How to save money when new license plates come out
There’s a magic number in car-buying. It’s a number that changes twice a year, follows you around for as long as you own a vehicle, and can mean the difference between paying full-price and making a satisfying saving.
You’ll find this number on the license plate. And if you know how to take advantage of it at certain times in the year, you could be driving home with a great deal.
What do license plates actually mean?
The letters and numbers that make up a license plate aren’t just random combos. And beyond entertaining the kids with acronym games on long car journeys (EY02 BWE = Every Yellow Belly Wants Eggs) they do actually have a purpose.
The first two letters tell you where the car was first registered. LA to LY means London. MA to MY means Manchester, and so on.
The two numbers that follow tell you how old the car is. If the car was first registered between the start of March and the end of August, the numbers would reflect that year. So April 2018 would be ‘18’. If the car was registered between the start of September and the end of February, the numbers would be that year + 50. So November 2018 would be ‘68’.
How can knowing this help you save money?
Knowing when license plates change can be beneficial for two reasons:
- You can be the first person to get a new car with a new plate, and revel in the prestige.
- Or you can get a new car with the previous plate, and chop off a chunk of the price-tag.
If you simply must have a license plate that’s newer than your neighbour’s, go for it. These tips will help you negotiate a great deal.
If you’d prefer to walk away with a car that’s just as good but costs a bit less, read on…
March and September: the money-saving months
If you wait until the cusp of March or September, when new license plates are released, you can often save between 5% and 15% by getting the previous plate instead of the new one. Here’s why:
- Just before each release, dealerships need to work harder to meet their targets as some buyers are waiting for the new plates.
- Just after each release, dealerships want to clear out the older plates to make way for the newer, more profitable ones.
Save even more with a car finance plan
Of the 2.5 million people in the UK who buy a new car each year, 80% use some sort of finance option instead of paying upfront. And as long as you’re buying a new car as opposed to a used one, the rates and benefits can be highly competitive – especially when license plates are changing.
Cash isn’t always best
Although paying everything upfront in cash is great if you can afford it, because you don’t have any interest to pay and you own your car outright, that doesn’t necessarily mean you’re better off.
Just as staff are willing to haggle on the car itself, they’ll often sweeten the pot on a finance plan to seal the deal. This could mean you get your MOT, breakdown cover and other benefits thrown in for free, which might leave you better off in the long run. Remember, always do the maths and weigh up what is most important to you to work out the best option.
Choosing the right car finance plan
The deal you strike up with the dealership should depend on what you can comfortably afford month to month and whether you want to keep the car when the agreement is over.
You can find out about all the nitty-gritty of finance agreements in our guide to choosing the right finance product.
