Welcome to Merin Talks Your Money, the personal financial edition of Merin Talks Money. In these bonus podcasts, we get tips from experts across industries on how to make the most of your money.
I'm merrinsumset Web.
This week how to buy used cars successfully and how to keep your insurance low. I spoke with Ashlie Winston, chief car finder and creator of Palm Deal car Finders who specializes in US and new car and vansourcing, purchasing and valuations.
Ashley, thank you so much for joining us today.
Thank you, thank you for having me.
I've written a lot of columns over the years about buying houses and about how completely insane it is that people go out to buy the most expensive thing they will ever buy, the thing that, if they get it wrong, can destroy their financial life forever, and how they do that without any proper advice. And I'm always saying to people, you know, even if you're buying what you might think is an inexpensive house as opposed to a super rich person, and says, you still need to get someone on your
side advising you because it's a huge purchase. Cars seem to me to be exactly the same people will go out to buy a secondhand car which is going to cost them five pounds, ten thousand pounds, fifteen pounds, twenty thousand pounds up at the high end of the people you deal with one hundred and fifty thousand pounds plus, and they'll go out and do it without anybody on their side. They'll go out and get it from a salesman, which is exactly what you do when you're buying a
house from an estate agent. You're buying a huge thing with no one on your side. So what you do is you're on the side of the car buyer right one hundred percent.
And you've just described it perfectly. Because it's my biggest wind up about this industry, about the used car industry is an exception of property. There is such a massive difference between what the amount of money you spend at the top end and how you get treated down the bottom. Because the car salesman wants the profit in their pocket. That's all they want. They want their commission.
Yeah, but that's completely reasonable. I mean, this is how car salesmen make money. They sell cars and they take a commission on the car. So we're not blaming car salesman here this is the world is about incentives, right, The world is about incentives, and that is their incentive. And your job as a car buyer is to recognize that incentive and behave appropriately and if you can't manage that yourself, to ask someone.
To help you do it.
Right.
So, we recognize incentives in the market. We don't disapprove of incentives in the market unless they unless they result in immoral or illegal behavior. In the main we're pro and cents, Okay, pick up immoral for me?
Then?
Oh well, we could start with the whole current Flagher Conduct Authority issue, with all the mis selling of finance products that's gone on that Like I said, that's being moral.
Okay, interesting, let's do that.
I know if you said this yourself, when you walk into a car dealer, especially perhaps maybe one of the larger car dealers, and you sell I want to buy that lovely shiny car there, the next question the to ask you is do you want that on finance? And if you don't say yes they want that on finance, then they get very disinterested very quickly, which is completely
opposite of what the FCA is trying to achieve. They want everyone to be treated equally and fairly, which means that if you're a cash by you get the same treatment if you're a finance bible. That doesn't happen in the marketplace, and it gets worse because the problem that the financial amasment servers have at the moment is that up until January of twenty twenty one, there's something called
discretionary commission agreements which were allowed. And what this effectly meant is that the finance broker could set the interest rate where they wanted it to be, because the higher the interest rate, the more commission they earned. So you had situations whereby you might have a to pick the heartstrings.
A retired lady who had worked very hard and went to a car dealership and was told her APR was going to be fourteen point nine percent at a time when most normal people will be getting four or five percent and paying it because maybe she didn't know any better, and the broken would and a massive commission. So I'm sorry, I think that's a moral.
Okay, that is a moral, But also, as it turns out, it's not legal.
Either, correct. Yeah, And there's and there are going to be so many cases coming up. I mean, it's not the point where the FCA now say, you know, they usually say you have to respond to any any case against you within a set period of time. They've thrown that out the window. If you make a complaint now, you're probably not going to hear back from someone until September October time, and they're okay with that. That's how they judge the volume of complaints.
Dia goteris there's going to be that many. There's going to be that many.
But you can just go, I mean, let's just talk about how this happened, right, So there's there will be thousands and thousands of people now driving around in cars on which they've effectively paid interest rates two percentage points ish and of all the ones that I've looked at, looks like two to three percentage points above what possibly they should have paid. And they should be able to reclaim the difference, right they should.
