Buying a Car – Pitfalls to Avoid

  • Posted 29 Oct
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Buying a Car – Pitfalls to Avoid

According to a recent report from Ray Morgan Research, demand for new cars in Australia is increasing and over 2.3 million people plan to buy within the next four years.

If you are one of these customers searching for the best new car to fit your budget and driving style, these tips can help you avoid potential pitfalls.

 

 

Understand your needs

 

You’ll most likely keep your car for five or more years, so you want to do your homework and find a vehicle that matches your driving needs. Do you want a compact car that’s easy to drive and maintain or a rugged SUV to go camping with the kids?

The purpose of this exercise is to resist making an impulse purchase. Sure, you may feel fabulous driving a racy sports coupe, but if you’ve already made the decision to buy a family sedan you won’t be tempted. Look at long-term maintenance costs as well. Fuel efficiency and repair costs are important to consider over the long term.

 

 

Stick to a budget

 

Don’t make a decision you’ll regret later based on an emotional reaction at the dealership. It’s best to know your numbers and the limit of what you are willing to spend before you ever walk through the door.

In addition to deciding what models you want to look at and what you hope to pay, consider the available options too. Luxury models often come fully equipped, but otherwise you may have to budget for upgrades if you want leather seats or a sunroof.

Keep in mind the added fees you’ll need to pay such as CTP insurance, stamp duty, and registration. These extras can be a substantial part of your budget, adding up to $1,000 or more.

 

 

Line up a car loan in advance

 

Many dealers offer car financing, sometimes at 0 per cent or a very low rate. But these great deals may only be available on certain models, or may only be offered to buyers with a top tier credit rating.

Your best bet is to get preapproved from an outside lender before shopping for a new car. If the dealer can offer you a better deal, then take it, but this way you’ll know you have options.

 

 

Don’t offer a trade in

 

There’s a convenience factor in negotiating a trade in as part of the new car sale. But if can arrange to sell your old vehicle to a private buyer, you’ll definitely make more money than you will if you trade it in to the dealership.

 

 

Read all paperwork carefully

 

A car is likely your second highest expense after purchasing a house, and car buying can seem just as complicated. You’ll need to read through everything to make sure that you are getting the deal you think you negotiated.

Many pieces of the car-buying puzzle are negotiable, including the purchase price, drive away fees, and your trade in value. Make sure you get everything in writing and read all the clauses carefully.

Planning your next car purchase? Let Australian Credit and Finance help. Contact us today and let our car loan specialists help you get a great rate.

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