A stress-free, cost-effective way to buy a new car

Last summer, I started to become mildly obsessed with the amount people appear to spend on new cars. I got into the (odd, I accept) habit of totting up the total insurance bill should a fire rip through one of the fields-turned-car parks by the popular beaches on the north coast of Cornwall.

Think 70 to 100 cars, mostly brand new SUVs, also mostly Land Rovers, Audis, VWs and Volvos. Come the fire, I reckon no insurer would realistically have got much change from £4m. It seems cars are getting swankier. Why them, not me?

So this year, in keeping with my New Year's resolution to prioritise the present as much as the future (I can be guilty of over-saving), I decided to trade in our battered old Passat for a new school-run car. So, one fine Saturday morning, my husband, assorted kids and a cheque book headed for Edinburgh's Seafield Road where all the car shops are. And this is where I found out just how stupidly difficult it is to buy a car.

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If I want a new washing machine, I go to John Lewis. They have a wide selection of washing machines different brands, different colours, different capacities, different prices. I talk to the salesperson a bit. We establish the parameters of my purchase and we choose one that more or less suits. I pay. Three days later someone drops the thing at the house. Easy. But new cars? Different kettle of fish.

You have to go to a different shop for each brand. At every shop, the salesman tries to make you sit down, asks trying questions about your need for finance and insists on taking your phone number before he will even begin to tell you anything about the cars themselves. Worse, after about 20 minutes of faff and sucking up to the kids (balloons, balloons, balloons) it turns out there is no standard car and no standard price. You can have a new car; you can have pre-reg car (a new car that the dealer has bought from the manufacturer himself to meet various targets and is selling cheap as it has now technically already had one owner); or you can have an "approved" used car.

You can buy it with cash. You can borrow the money to buy it via the dealer. Or you can do what I strongly suspect most of the people in that Cornish car park had done; lease it via a personal contract purchase (PCP).

The latter sounds nice. You put down a deposit (about 10% of the value of the car). You then make a payment for 24 or 36 months which is designed to cover the depreciation in the car over the period (and the finance costs APRs average 5-6%). Then at the end of the term you can either make a "balloon payment" for the remaining value of the car and make it yours or you can turn it in, come up with a new deposit and get another brand new car.

This system only works if you stick to the rules (remember you are a leaseholder, not a freeholder of the car just like a property, you never really own something that is leased). And you need to set a mileage with the dealer in advance. The higher the mileage allowance, the higher the monthly fee.

Go over your limit, and the charges clock up. Last week, I came across someone who does all their long drives in a rental car on the basis that it is cheaper than clocking up extra mileage on their PCP car. This seems to me to be missing pretty much every point of owning a car.

You also need to take better care of a PCP car than I could ever be bothered to do. A little wear and tear is OK. Anything else, you will have to pay to make good. So, while PCPs are probably the main reason why new car sales hit a 12-year high in January, a lot of people are going to find that their deal wasn't quite as good as it looked (do 2,000 extra miles at 7p a mile for three years and you'll add an extra £420 for starters).

The good news is that being forced by salespeople to look at this "innovative" loan system (the car industry loves the way PCP rolls cars out of the showroom so much that some websites no longer even bother to list the cash prices for cars) reminded me that while small cars look cheap these days, they still depreciate ludicrously fast. So I decided that rather than buying a new one, I would be much better off buying a two-year-old one with a couple of scratches that a greater fool had just handed back post-PCP.

A new Skoda Yeti will cost you £17,000. A three-year-old one in good nick will cost you £7,000. What kind of a nitwit would pay the extra £10,000 for little more than the lingering smell of new plastic? You could get the same effect by sticking a plastic bag over your head and ripping up £50 notes.

Anyway, by lunchtime we didn't want a car any more. We patted the Passat fondly and drove home. I then did what I usually do these days when I am irritated; I complained vigorously on Twitter. Twitter responded; get the Skoda; get the Twingo; get the Fiat Panda; get the VW Up, get the Hyundai and of course, "why don't you just walk your kids to school?". Thanks everyone.

Then, a revelation. An agent. A friend pointed out that I use an agent for everything else I can't buy in John Lewis on the basis that, in matters on which I am not an expert, I want to be represented by someone who is. So if that's the case for houses (we used a buying agent to get ours) travel, and legal matters, why not for cars?

So I called Ashley at car search agent Palmdale (Twitter suggested several others, but Palmdale got there first). I told him what I wanted (a Mini, second hand, new model, low mileage, ambient lighting on the dashboard) and my budget. He didn't laugh. He searched the UK. He found the car. He negotiated the price. He had the car checked over. Then he had reversing sensors fitted to it and delivered it to my door. His fee was £595 plus VAT. That wasn't it, of course (the sensors and the delivery were extra). But I now have sitting outside my house a two-year-old Mini, with all manner of extras.

It is just what I wanted. It is red much the same shade as the Mini I had when I was 19, just without six teenage passengers jammed in the back and a huge rust hole in the floor beneath the brake. It has done the worst of its depreciation. I know I got a good price even with the agent's costs. I know it's mechanically sound. I don't have to sell the Passat myself (Ashley did that too). And best of all, to get my Mini, I did not have to leave the house, talk to a car salesman, or help a seven-year-old rescue a balloon from an oily puddle in an overcrowded car park. And (unless John Lewis comes to its senses and starts a school run car department just below kids clothes) I never will again. How about that for progress?

This article was first published in the Financial Times.