Buying a car in Australia: five tips for a better deal

Be sure to choose wisely when it comes to choosing a set of wheels you can trust.

UNSPLASH

Be sure to choose wisely when it comes to choosing a set of wheels you can trust.

One of the first tasks Australia faces is sorting out some wheels once on the ground. There’s a lot to know when buying a car, especially as the Covid hangover is still affecting the new and used markets.

Savvy, one of Australia’s leading auto finance brokerage institutions, has shared these handy tips that will help you navigate the process with ease despite the current circumstances.

  1. Think carefully about your needs (and your budget)

Any major purchase should start with a thorough assessment of your wants, needs and desires. Yes, we would all love a Ferrari, but that’s not going to cut it in the Outback or the school race. Be realistic about your needs and what you want from a car (the New South Wales government has a Helpful and comprehensive car buying guide). Consider the list price as well as insurance and running costs. Fuel prices are skyrocketing, and for those heading to the bright lights of big cities, a car might not even be necessary (Uber is definitely a thing). A car is not an impulse buy; don’t treat it as such. Make the best decision based on your needs and your budget: don’t go flashing just to skimp on meals.

A car is not an impulse buy;  don't treat it as such.  Make the best decision based on your needs and budget.

UNSPLASH

A car is not an impulse buy; don’t treat it as such. Make the best decision based on your needs and budget.

  1. New vs Used and Demos

Always a major consideration given that used cars often cost a fraction of the price of new, the “tale as old as time” has a new twist. Supply issues in the new car market are also impacting used vehicles. Fleet owners who keep their cars longer have fewer vehicles coming onto the used market, driving up prices. Along with careful due diligence on a used car, finding the best financing with the most favorable interest rates can make a real difference in your payments and the ultimate cost of your car.

If you’re leaning toward a new car (with that electric car rebate incentive in mind), it’s worth considering a demo. These models are often very close to new, benefit from significant discounts and benefit from the guarantee of the manufacturer and the dealer. Be careful though. If you’re on a budget, don’t be tempted to max out the deal with all those flashy optional extras, especially if you’re financing your vehicle. You don’t want to finance “must haves”, it drives up the cost considerably, especially over a full 36 or 48 month period. And if they sell a “protective coat”, dash mats or extra tinting…that’s a HARD no. You can do without it or get this stuff much cheaper elsewhere.

What if you buy privately? Always check the Personal Property Security Registry to see if there is money to pay.

  1. ICE, hybrid or electric?

Another new, and for most of us, car buying in Australia is the wider range of powertrain options. There’s ICE – the old-school internal combustion engine powered by dinosaur juice, joined by hybrids that combine a small gasoline engine with an electric motor, and of course the most environmentally friendly all-electric option. With Australia’s federated structure, the incentives available for electric and hybrid cars differ from state to state and apply to new and used electric vehicles and FCEVs (fuel cell electric vehicles), with up to AU$7,500 in rebates available. On top of that, hybrid and electric cars promise less running costs. Factor these numbers and considerations into your decision-making process.

Yes, we would all love a Ferrari, but that's not going to cut it in the Outback or the school race.

UNSPLASH

Yes, we would all love a Ferrari, but that’s not going to cut it in the Outback or the school race.

  1. Compare car financing options

It’s important to compare your car loan options to ensure you get the best loan available, based on your credit profile.

You should carefully consider the interest rate; Should I opt for fixed or variable? Also think about monthly repayments and the “wiggle room” in your personal budget that you might need, just in case. A longer loan term will give you a more affordable repayment, but will cost more in interest repayments in the long run.

If time is of the essence, then a product with quick loan approval and the ability to borrow 100% of the car’s value may be more important. It all depends on your situation. For super savers, no early exit fee can be a bigger draw card. That’s the real benefit of using an auto finance broker: they offer a side-by-side comparison of different lenders and let you choose from a range of loans you’ll actually qualify for.

  1. Avoid dealer financing

The shimmer and shine of the showroom floor is the perfect place to check out vehicles and the last place you get financing. Getting the most convenient deal usually means paying for the privilege. It can also mean being tempted to blow more than expected. Remember the first tip? There’s a reason budgeting comes first; no need to choose a Land Cruiser when the money says Micra. More than that, Stuff has already shown that car dealerships do a ton of finance and the money comes out of your pocket. Here’s ‘Why you should never accept financing from a car dealership’. You could end up paying a good $1000 more than you owe.

For more information visit: https://www.savvy.com.au/

About Robert Pierson

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