Article up to date as at 19 June 2019.
If you’re thinking of buying a new car or your first vehicle, there are a number of things you need to consider.
We’ve put together a series of tips to help make the process of buying a car as easy as possible.
Tip 1: Assess your needs
To begin with, you’ll need to determine what kind of vehicle you want. It’s a fair assumption that most of us would like to be driving the newest luxury car with all the bells and whistles, but for many of us, this is out of reach. The trick is to assess your needs and identify which features are most important to you.
Consider the size: Do you have a big family to transport in your vehicle? If so, a sports car will not be the best solution. In addition, you should ask yourself if there are any add-ons that you would gladly pay a little extra for, such as a sun roof, alloy wheels, a larger engine, seat warmers etc.
Tip 2: Identify your budget
Once you know what features your new car needs to have, it’s time to put a number on it. Identify how much you’re willing to spend on your new wheels. If you’re going to finance your vehicle, you may want to think about how much you are happy to spend each month on car repayments.
When determining how much money you’re willing to spend on your new car, it’s also important to factor in additional ongoing costs, including servicing and insurance. Keep in mind that most dealerships will give you roadside assistance and several years of warranty.
Tip 3: New or used?
While a new vehicle is often the most desirable option, you may find that a demo vehicle and/or a used vehicle with very little kilometres is just as good. To help you decide whether you should purchase a new or used vehicle, it may be worth writing a pros and cons list. For example, the pros of buying a new car could be: its extended warranty, better fuel efficiency, better safety standards, and of course, that new car smell.
Meanwhile, some of the cons could be: higher cost and higher rate of depreciation. On the other hand, a used vehicle may offer you better value for money - especially if it comes with some kind of warranty. Meanwhile, some of the pitfalls associated with buying a used car may include: greater chance of it breaking down and a higher chance of it not passing registration.
Tip 4: Finance or cash?
Now you know what kind of car you want to buy and how much you’re willing to spend, you need to determine how you plan to pay for your ride. Will you pay cash for the car or do you need to take out a loan?
If you require a loan to finance the purchase of your vehicle, you'll have to decide whether you want to source the loan through a lender or the car dealership. It’s important to keep in mind that most car dealerships make their money through the financing side of the business.
As such, the loan they give you might not be the best rate or the right product for your needs. Your Mortgage Choice broker has access to a wide choice of lenders and can source you the right car loan at the right price.