Tips for buying a car
Here are our top 10 tips:
- Once you’ve decided on your dream car, consider getting a pre-approved car loan so that you know exactly how much you have to spend. That way you have bargaining power when negotiating the final sale price.
- It is important to consider all of the features of the different car loans as well as the interest rate when comparing them, such as whether you can repay extra and if you can redraw those extra repayments and what loan fees you have to pay.
- You can research different car models, features, and prices on the Internet. The Red Book website www.redbook.com.au is useful for finding out the market value of used and new cars, especially if you have a trade-in to offer. Other useful websites include: howsafeisyourcar.com.au and greenvehicleguide.gov.au, which provides star ratings on environmentally friendly cars.
- If you are buying a car through a dealer, make sure you negotiate a ‘drive away price’ rather than a weekly payment plan. You may think that you’re getting a great deal by bundling finance and paying a low weekly rate, but beware – the repayment period may be longer than you think and in the end the total cost of the car could be far more than what you expected.
- If you want help finding a car, consider using Car Search Brokers Australia. They will do a national search for the car you want, help you get the best price without the run around and even arrange transport and registration.
- If you’re looking at a used car, ensure that it is not still under finance as it could end up being repossessed by the financier leaving you out of pocket. Visit REVS in NSW and ACT, EZY REG in SA and Department of Transport WA to conduct a search – they may even be able to tell you if the car has been stolen, written off or defected.
- Another smart option for used cars is to have the car inspected to ensure the car is mechanically sound through your local mechanic or automobile association.
- Use a checklist when looking at a car to help you focus on the important features so you don’t miss anything. Your local automobile association has handy checklists you can download from their website.
- Don’t forget other expenses, like stamp duty and insurance. It’s a good idea to get a quote for vehicle insurance before you buy the car so that you know your ongoing expense. Then once you’ve bought the car your insurer can start your policy immediately, giving you peace of mind.
- Keep in mind that it takes much more money to keep a car running than simply paying off the loan. On average, the total cost of car ownership is around 1.5 times higher than the cost of paying off the loan. Remember to budget for insurance, petrol and regular maintenance such as servicing, new tyres and registration.
^Paul – Lending Services Manager