Buying a car is exciting but it can also be time-consuming and stressful. Buying privately versus through a dealer and arranging finance all come with their own challenges. If you’re thinking about buying a new or second-hand car or trading in your current car, our brokers have put together a few tips that might help.
- Determine your budget
Before you start looking for a car, calculate how much you can spend. With a quick phone consultation, our team can assist in calculating how much you can borrow and will arrange pre-approval for your finance.
When deciding how much to spend, in addition to your loan repayments, make sure you also take into consideration insurance, registration and maintenance costs. - Check your credit score
Your credit score can affect your ability to borrow, your interest rate and loan terms so you might like to check your credit score prior to applying for a car loan. Our brokers can help with this or you can use free sites such as My Credit File.
Remember that making loan enquiries can affect your credit score so the more times you call a bank to make a loan enquiry or submit an online form, it may appear on your credit file which may have a negative impact on your credit score. Let our brokers look into loan options for you to avoid this.
Having good financial habits will help your credit score. Read our article to find out more. - Do your research
Do your research into different makes and models of cars and look at things like fuel efficiency, safety features, reliability, resale value and depreciation rates. Read online reviews from reliable sources and talk to your friends, family and colleagues to get first hand opinions about different vehicle types. Consider whether you want a new or a used car and look at the warranties available on both options. - Get a vehicle history report and inspection
If you’re buying a used car, obtain a vehicle history report using the vehicle identification number (VIN) to check for any accidents, title issues or other red flags. Check its logbooks and service history and have the vehicle inspected by a trusted mechanic. - Take a test drive
Take the car for a thorough test drive to assess its comfort, handling and performance. - Get a variety of finance options
If you’re buying through a dealer, the dealer will usually refer you to the dealership’s finance company but don’t presume this is the best option for you.
Our brokers can provide options from a variety of lenders so you can look at the interest rates, terms, fees and loan types and decide what is best for you.
See us before you sign a privacy act with your dealer as we have a quoting system that can determine rates and repayments without affecting your credit score. - Avoid making rushed decisions
It’s easy to get wrapped up in the excitement of getting a new car. Take some time to consider your decision and sleep on it. Don’t be pressured to make quick decisions on the spot. - Check insurance costs
Get quotes on insurance for the car you’re interested in buying. Premiums can vary significantly based on the make and model of the vehicle. Our GPC Insurance division can assist and can make sure you have insurance ready to go once you drive away with your new car. - Be mindful of dealer add-ons
Consider whether you need all the add-ons a dealer offers you. You don’t need to purchase them through the dealer and can shop around for them or take them up down the track. - Prepare the vendor if buying privately
If you’re obtaining finance to buy a car privately, the lender will ask for a PPSR (Personal Property Securities Register) search. A PPSR search protects you as it ensures the car is not stolen or written off and that it is debt free. The seller may need to provide documentation to assist with the search and finance settlement including a registration certificate, bank statement, payout letter (if relevant), driver’s license, and a range of photos of the car. This can generally be done on-line and is a quick and easy process.
Buying a car is a significant financial decision so it pays to do your homework on the vehicle you’re purchasing as well as the finance you take out. Take your time, consider all your options, including finance options, and don’t rush into a purchase.
For help with finance for your next car purchase, contact our expert asset broking team.