- Posted 12 May
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Purchasing a new car is a major investment for most people, and the car buying experience is different from buying any other consumer good. The biggest difference is that car dealerships don’t have a fixed price for the vehicles they sell. You’ll see a listed recommended retail price, usually noted as MRRP or RRP. As the name implies, this price is a suggestion from a car company or importer, but it is not set in stone. Here is where issues can arise…
Doing your research before visiting a dealer will help you get a better deal on a car loan. If you have a vehicle that you plan to trade-in, you’ll definitely need to do some online searching to determine a fair trade-in price.
Before you do any serious shopping, try to narrow down your choices to a few cars you seriously want to explore and test drive.
To begin the car buying process you’ll want to visit at least three different dealers in three local areas close to where you live and work.
Sometimes vehicle manufacturers offer different pricing incentives in different locales, so you may find a better price by shopping non-local dealerships. Aim to check your local dealership last, and if the prices are comparable you’ll want to buy there for the convenience factor.
Car finance can be a confusing puzzle, so you’ll need to have your facts handy and be prepared to negotiate. When you decide on the vehicle and have researched prices for the make and model and all the accessories you want, you’ll be in a strong position to make a bargain.
Understanding the driveaway price
Once you’ve settled on a price you are willing to pay for your new car and have reached an agreement about the trade-in value of your current vehicle, the salesperson should give you a clear idea of your driveaway price. In addition to the cost of the vehicle, you’ll need to pay on-road costs. These charges include stamp duty, dealer delivery fees, registration, and insurance.
When negotiating a final price, make sure these fees are part of the package. Dealer delivery charges can be as high as $1,000 to $3,000, so you definitely don’t want a charge that high tacked on as a hidden fee after you’ve settled on a price.
Beware of extras that dealers may try to sell you at a higher mark-up. These can include an extended warranty, paint protection, rustproofing, or interior finish protection. Most new vehicles come with a five-year warranty and the interior and exterior are already ready for daily use without additional treatments.
Best time to buy
Many dealerships end their financial year on June 30, so this can be a good time of year to find extra bargains. Dealers want to reduce their inventory before taxes are due and may be willing to make a deal.
Another good time to purchase is at the end of the calendar year. If you don’t mind driving last year’s model, shopping in December may save you thousands on a new vehicle.
If you want to explore your options for a new car loan or need help with locating the right car, we are here to help. Contact Australian Credit and Finance and speak to our financing experts.