How To Be Financially Smarter When Buying a Car
According to the car salesman we spoke to last week, people typically replace their cars every 3-5 years. This is not surprising as my husband and I tend to do this. Unfortunately this occasionally means we carry over a loss due to depreciation of the vehicle and an outstanding amount on the loan.
Obviously if you are smart with money or can ‘adult’ efficiently; this is not a concern for you. But if you are like us, don’t worry because you can change this cycle and get smarter with money, like we have.
Get smarter with your money when buying a car
You do not have to skimp and save. You can still enjoy your life and your hard earned dollars. It is about being smarter and this does not have to be hard. The money smart website can help provide lots of ways to help you set savings goals and how to achieve them.
Here are some helpful tips:
• Take it for a drive – Before you jump to signing ownership papers, take the car for a test drive (a good tip – some scenarios to test drive are: – under 60km, over 100km, straight roads and windy roads). If you have children, pile them all into the car as well – including their car seats and prams just to make sure it will be the best choice for your family.
• Compare, negotiate and get your deal – Once you’ve decided on the car, then get quotes from several dealerships and compare them against one another. They all want your sale and can always do better than their original quote. Many people don’t think about extras but there is no harm in asking for them to throw in seat covers, car mats, and comprehensive insurance (yes they can do that!).
• Compare differentials – It is also a great idea to check the insurance costs, fuel usage, registration expenses and servicing charges that are associated with the vehicle you intend on purchasing. This will allow you to make the most informed financial decision possible.
Financing the car purchase:
• Savings – This option may take you longer than the ones I mention below but you will own your car outright! This is an achievement in itself. It will also save you money in interest that you would have accrued over the life of a loan.
• Get a loan – There are so many loan options these days that it can be confusing to know where to start. First off – do you get a car loan or a personal loan? To decide on this you must first consider the terms and conditions of each loan, the flexibility, repayment options, interest rates and fees applicable.
You should look for loans with low rates, that are competitive with the market and will help you achieve your financial goals faster. People’s Choice Credit Union can help you get the personal loan that’s right for you, with competitive interest rates, fast pre-approval available and no monthly fees. They also have a cool handy calculator tool that helps you to work out your loan repayments, so you know what the total cost of your loan could be.
Buying a car is a big decision. Just like any large purchase, full consideration of the pros and cons should be taken and not rushed into. Take your time and weigh up each and every aspect from the car itself, any associated costs, through to finances (including the loan details). This will be the difference in you gaining control of your money or just surviving from week to week.
What else should be taken into consideration when buying a car?
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The information above is general advice only and does not take into consideration your personal objectives, financial situation or needs (“your personal circumstances”). Please consider the relevant Disclosure Documents and your personal circumstances before making any decision to purchase the products. Contact us on 13 11 82 with any questions, or visit your nearest branch to talk to a consultant.