False economy in this economy - Latest Car Dealer Magazine Piece

For the last year, more than half of my enquiries have been from people looking to swap their existing car for one of mine or have been looking for cash back.

There is no doubt that rises in insurance premiums and regular increases in road tax have forced many to look hard at the cars they own and seek a change. A recent RAC report claimed that over a third of all motorists had reduced the use of their car due to the price of petrol.

Whilst it is a natural step to want to change your car to reduce some of these costs, for many people the logic of this process is flawed. I am constantly hearing of deals where a low mileage user chops in a perfectly serviceable petrol car for a new diesel to save themselves £100 a year on tax and gain 15mpg. However, the actual outlay of five figures plus interest if financed seems to escape their attention.

Most of the swap deals I am offered are against my 'part exchange to clear' cars. Some customers think it is in their best interest to swap a 50k petrol family hatchback for a 120k small diesel car with no regard whatsoever to the actual cost of annual maintenance.

Maintenance too is an area where people try to cut corners. How many people have stopped the routine service of their vehicle? How many cambelts are being replaced in this climate and if so with how many water pumps? The ostrich approach is common yet consequences are financially catastrophic when something goes wrong. Many of these cars are seen limping their way into dealers with the idea of passing the problem.

So far the reduction in vehicle parc has managed to delay the reduction in residuals of less efficient cars but there are signs things are starting to change as evidenced by last months book drop. At what point the cost difference starts to encourage buyers back these cars in big numbers remains to be seen but there are some great buys out there for the canny individual...