Yeah, And it's actually not that difficult. I mean, I've already seen and actually had calls from the legal firms who want to help you and take a cut of your money. But it's really easy. If you're not too sure whether you had a discretionary commission agreement or not, call the broker or the dealer and ask them. They have to tell you if you did, then just submit a complaint to Financial Ombudsman service and wait a long while. It's going to be a long while. It is as simple as that.
So you go to the financial almost Budsmen. I find out a very difficult word to say, almost budsman, and they have Onbardsman and they have a special portal online portal three. So they put all these complaints right, so it's not difficult to do. You should be able to do it yourself and then if you're if you're lucky,
you'll get a ground back. The FCA, what they have said is that individual buyers on a ten thousand pounds four year finance package are paying something in the region of pounds more than they needed to.
It's real money.
This is real money.
Martin Lewis that of moneysavingexpg dot com. He reckons that this is going to be as big as a PPI miss selling scandal, and that was forty billion quid and it was a kind of people's qe. You know, everyone got this money back and suddenly there was a consumer spending boom, so maybe we'll get the same again. A consumers spending boom. Is everyone gets their money back.
I really hope everyone gets their money back because they deserve their money back because the way they were sold these products is not correct.
Okay, I'll tell you what Before we move on to talking about cause in particular, which they know the bit you really want to talk about, Let's talk about something else that suddenly looks rather more expensive than perhaps we thought it should, which is car insurance. Now, I was just my car insurance, but has gone up John Steppeck's car insurance but has gone up massively. Our listeners already fed up the back teeth of the need to talk
about his car insurance bill. And one of my Twitter followers just sent me something saying, just have my car insurance renewre through from churchill Man sure of nine years, no changes, no claims, premium doubled.
What is going on there?
Okay, so I've heard terrible stories as well. Do you know what statistically the average increase over the last twelve months has been percentage wise? John to have us hazard A guess.
If we asked John's deepic, it's one hundred percent.
But I'm going to go eight twenty one percent, which is a lot, but you've got to bear in mind that the average comprehensive car insurance policy in the UK now sits at five hundred and eleven pounds. It's you know again, it's still money, but it's still not massive amounts. So we've seen increases. But there are these stories out there and much I don't want to add fuel to
the fire. I have to tell you about a client that we were asked to buy Alexus for last week and nothing made a ten grand car twenty it was a twenty five grand car. And he's in his eighties and his claims history is we're supposed to be putting this not brilliant, and he know that feeling. He couldn't get any quote apart from one where they quoted him and are you ready for this? I am seventy one thousand pounds a year.
So these stories, these stores see get a taxi.
We also we actually figured that we could get him a Bentley and a driver and make him a lot more money than paying his insurance premium.
I hope that's what he did. It's my retirement dream is to have a Bentley and a driver. I really hope he did that. Dreams can come true.
Sadly he didn't, but you know he's still has time to change his mind. Ye. So you know they've been increases in insurance, but the main reason is it's the cost of repairing cars has gone up. Car parts have gone up by a third in the last year they've written by about general cost. Repairs have risen by about thirds. Every time an insured repairs someone's car, it cost him a third more than they did previously. Car parts are up between twelve and twenty one percent. So you know
it's that's the parts alone. There's there's a major lack of supply. Certain manufacturers are really struggling. Land Rover parts are a nightmare. I know people who had land Rovers waiting for parts for six to eight weeks, parts that the car can't run without. Tesla not so bad at the moment, but historically have had problems getting parts of their cars. I've known as the drivers who waited seven or eight months have their car repaired because they just
can't get the part in that they need. And of course, as long as a car sits a repairer, the repair is charging storage courtesy cars. So yeah, Curtsey cards have gone up and it's just that's that's a massive cost as well. Are there any signs of it getting any better? I don't think so. I don't think car prices are going to a car park prices are going to come down, I don't think.
And this is this a global supply chain problem?
Yeah, for a lot of parts it is. Yeah, And you know it gets worse because then parts can't be shipped in the quickest way, they can't come ray, the sewers canal at the moment. There's all you know, a lot of a lot of manufacturers were in Ukraine. It's a whole lot of different factors that have come together to make it. Yeah, a pretty pretty bad situation.
Okay, So is the lesson that don't buy a Landrover and don't buy a.
