Buy one car, get one free?

Potential deflation is sprouting bargains including amazing offers to those wishing to buy a new car, but they may not be as good as they seem

With inflation (RPI) at its lowest level in nearly half a century, we may actually experience deflation in a couple of month's time. And while this spells doom and gloom for the economy, anyone with a few pounds to spend may feel slightly different as retailers slash prices in a bid to clear shelves.

And the bargains aren't restricted to the shopping malls. With so many of us cutting back on the non-necessities, gyms to dry cleaners have offers galore. And commuters will be thrilled to hear that there have recently even been rumours of cuts being made to train fares, next year.

Buy one car, get another free

But I think one of the best purchases to make at the moment is a new car. January car sales were down a whopping 31% compared to January '08, according to the Society of Motor Manufacturers and Traders. With the arrival of the '09 car registration number this Sunday, dealers are desperate to shift old stock, meaning rich pickings for those looking to buy a new car. Indeed, the AA's president Edmund King has announced it's the "sale of the century: there's never been a better time to buy a car".

Certainly one of the most exciting deals in recent months has been the "Buy One Get One Free" (BOGOF) offers for cars. Yes, no longer confined to supermarkets wishing to shift tins of baked beans, the concept has moved to the forecourts where you can apparently drive off with two cars for the price of one. Fantastic! Or is it?

Buy a Vectra, get a Corsa for nothing!

I had a closer look at one of the deals widely reported. Vision Vauxhall, in Stafford is offering an amazing deal - if you buy a brand new Vectra Exclusiv CDTi (1.9l, 150bhp) you can currently take home a Vauxhall Corsa 1.2l (worth £7k) for absolutely nothing. The are no catches; the Vectra on offer has a pretty high specification, a 3-year warranty and 12 months tax, so for a 2-vehicle family looking to upgrade its cars it seems like a great deal.

Or is it? The Vectra mentioned is currently on sale for £17,984. I ran a quick search on Autotrader's website and found you can currently buy an equivalent car from another garage in the vicinity for £11,495 - meaning that you're effectively paying nearly £6,500 extra for the "free" car.

What's more, taking a closer look at the Corsa on offer I discovered that unlike the Vectra this car is not new; it's a 2008, ex-demonstration vehicle with 4-5k on the clock (running another Autotrader search revealed you can indeed currently pick up an equivalent model for around £7k).

So while you would be saving money (approx. £500) on buying both cars by taking up the buy one get one free deal, the Corsa is by no means free. Indeed, when you take into account the fact the Vectra is being replaced by the Insignia this year, meaning that models can be picked up from some dealerships from as little as £9k, it could be viewed as simply a brilliant marketing ploy to shift unwanted cars.

Kia deal

Another company offering a BOGOF on cars is online broker Broadspeed. It made headlines last year with its offer of a "Free Mercedes (worth £35k) with every Aston Martin sold", but for us lesser mortals it's currently offering two Kia Magentis 2.0i saloons for the price of one.

This offer has a little more flexibility: you can choose between the GS (cloth trim) option (two cars for the RRP £15,200) or LS (leather trim) option (two for RRP £16,675).

Cars can be mixed and matched, or even bought separately - so one GS model will cost £7,610, with the LS model costing £8,338 (and note: if you buy one car you must pay an extra 5%).

The cars were registered new in June 2008; they have delivery mileage only (20 miles max.) Kia warranties until June 2011 and 12 months tax. (Incidentally, it's worth noting that as Broadspeed is not a dealership itself, but a broker, it will also charge £299 introduction fee to put you in touch with the dealer involved).

Now, looking at the GS model, a quick search with Autotrader revealed you can buy an equivalent car for £8,495.

So if I wanted to take advantage of the BOGOF deal from Broadspeed, I'd pay £15,200 for the two cars, plus the £299 introduction fee - a total of £15,499 (or £7,749 per car) as compared to £16,990 for two from the Autotrader garage.

So, yes, there is a saving to be made with the BOGOF deal, but I'm certainly not getting one of the cars for free.

Verdict

It's therefore clear that while the "buy one get one free" deals succeed in grabbing headlines and can offer a saving, it's rarely, if ever as big as the value of a whole car. Indeed, these deals can be cynically viewed as a fantastic marketing ploy to shift older and less fashionable models - which is great if they're the cars you had your heart set on, but restrictive at a time when many dealers are open to offers.

My advice would be not to be seduced by the headlines - do your research and buy the car you really want. Dealerships are desperate to make room for the new registration vehicles next week so you may be surprised at the offers they'll currently accept to clear some space - and you could end up with the new car you want for a bargain price.

Good luck!

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