Make sure you can afford it
Cars are expensive on their own, but they also come with a lot of extra bills. Think insurance, stamp duty, rego, and servicing not to mention fuel, parking and potential repairs.
So it’s important to budget and consider not only if you can pay for the car initially, but also the associated bills. Create a budget and make sure you’ll be able to comfortably factor in these extra costs each month.
Do your research
There are plenty of cars on the market with a big difference in price. Start off considering how much you will be using your car each week and where you will mostly be driving.
If you’re an inner-city dweller, a smaller car might be preferable so you can easily zip around and fit into tight spots.
Live more rural? Maybe a 4WD is needed so you can switch to off road safely.
Research your options and start to narrow down the best car for you.
New or used?
Now that you know how much you can afford and what kind of car you need, it’s time to decide whether you want to buy brand new or second hand. There are positives and negatives to both.
A brand-new car has the benefit of personalising and choosing your extras (think what colour, adding a rear-view camera or even a sunroof). Plus, a new car also comes with a warranty which can be great for peace of mind. However, it does come at a cost with the average car losing thousands in value just from driving it out of the car yard.
A used card can be a great value decision, especially if you shop around to find a good deal. Be sure to consider the cars mileage, safety and the likelihood of future maintenance and repairs, which can each add a significant amount to the total price of running your car down the track.
Buy outright or through financing
Cars can be a big financial outlay, so finance is a common way for many people to buy their cars, whether it is new or used. Financing is essentially a personal loan to pay off the car and is usually a fixed term of around five years.
Some key words to look out for include interest rates and balloon payments which can change how much you pay for the car in total.
Again, research is key here to make sure you are getting a fair deal. You can start your groundwork by checking out our secured personal loans, as well as our green loans which offer discounts for A rated fuel efficient car purchases.
Time to test drive
Now for the fun part! It’s time to take your car for a test drive. This is an important step to ensure the car runs well and suits your needs.
Make sure you feel comfortable in the driver’s seat and can see yourself cruising around in the car in your day to day life.
Any advice provided in this article is of a general nature only and does not take into account your personal needs, objectives and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable product disclosure statement(s) on our website before making an investment decision.