5 Myths to put off as a First Time Car Buyer
Buying your very first car can feel like a daunting task. You worry about what you can afford, whether a used car is worth the money or going to turn out to be a lemon, and then there is the matter of getting finance to buy the car and being able to afford the repayments, insurance, registration and so on.
Let’s look at some handy tips for first-time car buyers so you can avoid the myths and find the very best deal.
1. Start With a Budget in Mind
Whether it’s your first time buying a car or your fiftieth, always begin the car buying process with a budget. You need to work out how much you can afford to spend before you go car shopping. This goes for buying a car outright, or getting car finance or a personal loan.
If you don’t start with a budget, you could over-extend your finances to the point where you actually can’t afford to keep the car you do end up buying.
The kind of car you can buy, and whether it’s new or used, will be determined by your budget.
2. Spend Less if you can
From a financial point of view, the less you end up spending on a car, the more money you will have left over for everything else. Remember, you have to maintain your car mechanically, keep it clean, pay rego and insurance, pay for parking and regularly fill it with fuel.
The purchase price is just part of the overall financial commitment when you buy a car.
In addition to having more money left over to look after and run your car, the better the deal you get on the price, the more cash you’ll have left to get in your car, go places and enjoy life. After all, that’s one of the main reasons for having your own transport is so valuable. It gives you the freedom to do more.
3. Not all Car Dealers are out to Swindle you
Car salespeople, in particular, used car dealers, have always had a sketchy reputation. In the past, sometimes it was deserved by some unscrupulous operators.
These days the car sales industry is very highly regulated, and there are actually advantages to purchasing a second-hand car from a dealer over a private sale. Generally, you’ll pay a little more, but dealers will give you a warranty, help you to organise finance, offer after-sales service, and all dealer cars go through a REVS check so there’s no chance of you buying a car that the previous owner stills owes money on. Or worse, buying a stolen car.
4. Finance, Lease or Opt for a Loan? That is the Question
If you can’t afford to pay cash for a car and buy it outright, you’ll need some sort of car loan option to get the deal done. You have a few options available to you.
One might be to go for a personal loan, but keep in mind that interest rates on personal loans are usually more than double what you would pay on a car loan, whether it be through a bank or another lending institution.
Car finance tends to attract lower interest rates because the vehicle itself acts as collateral. Now you could look to use the car dealer’s preferred vehicle finance company, but you often won’t get the best deal this way. It’s better to seek out and arrange your own lender before you go hunting for a car.
If you run a business you could take the option of leasing a car and writing it off against your tax. Leasing is definitely an option to consider as well, depending on your circumstances.
5. Take Your Time
You may feel in a rush to get behind the wheel of your very first car, but you’re better off taking your time and finding the best car for the very best price.
It’ll be well worth the wait.