Buying a new car is not only exciting, but can also become quite daunting.
Whether you're a seasoned professional who replaces your car before the warranty ends, or you prefer to see the life of your car through, these quick tips can help you along in the research and buying process and could even save you some time and money along the way.
1. Do the research
Researching the car you want is probably a given. You know the make and model you want and probably the colour as well. However before you get too attached to the idea of a particular car it's important to research all aspects of owning the car other than its latest features.
Be sure to read reviews and articles on the car you have your eye on. What is the fuel economy like? Are there any flaws or issues other owners or car experts have noticed? Are parts easy to access if anything needs replacing? How much will insurance cost, particularly if it's a high powered or luxury vehicle?
Knowing these key details could great impact how you feel about the car, whether it's right for you, and if maintaining it long term is out of your price range.
2. Consider safety
Something you may not think of when buying a car is how safe it is. We naturally assume that if it's on the market and other people are buying it, surely it must be safe. As you start to dive into your research, you might come across ANCAP safety ratings. These ratings determine the level of safety a vehicle provides in the event of an accident, as well as its ability to avoid or reduce the effects of a crash through latest technology.
The safety ratings are established through a series of internationally recognised and independent tests including crash testing, active collision avoidance assessments and the effectiveness of on-board safety features.
How safe the car is might not feel like a leading factor in your decision to buy, but there can be a significant difference between various makes and models once you start to look into it. Not surprisingly, the ANCAP safety rating for your car can also affect the cost of car insurance. If you want cost effective insurance and a safe vehicle, aim to buy a car with no less than a 4 star rating.
3. Don't take the first offer
Your research shouldn't stop at the computer. When you're ready to speak to a sales person visit at least three different dealerships to get the best offer. Ask for a written quote from each dealer and see if they can match a competitor's price.
4. Over focusing on the car price
One of the biggest things that determines what car we buy is the price. It's a major expense for many people, no matter if it's your first car or your fifth.
When we think of price we usually only think of the initial price tag on the car which can soon lead to haggling over a few hundred dollars with the dealership to ensure we get the best deal for our money.
However, what many people forget to consider is the cost of financing.
Most people don't have the money upfront to purchase a new car, but if your deposit isn't big enough or you haven't shopped around for finance, the $700 you negotiated off the price may feel like a win now, but a high interest rate could end up costing you more over the life of your term.
Instead, aim to save a minimum of 20% for a deposit. This will keep your repayments down, making them much more manageable over the course of loan. Once you're ready to buy, shop around for finance so you're not making an impulse decision at the dealership.
If you're in the market for a new or used car, find out how much you can borrow with our award winning car loan.
5. Know the value of your trade in
Whether you sell your old car privately or trade it in can depend on how much time you have, how quickly you need the money and whether you want to meet with people.
Selling your car privately is usually going to be the most profitable, but it's also the most time consuming. If you're in a rush or you don't want the hassle of a private sale, then you must be prepared for the dealer to offer you a lower price than market value. The low trade in price is not only for the convenience factor, but also ensures the dealer will make a profit when reselling and covers any additional expenses such as advertising and upkeep.
If you do plan on trading your car in, search online for an approximate trade-in value. This will give you some bargaining power to ensure you're still getting a fair trade-in price.
Conversely, if you decide to purchase your 'new' car from a private seller, be sure to have the vehicle inspected for mechanical or structural issues and always search the Personal Property Securities Register (PPSR) to check if the car you're buying is debt free, stolen or written off.
6. Nail your negotiating skills
Everyone negotiates differently and you might already have an idea of what approach works best for you. However if you're new to car buying or want to brush up your skills you can't go past the 'if' and 'then' technique. It's a method that simply poses a question to the seller, putting the ball in their court to make a decision or proposal back to you. An example of this could be "If you'll consider coming down to this price, then I will pay a deposit today".
While this question generally works and proves you are a serious buyer, if you don't receive the offer you're hoping for, then consider whether it's a good price regardless or if you can get a better deal elsewhere.
When it comes to negotiating, there are a few simple tips to consider:
- Keep your expectations in line with your research. You should already have a budget in mind of what you're willing to pay. Haggling with a dealer on a fair price or an already discounted car may not work to your advantage.
- If you do think you can do better elsewhere then don't be afraid to walk away. If you do, be sure to leave your contact details in case the dealer can come back to you with another offer.
- Be conscious of when the sale periods are. You're more likely to get a better deal, and if the dealer is close to hitting their targets, they may be willing to negotiate more in order to reach their commission goals.
- Always be polite. Buying a car can come with a lot of pressure, but at the end of the day if you're haggling comes across as rude or pushy, the dealer may decide it's not worth the trouble. Good manners can go a long way and the friendlier you are the more strings they may be willing to pull for you.
Auswide Bank Ltd Australian Credit Licence 239686 is the credit issuer. This is not an offer to lend – approval is subject to credit assessment criteria. Terms, conditions, fees and charges apply – full details on application. This information provides general advice only. We do not provide advice about this product based on any consideration of your personal objectives, needs or circumstances.
Published: Tuesday, 05 Apr 2022