Buying a new car: what you need to know.

Buying a new car can be financially daunting. Remember these essential tips before turning the key on that deal.

1. Put your needs first

Think about what matters to you the most - what do you want in a car? Economy? Passenger room? Easy parking? If you bought a 4WD, would you spend more time racing over sand dunes, or worrying about fuel consumption on your way to work?

Make a list of all the features you need, followed by a second list of features you'd like to have. When you're browsing the car yards, don't get talked into flashy features unless the car meets all of the needs you've listed first.

2. Stay safe when buying a new car

It’s tempting to think new cars are similarly safe, but in a crisis, the differences can mean life or death.

Check the car’s ANCAP safety rating - this tells you how safe the vehicle will be in a crash, both for people inside and outside. Insurance companies use this as their guide when they set your premiums, so a higher safety rating may mean paying less on insurance.

3. Servicing: a key consideration

Popular cars are easy to find parts for — which means convenient, cheaper servicing and lower insurance rates. Rare cars aren’t so fortunate. You can always chat with your local mechanic to get their input on the best car makes and models.

If you know a great mechanic for the exotic car of your dreams, by all means, go for it. Otherwise, make sure you budget for those extra repair costs.

4. Prepare to shop when the time is right

When it comes to visiting the dealership, some days are better than others. Try going at the end of the month, as staff may be looking to meet monthly sale quotas and therefore have an incentive to move their stock.

The end of financial year is also a good time to look for sales, as car models are about to become officially a year older and therefore less in-demand. Likewise, many models are upgraded every three or four years or completely overhauled after about six years. If you find a model that looks due to be replaced by a newer one whose features you don’t need, you may receive a good deal for it.

Mondays or midweek during work hours can be good times to car shop, as can right before New Year’s or other holidays. The dealership will usually be quieter during these times, which means sales staff will have more time to answer your questions.

5. Stay cool or it may cost you

It’s a cliché of relationships that power goes to the one who cares the least. What may not be good for marriages, can work for you at the dealership.

Don’t talk too much or act too eager. Let the dealer do the work of selling you on the car. You should always be prepared to walk away — leave your number if you do, in case they are willing to make a new offer.

6. Know what you’re negotiating for

You have to be credible to be an effective negotiator. Call around to find a lower price offered by a competing dealer as the dealer is more likely to match that than a figure you named on a whim.

Ultimately, it’s about getting as much information as you can and knowing what you are willing to pay.

7. Get out while you can

All cars can be upgraded with sound systems, fancy wheels and more. Don’t blow your good work on unwanted extras at the last moment. Check which ones are likely to be on offer and think about whether you would want them. According to Finder AU and Choice Magazine, here are some extras that may be worthwhile:

• A rear view camera for parking if the car is large or has poor rear visibility.
• Extra airbags if you frequently carry passengers.

And some that are worth avoiding:

• A longer warranty period. Typically overpriced and subject to strict conditions.
• Paying for future car maintenance in advance. Also often expensive and subject to strict conditions.
• Alarms. In Australia, new cars have engine immobilisers which make alarms obsolete.
• Rust proofing. Cars are rust proofed by the manufacturer, so unless you live close to the beach, extra rustproofing is not worth it.

Keep a cool head and always do your research before you’re swayed.

8. Know the real cost

Cars come with on-road costs that, unlike GST and luxury car tax, may not be included in the retail price. These are mandatory:

• Registration
• CTP Insurance
• Stamp duty

If you’ve reached your budget before you’ve factored these in, you may want to look for a cheaper model.

Another common cost is the “dealer delivery charge”. These are often inflated to increase profits, so be weary and prepared to negotiate.

9. Make sure you save on financing your vehicle

After all that work, it’s easy to go with your dealership’s in-house financing or your usual bank or credit union — although it may not be the best deal for you.

The dealer may be anxious for you to sign, but you don’t have to be. Take a breath. Remember, financing is like any other product: shopping around is a big advantage. Look for financial institutions you can trust who won’t add in surprise costs or penalties down the line. Compare their rates and educate yourself on basic financing terms so you know what you will be facing.

You may end up driving away very happy you did your homework.

---

Any advice given is of a general nature only and does not take into consideration your personal circumstances. Please consider the appropriateness of the advice before acting.

Sources: https://www.finder.com.au & https://www.choice.com.au