There’s a magic number in car-buying. It’s a number that changes twice a year, follows you around for as long as you own a vehicle, and can mean the difference between paying full-price and making a satisfying saving.
You’ll find this number on the license plate. And if you know how to take advantage of it at certain times in the year, you could be driving home with a great deal.
What do license plates actually mean?
The letters and numbers that make up a license plate aren’t just random combos. And beyond entertaining the kids with acronym games on long car journeys (EY02 BWE = Every Yellow Belly Wants Eggs) they do actually have a purpose.
The first two letters tell you where the car was first registered. LA to LY means London. MA to MY means Manchester, and so on.
The two numbers that follow tell you how old the car is. If the car was first registered between the start of March and the end of August, the numbers would reflect that year. So April 2018 would be ‘18’. If the car was registered between the start of September and the end of February, the numbers would be that year + 50. So November 2018 would be ‘68’.
How can knowing this help you save money?
Knowing when license plates change can be beneficial for two reasons:
- You can be the first person to get a new car with a new plate, and revel in the prestige.
- Or you can get a new car with the previous plate, and chop off a chunk of the price-tag.
If you simply must have a license plate that’s newer than your neighbour’s, go for it. These tips will help you negotiate a great deal.
If you’d prefer to walk away with a car that’s just as good but costs a fair bit less, read on…
March and September: the money-saving months
If you wait until the cusp of March or September, when new license plates are released, you can often save between 5% and 15% by getting the previous plate instead of the new one. Here’s why:
- Just before each release, dealerships need to work harder to meet their targets as some buyers are waiting for the new plates.
- Just after each release, dealerships want to clear out the older plates to make way for the newer, more profitable ones.
The trick is to make it seem like you would appreciate the prestige of a brand new plate but are willing to take the previous plate for a big ol’ discount. Even if you don’t care at all about the newer number, make it seem like you’re giving something up and want something in return.
Sound too easy? You’d be surprised how effective this tactic can be. And if you combine it with other money-saving hacks, like playing off dealer rivalries and showing off your knowledge, you’ll feel extra smug as you sign on the dotted line.
Save even more with a car finance plan
Of the 2.5 million people in the UK who buy a new car each year, 80% use some sort of finance option instead of paying upfront. And as long as you’re buying a new car as opposed to a used one, the rates and benefits can be highly competitive – especially when license plates are changing.
Cash isn’t always best
Although paying everything upfront in cash is great if you can afford it, because you don’t have any interest to pay and you own your car outright, that doesn’t necessarily mean you’re better off.
Just as staff are willing to haggle on the car itself, they’ll often sweeten the pot on a finance plan to seal the deal. This could mean you get your MOT, breakdown cover and other benefits thrown in for free, which might leave you better off in the long run. Remember, always do the maths and weigh up what is most important to you to work out the best option.
Choosing the right car finance plan
The deal you strike up with the dealership should depend on what you can comfortably afford month to month and whether you want to keep the car when the agreement is over.
You can find out about all the nitty-gritty of finance agreements in our guide to choosing the right finance product, but the main points of difference are shown below.
Personal contract purchase
Personal contract hire
if you want to rent long-term
· Higher monthly payments than other finance options because you end up owning the car.
· With no mileage limits, it’s ideal if you’re not sure how much you’ll use the vehicle and want to own it in full at the end.
· Lower monthly payments but a large one-off ‘balloon fee’ at the end if you choose to keep the car.
· If you choose to return or exchange the car, you only pay the difference between the car’s value when new and predicted value at end of the agreement.
· Mileage limits will apply so you’ll pay extra fees if you exceed them, but it’s otherwise the most flexible option.
· Comparatively low monthly payments as you’re only leasing the car and have to give it back at the end.
· Mileage limits will apply, but other costs such as maintenance and servicing are often (but not always) included. A convenient option for low-mileage drivers.
Whichever you choose, remember to sweat the sales rep to sweeten the pot. Around plate change time you can afford to throw your weight around!
For more guidance around the best ways to negotiate, read these tips for getting a great deal on a new car.