Car buyers in the driver’s seat to steer a good deal
Next month thousands of Australians will take advantage of end of financial year car sales, but all buyers should do some homework first to make sure they’re actually getting a good deal.
With June consistently being the most popular month to buy a car – particularly in 2012 when sales rose 17 per cent compared to June 2011* and with demand in Europe slumping by as much as 20 per cent – Australian car prices are falling, making it a buyers’ market.
It’s easy to get swept up in the excitement of shopping for a car, particularly during the promotional periods, but buyers could save hundreds of dollars more if they sort out their finance first.
Sorting out your finances before shopping around helps give some clarity on what you can afford. It also gives you better bargaining power, especially if you get your loan pre-approved because you know your budget and can negotiate a deal straight away. This could save you thousands of dollars and could potentially offset any lower finance rates offered by the dealership.
Dealer finance packages can have appealing interest rates and be very convenient but you should consider the fine print.
Our top five tips to consider when securing car finance include:
1. Before you start test-driving, get a car loan pre-approved
2. Consider all the terms and conditions on your car loan, not just the interest rate – do you need a deposit, is it a short-term agreement, can you make extra payments?
3. Read the fine print, particularly with highly promoted low rate loans – is this loan for a particular car, e.g. new not used, and is it available for a limited time?
4. Consider all expenses, not just the cost of the car – this includes stamp duty, insurance, running costs and interest
5. Explore a few loan options – talk to financial institutions
Do you have any questions about taking out a car loan? Feel free to leave a comment below.
^Ray – General Manager, Distribution
*Source: Federal Chamber of Automotive Industries