A car is one of the biggest purchases we make in our lives and something that most of us will do more than once. Unfortunately, there are a lot of dud deals out there and ways to get ripped off. Here are six things that you should think about before buying a new set of wheels.
1. Wait for the right time to buy
There are three main times when you’re likely to get the best deal on your car
- End of financial year
- End of each month
- End/start of the calendar year
These are the times dealers will be clearing out their stock, trying to reach sales targets and will be more likely to price match with each other.
2. Think about your finance and related costs
Before deciding on a car, it's important to figure out what you can afford. Remember that cars come with many associated and ongoing costs such as registration, insurance, maintenance, replacement tyres and fuel.
Setting yourself a budget should help you avoid getting carried away and paying over the odds and helps you decide on the best and most cost effective way to pay for your new car. If you need finance, there are two main options:
Dealer finance: It can be convenient to arrange the finance at the same time that you buy your car, but be mindful that dealers will usually charge a high interest rate, with potentially higher fees too.
Car loan: You can also consider a car loan from your bank or other financial institution, which could be more cost-effective. To save money in the longer term, you can look out for loans without fees for making extra repayments, so you have the option to pay it off sooner without penalty.
3. Get a car with a good safety rating to save on insurance
The type of vehicle you drive is one of the main factors that affects the cost of your insurance. If the car you buy has a high safety rating (the Australasian New Car Assessment Program rates cars from 1 to 5 for safety), this can lower your premium, as you’re seen as less of a risk on the road.
However, be careful not to purchase unnecessary extra safety features when buying a new car (reverse cameras, for example). These features can actually increase the cost of your car insurance as they cost more to repair or replace.
4. Don’t pay for extra features you don’t need
Once you know how much you can afford to spend, you can decide on the sort of car and extra features you’re looking for. Are you willing to pay more for a certain brand, extra leg room, leather seats, safety features, warranty, or smart-car technology?
Knowing what you want and what you should pay will help you save time and be less likely to purchase unnecessary extras. For example, do you need a car with built-in satnav when a smartphone mounted on your dashboard does much the same job?
5. Could you save on fuel?
Your choice of car will have an impact on your finances long after the initial purchase.
As a general rule, bigger cars are heavier and will consume more fuel than smaller vehicles, meaning more to pay at the pump.
Buying a car that’s fuel efficient can really help you save in the long run (even if it means paying a bit more for the car upfront). It also helps to reduce your environmental footprint.
6. Do your research before heading to the dealership
If you have a general idea of what car and features you want, jump online to check out how much the car should cost and where you might get the best price. Remember, there are plenty of sellers out there and they’re all competing for your business. Don’t be afraid to ask for a better price than the one advertised, and walk away if you don’t get what you want.
That new car smell will be that much sweeter if you drive away knowing that you have purchased the best car for you, at the right price.
Please note that this is only intended as a general guide in relation to issues you may want to consider when buying a car. It is not intended to be an exhaustive list of all relevant issues and does not take into account your personal needs and financial circumstances. You should take into account your own particular circumstances, and obtain independent expert advice where needed, before proceeding. Examples quoted are indicative only for illustrative purposes.