Buying that Car
Buying a car is one of the biggest purchases you'll ever make. These days, when it comes to cost, it's second only to buying a home. Buying your very first car can often be a nerve-racking experience, and if you're not careful, it can put you in real financial strife.
You have to be realistic when it comes to what you can afford to spend. This will help narrow your choices down to a few specific models, and it can also help you decide whether to go for new, or second hand. You also need to take into account the stamp duty and registration, as well as the ongoing costs of keeping a car on the road.
Saving the whole amount is ideal, but taking out a personal loan for part of it is also an option. Car dealers will often suggest you borrow from their finance company. Don't do it - the interest rates can be as high as 17 percent. You'll find banks and credit unions won't even consider lending you money unless you've been in the same full-time job for at least two years.
Insurance is another big expense and regardless of what car you choose, expect to pay a lot higher-than-average premiums simply because you are young. A cheaper option is to be added to your parent's policy if the insurers allows, but eventually you'll have to bite the bullet and go it alone. The good news is, after a couple of years of safe driving, your premiums should drop reasonably quickly.
Buying a car privately might cost less, but buying from a dealer is the safest way to go. All licensed car dealers have to comply with warranty regulations, and you don't get that with a private sale. Always get an independent inspection by a qualified mechanic. Driving associations like RACV or the NRMA can take care of it. It'll cost about $150, but it's money well spent. Dealers offer a minimum three-month warranty, so make sure the inspection's done prior to the expiry date so that any problems can be fixed by the dealer.
Julian Cavanagh, Director of Aussie Car Loans, says "there are a few things you can do yourself to check the condition of a car. Look for any bumps or mismatched colours and whatever you do, don't buy something that's full of rust. Rust areas are often filled with fibreglass, so wrap a magnet in some cloth and run it over the car to make sure there's metal under the paint. Check the suspension by pushing down on the car. When you let go, the car should move then settle in a balanced position. See that there's plenty of tread on the tyres and no rusty water in the radiator. Hoses should be soft and spongy and it's a good idea to park the car on a clean surface after you've driven it to check for any leaks".
Another good reason to buy from a dealer is to be sure there's no money owing on the car. By law, licensed dealers can only sell cars that are unencumbered. Private buyers should contact the department of transport to check that the car's debt-free. Stolen cars may be repossessed without compensation so always insist on seeing the owner's I.D as well as the car's certificate of registration. A REVS certificate isn't a bad idea either!
Used car prices vary widely, but you can usually negotiate a lower price than the seller is asking. Don't open the bidding first - make the seller give the first price. If you think that it's realistic, then offer something less. If the seller gets close to that price, do the deal. If not, look elsewhere. A great place to look is Aussie Car Search. Here you'll find hundreds of private sellers and car dealers with a wide variety of used vehicles and boats.
If you're buying privately and the seller asks for a deposit, there is no set amount, so leave as little as possible. Make sure you get your deposit back if the car fails the inspection.
If you're buying a new car and you don't have to have the latest model, then "end of year run-out sales" can save you heaps. Don't let pushy salesmen talk you into added extras like rust proofing and window tinting. They don't add anything to the value of the car, but that's where the dealers make most of their profits.
The last week of the month is usually a good time to buy - dealers usually have payments to make then and they'll be keen to meet the monthly sales target. And did you know Monday is the best day to buy a car? The dealer will be feeling either generous or desperate, depending on how his weekend went!
Before buying a new car, contact Aussie Car Loans for huge savings. We have special pre-arranged discounts for most new cars.