Tessler say that without getting sued on a podcast? Yeah, yeah, yeah, I wouldn't buy a Tesla And I now expect all the Tesla lovers to come and hate me for saying that that comment. Land Rovers have a separate issue as well. Land Rovers have been accused of being stolen left, right and center, and the reality is not all that bad. But speaking to an insurance broker a month or so ago, who said that if you live in London and you have a new shape range Rover, Sport or range Rover,
if it's parked on the street, forget it. It's parked on the drive twenty grand a year, so.
It's parked on the street. You can't get insured at all on the drive every years.
What they is what they started now land Rover has since launched. They have since put a lot of time and investment into their own insurance products because they want to solve the problem themselves. So that I think land Rove insurance being silly money at the moment, will change, but I think general for all of us, I think it's going to be the way it is now for the foreseeable future.
Tell me where the value is in the secondhand car market at the moment. Now, what's happening in the market as a whole? We have this period, didn't we post pandemic when secondhand car prices weren't absolutely berserk because you couldn't get new ones? And now that's turned around a little bit. What's the market looking like looking like as a whole? And where are the bargains? Where's the place to look?
It's a fairly recent thing that the values have started to come down, and they've kind of leveled out a bit now in the used car markets. I mean, there are certain things that are still struggling. I mean it's I think it's the same with any situation whereby when an economy is not been as good as it has
been previously. Although I think we all believe it's going to get better for this year, but things like, you know, the top end of the market, the Ferraris and the Bentleys are a bargain right now because no one really wants to be buying them.
Okay, I'm interrupting. I'm interrupting.
What do you mean by a bargain in the context of a Bentley, the prices have come down by.
Yeah, okay, yes, they're that expensive. So you know, where's the Bentley would have been six months ago, sixty thousand pounds It might be as low as forty five to fifty now, And that's in percentage terms. It's a huge decrease. Some electric cars are even worse because there's been a lot of bad pr about electric vehicles lately, and it's
not very fair. I was at a family gathering yesterday and two separate members of my family were saying, oh, they could never have electric car because they can't handle the charging. Now, I ran an electric car for three years, and I ran it because I wanted to figure out how you wrap your head around charging it. And when you've got past that herd or it is actually really easy to run an electric car. But the values are
falling through the floor. Probably the most extreme example I can give you about electric vehicles is we source an Audi e Tron, which is ow this big kind of family four by four electric vehicle. We sourced it for a client probably a little of a year and a half ago, and at the time you had to wait a year for a brand new one, so we paid a couple of thousand pounds less. This cor would have
been brand new as seventy two thousand pound. Eighteen months down the line, the client wishes to change over something else. We managed to get back for him from our poly exchange partners. After trying everything we could. Thirty thou pounds went from seventy two grand to thirty grand in the place the eighteen months, and they continueing to fall. So right now, electric vehicles are are They're not a bargain, but they're getting cheaper.
Isn't this about people recognizing how difficult it is to get new batteries and of zie understanda moving into a bit where you're going to say, you don't have to anything about cars, maren, but you know the batteries need replacing. They're extremely expensive. The whole thing is quite difficult to repair. And so people are beginning to see that the second hand electric car is not something you really want.
I'd actually flip it on its head because for me, electric cars are much simpler than a petrol car. Because if thing of a combustion engine, how many thousands of parts are in there? Electric motor has got a fraction of the parts in there. You know, when Tesla first started out, they weren't producing the best quality cars. In fact, their bill quality was pretty shoddy to say the least.
Yet there weren't massive reliability issues because electric cars are just so much simpler, so fewer parts and there are To give an example back to Tesla, there are testas on the road that have got one hundred and fifty two hundred thousand miles and still retain most of their charge.
But there are other manufacturers. When I drove a mechanic and mind bought a Nissan Leaf that was ten years old and done thirty thousand miles and it's battery range with down to about third of what it was previously, And a part of it depends on how you treat the battery. And cars are getting better. So the technology is progressing, but I wouldn't necessarily say that electric car is going to not last as long. And the feedback I get it's about the charging of it, not necessarily
reliability of it. But I think as the year goes, I think twenty twenty four carries on electric vehicle parks are going to carry on reducing to such a level that I think people who don't want evs are going to be buying them because actually they're I think they end up being cheaper than their petrol and diesel equivalents. People bindly just because they're cheaper. Thing that's gonna be an interesting time to live in.
