilt hands-free system?

All these types of questions will help you create an essential list of requirements to ensure you get the right used car for your company.

Emissions needs to be discussed

Based on the vehicles CO2 emissions, the higher the emissions the more tax you and your employer will pay. Therefore, if you can look for greener cars which meet your requirements you could benefit from tax savings. They are currently 35 bands ranging from 0g/km to over 180g/km CO2 emissions. As a good rule of thumb, for the best value keep under the 130g/km value.

With this in mind, also don’t ignore diesels vehicles without checking against your requirements. As we are aware, the UK government is no longer promoting diesel cars, and alongside this they have increase the tax from 3% to 4% recently.  However, depending upon the number of long-distance miles the vehicle will cover, the fuel savings may outweigh the additional tax.

On the opposite end of the scale are electric cars. These currently sit in a 16% tax bracket. However, in 2020 this is dropping dramatically to just 2%. This incentive is designed to help convince more people and companies to turn to battery power.

Before Viewing a Used Car

You are often paying a premium price for a used vehicle when you buy from a car dealership. This is because as well as paying for the car, you are also paying for the dealerships rent, marketing activities, staff and much more.

All these aspects reduce the risk when buying a car, but these costs are included in the price for the car. This means you can pay significantly more for a car compared to a similar car from a private seller. If you know what you are looking for, and can check the history of the car before purchase, you can save money and buy private.

Therefore, if you are buying a used car from a private seller, gather as much information as you can about the car from the seller. We usually call this period of time, the ‘seller test’. Ensure the seller knows about the age of the car, current mileage, mot and tax dates along with the Vin numbers. If they are unsure on any of this information it could be a sign that they don’t own the vehicle.

Complete A Car History Check

This is more important if you are buying from a private seller, but it can be worth also completing if you buy from a dealership. Thousands of cars are sold each week which have a hidden history such as outstanding finance, mileage discrepancies and insurance write-offs. We are not saying that sellers should not be trusted, but they may hold some important information from you in order to get the vehicle sold quickly.

Luckily, you can find out the hidden history of any car within a few clicks. By completing a car reg check online, you can complete hundreds of history checks within a few seconds to ensure you are getting the car that is being sold to you.

Arrange viewings at the seller’s home or at the dealership

Firstly, I would always advise if you are looking to purchase a car from a private seller or dealership never go on your own. Always take a friend or relative with you. This is not only for safety reasons, but they may also see or hear issues with the car that you don’t spot.

If buying from a private seller, make sure you view the car at their home and not in a car park. If they do not want you to view the car at their home, this could be a sign that they do not want you to know where they live, so you are unable to return if you do experience any issues.

That said, always arrange a viewing on a good weather day. Never go view a car in the dark or when its raining. Rain is one of the worse things for buyers, but great for sellers, as it can easily hide small dents and scratches on the car.

Before Test Driving

Before taking the car on a test drive, make sure you check inside and outside the vehicle. Check the doors open with the button, and manually. Also check that both locks on each side of the vehicle match, as this could be a sign of a brake in and repair. Along with the doors, check all the windows open and close fully, as well as the sunroof (if applicable).

However, before setting off, take a look inside the car. Ensure you check the seats, everything is in place in the centre console, look under any car mats for damage as well as ensuring they any no missing parts.

The Test Drive

Before getting into the drivers’ seats and driving away on your test drive, please make sure you are insured to do so. Most fully comprehensive insurance policies do allow this, if over 25, however, if you are unsure please check with your insurance provider first.

30 minutes is an ideal test drive. Please do not just drive around the block and back to the house to make sure it runs; this is your time to ensure you try different routes and different speeds. We advise this, as you may feel or hear different noises coming from the car on different roads or at different speeds. With this in mind, please do not have the radio on whilst on this test drive, as this may hide these noises.

Also don’t forget to test the brakes. Perform an emergency stop, when it’s safe to do so, as well as testing the handbrake on a steep hill.

The Negotiation

Whether you are buying for personal or company use, it will always come down to price, and if the car is worth the amount the seller is asking for. However, if you have taken notes during this guide you will highlight some areas you can use to begin negotiating with the seller. 

For example, great starting points would be if you have noticed a few small dints on the car, or that it has high mileage for its age. In addition to this, if you are buying from a dealership, specific times can help. As they tend to work towards quarterly targets, you may get a better deal in March, June, September or December. Also try to avoid busy times such as weekends dates around payday.