Whether your current car is ready for the scrapheap, you need a vehicle for work, or you fancy a new motor, Which? has come up with five top tips to help you save money on buying a car.

Sam Richardson, deputy editor of Which? Money, said: “The price of new cars has gone up significantly since the pandemic and issues with affordability have been thrown into even sharper relief by the cost-of-living crisis.

“By following our tips on buying new and used cars and being prepared to haggle and ask for discounts, you can make substantial savings.”

1) Compare new and used prices

When buying a used car, you’ll have to compromise on your choice of specification compared with ordering a brand new model, but the savings can be worth it. But this needs to be balanced with the loss of some of the car’s warranty duration.

Don’t be afraid to haggle with a car dealer. Do your homework and research prices elsewhere, including from online brokers. These can offer competitive prices, but may not be local to you, so factor in pick-up or delivery.

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However, margins on new cars have been very small since the pandemic, and with long waiting lists – many vehicles will take more than 12 months to arrive on your driveway – dealers don’t often need to sell a car cheaply. The same goes for used cars – dealers will likely wait for the best price. Be reasonable with an offer.

2) Consider an ‘old’ new car or a ‘new’ old model

A pre-registered car – or ‘pre-reg’ – is a car that has never been owned by an individual, but was registered by a dealer or a leasing company. Dealers often register many vehicles when they’re approaching the end of a month or financial quarter to meet quotas imposed by the manufacturer.

Pre-registration was less popular in the peak of the pandemic due to stock shortages, but it is returning. One thing to consider in buying an ex-demo car is that it will likely have been driven by a lot of people.

But by buying a pre-reg car, you’ll become the second owner which may cost you down the line when you come to sell in the future.

When buying a new car, you might be tempted to opt for the newest model, but dealers will be keen to shift stocks of the older, but often near identical model. Older versions will be in stock only and won’t be open for custom orders.

Sometimes you can save big on a car with just minor cosmetic differences from the brand new version. Again, you might take a minor hit on the resale price in future, but the initial saving can be significant.

However, be careful if you’re buying a pre-registered model via a broker. Some unscrupulous agents target volume bonuses from carmakers, which means you won’t be put down as the registered keeper, potentially leaving you in difficulty with insurance companies – and even the police – should something go awry.

Check who will be on the V5 form before committing, and walk away if it’s not in your name.

3) Consider downsizing

Do you really need an SUV? Could a hatchback or estate model be big enough? When choosing a next car, many drivers opt for something similar to the old one, but you could be spending too much on something you don’t need. By choosing a vehicle that’s a little smaller and missing a 4×4 badge, you can save on running costs. For starters, fuel bills tend to be lower and smaller tyres cost less to replace – plus, SUVs often attract a price premium over a similarly sized estate car.

Smaller cars often come with luxuries too, such as climate control, parking cameras and smartphone connectivity.

See Which?’s new and used car reviews to find the best options to suit your needs.

4) Ask about discounts

Being a cash buyer won’t necessarily get you a discount straight away. Express interest in buying through finance, which dealers prefer as they can earn commission from it, and ask what discounts are on offer. Then, if you can afford to, offer to pay in cash anyway. Finance might be a cheaper way to buy though.

But beware, car prices remain high and this coincides with a sharp rise in interest rates. Forecasts suggest that interest rates will go up before they come back down.

5) Electric cars

Sales of new petrol and diesel cars are set to end in the UK by 2030 and many people have already bought, or will  consider buying, electric vehicles.

Electric cars can cost hundreds of pounds less to charge per year compared to filling the same size car with petrol or diesel – at least for those who can charge at home.

How much it costs to charge an electric car depends on where you charge it. To put it plainly: if you have off-street parking and a home charger, you’ll have access to the cheapest rates and you’re likely to save a considerable amount of money compared to paying for petrol or diesel – but the cost at public charge points will vary considerably and may not always work out cheaper.

Owners of a mid or large SUV can save just over 5p per mile on fuel costs if they charge at home on a standard tariff compared to somebody running a diesel version of the same car. That saves £427 over a year (based on 8,100 miles – the average mileage from Which?’s latest car survey). This figure increases to over £1,000 per year (or 12.5p per mile) if you have an off-peak rate and can charge during off-peak hours. Be aware that charging costs increase outside of the off-peak rate.

But the high upfront costs of EVs are still a barrier to people buying electric cars. You could consider buying second hand to save on the initial outlay costs. According to The AA, it is now possible to buy a second-hand electric car with less than 10,000 miles on the clock for around half the cost of a brand new car.