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Buying and owning a car in 2020

Thinking of buying a new vehicle or worried about owning a car during the COVID-19 crisis? Here’s everything you need to know to cut your costs during the pandemic.

model car and keys

As things change rapidly during the coronavirus (COVID-19) crisis, this guide will be updated regularly to reflect changes in rules and regulations.

A car is an essential purchase for many people. Choosing the right vehicle for you and your wallet takes some planning. This guide will walk you through some of the key things you’ll need to consider when making your choice.

For those who already own a car, we’ve also got some need-to-knows for keeping your costs down during the coronavirus (COVID-19) lockdown.

Should you hold off buying a car this year?

During this time of uncertainty you may not be going ahead with any big purchases right now. But the lockdown might actually be a good time to do some research on your next car safely from home.

Can you still buy a car during lockdown?

The government’s social distancing rules make are slowly being eased, and from 1 June 2020 it will be possible to physically visit car dealerships. There is also nothing stopping you from shopping around online for your next purchase, whenever that may be.

New car sales have plunged by 97% in April compared to the same month in 2019, according to car industry figures. Last month around 4,000 cars were registered that month, compared to 161,064 new cars registered in April last year.

Some car sellers may be willing to accept a lower price in order to shift their stock. As demand is very low at the moment, there is certainly no harm in contacting them by phone or online with questions.

But with many dealerships going through a tough time at the moment, there are no guarantees that you’ll be able to buy a car and pick it up straight away, or get it delivered.

A glimmer of good news for car financing?

Whether you’re actively looking to buy a car now or you’re happy to wait until just after lockdown ends, there might be some good news for you.

That’s because if you’re planning on buying your car using a financing agreement, the amount you’re likely to pay is affected by interest rates. The Bank of England base rate, which influences everything from credit card interest to mortgage rates, is the lowest it’s ever been. 

Read more about the Bank of England base rate.

We obviously cannot predict the future. But it’s likely that these low rates will continue for a while. So, you might be able to find cheaper deals on cars than if you had looked at the start of the year.

When is the best time to buy?

Choosing the best time of year to buy a car can sometimes save you thousands.  

COVID-19 has clearly had a vast impact on activities like buying and selling cars, but it’s still worth thinking about some simple ways to help you get a better deal on your vehicle.

Many car dealers have sales targets each calendar quarter. So if you’re looking for a car at these times, especially the end of June and December, you might find that they can offer you a good deal.

February and August can also be a good time to bag a bargain, as sales are usually slower during these months. This tends to be because buyers wait for the new number plates to be released.

But be aware, older number plates can make your car look older than it really is. This means that its resale value will go down faster than for cars with ‘newer’ plates.

Owning a car during the coronavirus lockdown

If you’re stuck in the house staring at an expensive car on the driveway, there are some things you can do to reduce your costs: 

Declaring your car off the road

If you own a car that you know you definitely will not drive while lockdown is in place, it’s worth thinking about declaring it off the road. Doing this allows you to get money back on your car tax.

Declare your car off the road by making a Statutory Off Road Notification (SORN). You can do this:

Read more about how a SORN declaration works.

Once you make the declaration you’ll get an automatic refund. You will receive your refund by cheque in four to six weeks of taking your car off the road. The cheque will be sent to the name and address on the car's log book (V5C).

If you get a SORN, you cannot drive your car again until you have taxed and insured your car. Once you do this, the SORN is cancelled automatically. 

What happens if your vehicle is due an MOT during the lockdown?

In late March the UK government introduced rules to help motorists who need to get a new MOT, but are not allowed to leave their homes to do this.

If your car’s MOT certificate was set to expire on or after 30 March 2020, then it will be extended by 6 months. This happens automatically, so you do not need to do anything. 

The extension also applies to those with motorcycles and vans. You will not get a new paper MOT certificate with a new expiry date on it.

Read the government’s guide on 6-month MOT extensions for full details. 

Drivers in Northern Ireland also get an MOT extension, but the rules there are slightly different. The main difference is if your car is over five years old, then your extension only lasts for four months.

Do you have to keep paying car insurance?

If you’re not using your car at all right now, you may be able to save money on insurance by declaring it off the road as mentioned previously. 

Doing this means you can cancel your insurance. But make sure you understand the risks of doing this, as your car won’t be covered if it’s damaged or gets stolen.

Still need to use your car? It’s worth contacting your car insurance provider as soon as possible. 

Some insurers are offering their customers payment holidays, while others are even giving partial refunds

Right now the government is not forcing insurers to refund customers for payments covering the lockdown period. But the situation is changing rapidly, so keep checking back for regular updates.

Struggling with car finance and lease payments?

If you bought your car with financing and you’re facing difficulty making payments during the pandemic, there are some things you can do. It’s worth contacting your financing provider or the dealership where you got the car. 

The Financial Conduct Authority (FCA) has told these firms to offer 3-month payment holidays to customers struggling because of a reduction in their income due to coronavirus. Payment holidays do not get rid of any of the debt, but they do freeze payments temporarily. 

The rules apply to:

  • Personal contract purchase (PCP) agreements

  • Conditional sale agreements

  • Personal contract hire agreements (a car lease agreement)

It’s really important that you get any payment holiday agreement with your finance provider in writing. This way if there are any disputes in the future about your car payments, you can prove that your provider agreed to reduced or delayed payments for a set period. 

The FCA has also told car finance firms that they cannot repossess cars or end loan agreements with customers experiencing financial difficulties related to coronavirus.