This site uses cookies to shape your online experience. Read more

Tips on buying a car

16/12/2019

From finance options to getting a good deal, here’s a few things to consider.

Money Finding your car expensive? Looking to cut back your spending? Cars can become expensive but follow these 4 ...
Money Making sure you’re ready to apply Your credit rating as well as having the right documents ready will help your lo...
Money Do you need to review your existing accounts? Updating your bank accounts could save you money and allow you to access more fe...

One of the best times to buy a new car is towards the end of the year, when dealerships hold end-of-year run-out sales and are motivated to sell vehicles that will soon become an older model.

However, while it may be tempting to treat yourself to some new wheels, here are some strategies to put in place to help you get a good deal.

The ins and outs of car finance

If you don’t have the savings to pay for your car upfront, you’ll need a loan. And if you haven’t taken out a personal loan, the salesperson at the dealership may offer to organise finance for you.

In theory, this sounds great (and convenient). The salesperson can sort out the paperwork, may offer to throw in some additional features and all there is for you to do is sign on the dotted line and drive the car home. But if it sounds too good to be true, it may well be, which is why it’s important to shop around.

What are non-bank lenders?

Non-bank lenders are competitors to traditional financial institutions, operating with different models.

There are many of these lenders on the market, which make their money in different ways – either by higher interest rates or by taking a cut from both the lenders and the borrowers (and sometimes a fee for using the platform).

Before signing up for a loan with a non-bank lender you should read the loan documents carefully and note the comparison rate so you can see the true cost of the loan and how much it’s likely to cost you (including fees and upfront costs). You should also ensure you shop around and compare loans from traditional lenders.

Checklist: 6 things to do before you buy

Buying a car can be exciting. It’s easy to be distracted by what’s on offer and to get caught up in the deal being offered by the sales person. So before you take that step, go through this handy checklist.

  • Work out how much the repayments will be. Over-committing yourself financially can be scary and overwhelming. Before any big purchase (like a car), you want to make sure you can meet the repayments. A budget planner can help you calculate your expenses.
  • Calculate all the extra costs. Rego, servicing, and car insurance can cost you thousands per year on top of your car loan, so be sure to factor in these additional expenses.
  • Consider your financing options. You can apply for small personal loans through banks, building societies and credit unions – and you may find the process easier with a financial institution you already have a relationship with.
  • Do your research. Compare the interest rates and fees and charges on any loan you’re considering – including penalties for missed repayments, or fees that may be charged if you pay your loan out early. You’ll want to compare a range of different companies to ensure you get a deal that’s right for you.
  • Read all contracts carefully. If you’re offered finance at the car dealership, the salesperson may use high-pressure tactics to get you to sign the contract on the spot. Ask for time to review the contract, always read the fine print and check the credit provider is licensed through the ASIC website or by calling ASIC’s Infoline on 1300 300 630.
  • Shop online before hitting the dealerships. Before heading to a dealership, look online for cars in your price range and area to do some background research. You can then make a short list and phone dealers before going to test drive the car in person. Armed with knowledge about available vehicles, prices and your budget, you’re more likely to make a sound financial decision.

This article is intended to provide general information of an educational nature only. This information has been prepared without taking into account your objectives, financial situation or needs. Therefore, before acting on this information, you should consider its appropriateness having regard to these matters and the product terms and conditions. Information in this article is current as at the date of publication. Terms, conditions, fees, charges and credit criteria apply. We do not recommend any third party products or services and we are not liable in relation to them. Any links to third party websites are for your information only and we do not endorse their content.

Personal loans

Our competitive fixed interest rate personal and car loans help you get what you want sooner.

Read more

Send this article to friends and family

Share
Money A guide to budgeting Follow our simple budgeting tool to help get your finances in order.
Money How to save on your energy bill Tips to keep your energy costs down this summer.