Interesting.
So you are pro Bentley's pro electric cars at the moment, but I think you're anti hybrid?
Is that right?
Am I anti hybridsh I have to come out? Yeah?
I mean I look at people who have hybrids and I'm like, what is the point You just made your car a whole load heavier, and I know, I know, you never plug that thing in.
You're okay. So there's three types of hybrids, and what you've mentioned there is a plug in hybrids and plug in hybrids. I do of an issue with because you've just made the point exactly right. You are towing around the weight of a combustion engine and an electric drive train. Self charging hybrids, the ones we don't have to plug them in. I go hots and cold about and I go hot and cold because if you look at it on paper, they actually are better, and it varies manufacturers
to manufacturers. So Toyota have always done hybrids. Toyota love hybrids. They everything they do they do hybrids. And at the same time Toyta were doing hybrids. Ford for example, we're sticking one liter three clid the turbo charge engines in their car. And even though on paper the toyt was getting better fuel economy and better SEO two output, in the real world there's very difference between them. And the hybrid has uses materials for all over the world. They're
not very electric cars. Hybrids plug in hybrids. The material that takes to make the cars is incredibly damaging for our environment.
Okay, we need focus. We need focus because we have to answer these questions for John. Because John needs a new car, right not on your car, a new old car.
So should he trade this thing in now?
Or is the environment going to get better?
And should he trade this nasty thing in later in the year.
I actually think the market is going to pick up a bit as a year goes by, So I think used car, so as his upgrading, it's the cost.
Of change, is upgrading?
Well, I can't downgrade from from this current car, can he? No? So you know, so it's cost of change. So yes, right now he'll get less for his get less part of changes current car, but he'll buy his new car for less mine as well. So yes, now is the time to do it. I think as a year progress is Yes, he'll probably get a little bit work back for more for his current car, but he'll pay more for the new car.
Let's talk about what John's going to do when he goes to buy the new car. You've actually got a great guide to this center. I don't I don't want to, you know, pick up actually too much. But if you go to his website, there is a great guide to
how to buy a used car. And obviously if you don't want to read that, that's okay, because actually's going to tell you right now one of the most important things you need to have in mind if you're going to trade in your unsuitable car for one that will make children like him more.
Absolutely so. I mean, the guide is twenty eight pages long, and I try to keep it short from some of that is appendices. So there's a lot you can learn about how to buy a buyer cars. It's free to download from our website, so anyone's very welcome to distill it down into three top tips. I'd say top tip number one is to buy a car from someone you get on well with, which sounds like a weird thing
to do. And I know we all like to buy to give our money to people we like, but there's something about that level of trust in your gut when you're spending so much money that's got to be right, you know, if something doesn't feel right or deal just seems good to be, to just walk away. Yeah, and you mentioned houses when we're talking at the start. You know, houses are very different. Every house is different from well not every house, but virtually every house is different from
it from another house. Cars are cookie cutter things.
You know.
If you buy a black BMW three point thirty I M sport with beige interior, it's the same as every other one. So you know if one, if one deal is not working out, you'll find another one out there. But yeah, you know, to buy for someone you like, and please pick up the phone to them. Don't just look on their website or send them a message. Pick up the phone. You really want to find out whether you can measure someone. Talk to them on the phone.
It's it's the best way to do it. And you know, if your spidery sense tingles is not right, absolutely move on. So that's number one. Buy a car from someone you get on well with. There's always always dumb.
Me proud, okay, And talk to them on the phone. People are so bad at talking on the phone these days. Just pick up the phone. You get more of a sense.
