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Car-buying on a budget? 6 hidden costs to watch for - from pricey extras to new taxes

Motoring expert Dave Humphreys looks at the surprises in store for buyers who haven’t done their homework.

Image: Shutterstock/Grzegorz Czapski

IT’S EASY TO get caught up in the excitement of buying a car. However, there can sometimes be some hidden charges that you didn’t think of – or know about – that could not only take off the shine of your purchase but drive up the cost too. 

Here are some tips and tricks to keep in mind.

1. Be careful of extras that you don’t need

One of the best aspects of buying a new car is that these days almost every manufacturer offers a detailed online configurator option that enables buyers to spend hours playing around with different colour options to wheel designs and interior designs. Most will list all of the individual prices and adjust accordingly to give you an accurate idea of what the finished car will cost. 

When it comes to choosing a specific version, you do need to take the time to make sure you’re not paying over the odds for some equipment that you don’t need or want. Increasingly, car manufacturers tend to group different optional extras into packages. In most cases, these are presented as providing a saving or better value for money, but depending on what they are, you may end up paying for some items that you don’t want. It is worth investigating if choosing certain items individually could result in a better deal, even if it means having to wait a few weeks longer for the new car to arrive. 

Options like upgraded alloy wheels can add significantly to the cost of a new car Source: Shutterstock/Kuznechik

2. Factor in the delivery charges 

It’s quite common for a car brand to advertise its model with a list price or RRP, but in nearly all cases there are additional fees typically referred to as dealer-related charges. This charge generally covers the work that the dealer has to do to prepare the car before you collect it.

From the pre-delivery inspection (PDI) to cleaning, registration paperwork in the case of new vehicles, and even the number plates fall under this fee. The total cost can be as high as €800 in some cases. While these will be itemised on the invoice, it is worth enquiring about what the fees are ahead of time as they may differ from the online configurator you’ve used. 

3. Check out the insurance costs 

Many buyers don’t think about the impact of buying a new or newer car may have on their insurance premiums. If you’re changing like-for-like, and only moving up a few years there may be little or no change. The length of time remaining on your existing policy will also determine any potential costs, so it’s always of benefit to ask if your premium is likely to jump when it comes around in a few months.

But even if you aren’t insuring a very different vehicle to the one you already have, some insurance companies may charge an administration fee for swapping the details over. 

Dealer costs, such as cleaning, may come on top of a car's list price Source: Shutterstock/bogdanhoda

4. Importing privately? Make sure you’ve done your homework

There is plenty of coverage in the media about people choosing to import cars privately from the UK or elsewhere in a bid to save money. While in some cases this can be true, it isn’t always the case and not knowing the exact figures and costs involved can end up leaving you out of pocket.

There are several things to consider when doing this – not least factoring in all of the travel costs and even accommodation when you go to get the car. 

All cars are subject to Vehicle Registration Tax (VRT) when they arrive in Ireland and understanding what this figure is can sometimes be something of a lottery. There is an online VRT calculator that will give you a guide, but this needs to be taken with a generous pinch of salt as the figure can vary on the exact car and its specifications.

Importing a car can look like a great deal - but make sure you know all the costs involved Source: Shutterstock/Istvan Csak

Other factors such as the age of the car and the mileage all factor in to the total amount you will have to pay, and even if it exceeds the amount you deem appropriate it must first be paid and then appealed afterwards. If a car is less than six months old or has under 6,000 kilometres, it may be charged VAT.

As of January 1st this year all imported cars are subject to a VRT Environmental Health Surcharge or NOx tax that for some older cars can add a significant cost to the car on top of the regular VRT bill. For example, a 2015 Ford Focus 1.6 RDCI would incur a NOx tax of €2,735 based on its emissions. 

5. Don’t lose your paperwork

If you’re trading in your car as part of the deal, you must have the valid registration documents for your vehicle. The garage or trader is unlikely to accept your vehicle without it, which can not only delay the process but will cost you an additional fee of €12 for a replacement to be issued. 

6. And finally… remember motor tax and the NCT

Once your new car is registered, it will need to have its motor tax paid. That means that if your new car is registered towards the end of that month, you will still be paying for that whole month – so you may wish to make sure that the car is registered at the start of the month to get the maximum value from it. 

If you’re buying a used car, before completing the deal, you should check as to whether the car is currently taxed, and if so, for how much longer. Collecting it only to find that it is due for motor tax renewal the following month isn’t ideal if you haven’t budgeted for it.

If the tax has expired on it, you will only have to pay the road tax going forward. The same approach applies to the annual NCT. Many garages will usually guarantee a certain length of NCT, but it is something that you should find out before putting pen to paper. 

Gearing up for a new car? Check out for one of the lowest rates on the market for car loans over €10,000, with a KBC current account. We have a car loan for You. 

Lending criteria, underwriting, terms and conditions apply. Correct as at 12.2.20, see Market refers to banking market only. Loan Discount offer is available for new Personal Loan applications only and is subject to availability. To avail of the optional discounted rate, you must repay the loan from your KBC current account by direct debit. The discounted rate is a discount on the standard personal loan rate which equates to a 1% discount on the Annual Percentage Rate (“APR”), which may vary. KBC Bank Ireland plc is regulated by the Central Bank of Ireland.

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