Buying a car is a pretty big deal for most of us, especially as we work hard to pay for it. In this blog, we’re going to give you 7 tips to buying a car.
Tip 1 – Budget
Consider the following:
- How much do you want to spend?
- Are you considering finance options?
- What will it cost per month?
- Am I after a new or used vehicle?
- Are there any manufacturer campaigns utilising finance, for example, deals subsidised by factory, like a Nissan 1% campaign, or Toyota’s low rate campaigns etc.
Tip 2 – Funding or finance
There are lots of very competitive options when it comes to financing a new vehicle. But be careful not to get too caught up with rate campaigns. Many manufacturers or dealers will try to get you to focus on low rates which are subsidised, while potentially selling the car at a higher price to recoup subvention costs.
Do your research, check what’s available on the market. If unsure, engage a car broker who specialises in asset and car finance.
Most lenders in the market are generally similar, however, you will find that some do offer better rates that you may not be aware of if you don’t consult an expert in the field.
Dealers can potentially offer competitive finance deals in-house. But be sure to look for all fees and charges included in the transaction.
Tip 3 – Car and model
Which car to choose? What model? What variant? Sometimes we just don’t know as there are so many options on the market, so many new releases constantly.
What has the best safety, economy, performance, reliability, features and luxuries and what will get you the best resale value when the time comes to sell your car?
The average buyer will spend over 11 hours researching their car purchase on over 18 different sites.
Consider talking to a car broker to help steer you in the right direction and save you many hours of research.
Tip 4 – What’s my trade-in worth?
We often see a lot of clients getting very caught up with the value of their trade-in. Most people will go to sites like Carsales or Carsguide or Gumtree. They use cars there as an indicator of what their car is worth. The section you don’t see is how long it has been listed for. More important from what is listed, is what is selling?
Trade-in at dealership will give you lowest return for the most convenience.
If you are going to trade to the dealer, do some preparation before you go. Have the car cleaned. Presenting a tidy car. Get rid of any mess, run it through a car wash for a good return on investment.
For most return and a convenient option, consider selling your car through a car broker. If your car is the right car for them to list, they may potentially get you thousands above what a dealer will give you as a trade-in.
Tip 5 – Back to the car: Arranging an inspection
It is preferred to buy the vehicle via a reputable source for a peace of mind. Buying a new car is very straight forward, your new vehicle comes from a dealer and has a factory warranty. However, make sure to check the dealer’s reviews. All the cars will be identical. The price, service and convenience are what makes the difference.
Pre-owned vehicle; it’s less about the seller and more about the car itself.
- What inspections have been carried out?
- What warranty do you get?
- Is there a car history inspection or PPSR available?
When looking for a used vehicle via a private seller make sure you do all the checks. Car history or PPSR is a must. This will tell you if the car has been previously written off, stolen or encumbered.
If the vehicle is encumbered, do not stress. Just make sure you see the pay out letter that matches the vehicle.
Make sure the car comes with a roadworthy certificate. If the car is outside the factory warranty, get an RACQ or independent mechanical inspection done.
Tip 6 – Price negotiation
Ok, so you know that you like the car. Now. here comes the fun part that most buyers dread.
- How much can they move on price?
- What is the best price and more importantly, what are they willing to sell it for?
- What is my trade-in worth?
- What will it cost me per week?
- What is the interest rate?
All very important points of negotiation.
More and more businesses are starting to apply a fixed price model. Not to say there isn’t room to negotiate if they are willing. It usually comes down to supply and demand. If it’s a new car, a dealer is more likely to negotiate based on the fact that they can easily replace the vehicle if it’s a high volume mover like the Toyota Corolla, Hyundai i30, Mazda 3, etc.
The dealer will be less likely to be as flexible on a hard to get vehicle such as a new release car or a short supply vehicle like a new Range Rover Velar or Landcruiser Sahara, etc.
Pre-owned vehicle:
Dealers are all aware of how competitive the market is. Many will use software like Livemarket to check the pricing of their vehicle and make sure they are well priced. Not to say that they won’t negotiate, but at times they can be unwilling to do so because of low margins and having a unique vehicle that they can sell to next prospect at the listed price.
You may, however, be able to negotiate on any accessories or warranties, for example the extended warranty or car care products to potentially save you a huge part of the margin.
As far as trade-in and finance; please refer to tips 2 & 4
Tip 7 – Payment and paperwork
Buying through a dealer can often nullify a lot of the little concerns such as the paperwork being done properly. However, due to larger overheads and warranty provisions, they usually will also attract a higher premium. They are businesses like any other.
If buying from a private seller, make sure all the registration and service history paperwork is in order, and the details match the seller. Also, make sure you have original versions of everything – never photocopies.
- If you’re making a payment or even just a deposit, get a receipt and make sure the seller’s full details are on it.
Something to keep in mind regarding additional costs when purchasing a new car from a private seller – you will need to also allow for stamp duty & transfer costs of the vehicle. This can equate to between 3-4% of vehicle value.
It’s also recommended to arrange insurance before you drive away.
Did our tips to buying a car help you?
If all seems too much and you don’t have the time to deal with it all, then why not consider a full-service car broker like eCarz.com.au to assist you with the entire process?
We handle everything from finding the new car, selling the old one, finance, insurance, and extended warranty – all in one place – with just one phone call to handle it all for you, call 1300 378 387 or contact us today to get started with buying, selling and financing cars the smart way.