Number two, get proof the car exists. The biggest scam out there at the moment is criminals who will create a website it's a clone of an existing car dealer's websites, so when you google them you see that it's that they're the real person, but it's a space. It's a spoof website with a spoof number the advertised cars that are genuine cars, and people get they're called up, or
they go online, or they don't call up. They place an order for this car, they're expected to be delivered, and the car is never there, and their money disappears. And it happens, It happens. It happens a fair amount. I ran an experiment in probably about fifteen years ago where I placed an advert an auto trader for a car that was twenty five percent below the value. And I can't tell you how many calls and message having, people going, I want to buy the car now, or
send you the money now. You know, it's make sure the car is physically there. Now. That may mean going to go and physically see the car. It may mean using a car finding service. You know, of course I can recommend a great one of those to go and do it at work for you. Or it may mean, you know, buying a car from someone that you know
is reputable, like a large outlet. There are lots of these direct car sales companies out there now, although they haven't fed quite as well as they would do because I think that the car PI public has proved these these disruptors that actually we want to go and see our cars. You know, Karzam went into administration. There are three big ones around the start of lockdown, Karzam, Sinch, and Kazoo. Karsam went into administration back in twenty twenty two.
Kazoo has gone from europe wide to UK wide to restructuring its debt in December, never being profitable. Since are a large part of the Constellation Automotive group, their site as being one of the reasons why that group's using lots of money. You know, fine to go and see a car yourself, but please please do that. Just take care of you, you know, making sure the car physically exists. So that's number two.
And then can I interrupt on that test because one things I have actually read your user guide, you know read it.
One of the things that you say.
In them is to never agree to meet someone halfway. Private buyer will often say, gosh, it's a long drive for you, I'll meet you halfway.
We'll meet at the cost at the worst shopping center.
It's something that used to happen. I might be taking a lit bit my age here, But you meet someone at service station with a bag of cash. Why do you want to show gotture service station and meet someone who knows where you're going there you can have cash in your pocket or now to do a bank transfer. Yeah, yeah, it's personal safety. People. Please remember that you're ready for
number three. I am do your homework and that means that you run a car date to check on the car you're buying yourself, to make sure everything stacks up. You know when a car dealer says, or actually any sellers's full service history. Remember the three words full service history are the three most abused words in the used car industry. Everyone says full service history. But you need to know whether your car is due sercing every year
or every two years. I had to find out from the seller that it had its service on a date, B date, C date and E data and it all checks up and it's all fine, and they have all the paperwork there. And a third bit of you're doing your homework is have a look at who you're buying the car from. Look, if you're buying it from someone privately, it's not so easy. But if you're buying from a
daler look at their online reviews. If they're on somewhere like auto Trader, they cannot edit those Auto traded reviews. You know, have a look at that. You know, do your homework, make sure that that there isn't someone out there. And if someone has a negative review, same with any company, A good company worth it, so will apply that negative review and offer their point of view and be fair about it and not too ranty. So yeah, look at that.
So yeah, those are my three top tips. You buy a car from something you get on with, make sure the car physically exists, and do your homework. And for another ninety five tips, download the guide for free.
So now everyone's listen to you and they're excited to hear about your knowledge. There in their mind they're thinking how many cars does I actually have, what kind of cast does he have, etc. They're also thinking for themselves, if I actually could buy one car right now to add to his fleet, that would be a really amazing car and would definitely offer value.
Not a Bentley. We talked about Bentley's what would it be.
Off a value?
Well off a value in the sense that it would offer value in terms of both the experience and the price, and crucially hold its resale value.
So I'm sorry to give you two answers on this because a that's not a question to ask me. For me, I want to buy a car that's going to keep its value, it's going to do well. I'll be looking at a nineteen eighties Ferrari or something weird and bizarre like that. But I don't think most people should go out and buy a car like that because it's just not what they're looking for for a normal person. And I am not normal when it comes to the world of cars, because my tastes are very weird for a
normal person. I actually really like Hyendys and Keys. They especially the used market. They're really well screwed together. They come with great equipment levels, they're good value, and they come with massive long warranties. Will I ever buy a kir or Hynde. Maybe it's not. They're not gonna be top on my list because I'm really into my cars. But for most normal people, I think that's where the value for money is right now.
Absolutely, Ashley, thank you so much for joining us today, an incredibly useful pleasure. Thanks for listening to this week's Maren Talk to Your Money. If you like us, show, rate, review, and subscribe wherever you listen to the podcasts.
Also digest topics you want us to.
Hit in the comments section. This episode was posted by me Maren Sunset Web. It was produced by Samasadi, additional editing by Blake Maples and special thanks of course to Ashley Winston