Top tips for buying a new car

Buying a new car is a big financial commitment, no matter whether you're purchasing it outright or with the help of a car loan. With so many makes and models out there, knowing which one to choose isn't always easy.

Here are some top tips for narrowing down your options and hopefully coming away with a vehicle that ticks all the right boxes.

1. Safety first

A major consideration when buying a car should be how safe it is. The good news is that ANCAP safety ratings have been devised to make it easier to separate the best from the rest.

The ANCAP system works using a rating system of one to five stars. The more stars a car has been awarded, the safer it will be. Figures show that you're twice as likely to be seriously injured in a collision while travelling in a three-star rated car as one with five stars. ANCAP has tested thousands of cars that are available in Australia and New Zealand. You can even find out how safe the car is your looking to purchase.

2. Ongoing Maintenance

Ongoing maintenance issues can become very expensive very quickly. The newer the car, the less likely you will be hit with unexpected expenses. New car warranty's can range from 3 to 10 years depending on the make and model. Check that this warranty remains with the car when it is sold. Another tip is to stick to the major car brands. For instance, Toyota is a car manufacture that is synonymous with reliability. In addition, buying from a dealership comes with a minimum of 3 months warranty.

3. Fuel efficiency

Another factor you'll need to think carefully about is how much it costs to run your car. While you might not be paying a high price at the outset, you could soon make up for it at the petrol pump. With fuel prices constantly increasing, a hybrid or electric vehicle may be an option to consider. Each state government has different incentives when purchasing an EV. These incentives can include discounted or even an exemption on vehicle registration as well as zero emission vehicle rebates on the purchase price.

4. Weigh up the cost of insurance

Car insurance is something you will also need to factor into your calculations, especially as costs have generally been rising over recent years.

The Insurance Council of Australia reveals that the average premium has steadily increased since the start of the new millennium - and it's a trend that is unlikely to be reversed any time soon. If you buy a particularly large car, or one with a less-than-impressive safety record, you could find yourself paying more than other motorists.

5. Get the right finance in place when buying a new car

Before you even start browsing new cars, you'll need to make sure you have the necessary funds in place. Car finance can help spread the cost of your vehicle, so you can enjoy it as soon as possible.

Our easy to use car loan calculator can help determine if the car you have in mind will fit into your budget. Input the amount that you want to borrow. This can be the full purchase price or you can contribute a deposit. Next you will need to determine how long you want to have the loan. The longer the loan term, the lower the loan repayment. Lastly you need to estimate your interest rate. Lenders determine your interest rate on your risk profile. This is made up of your credit file and your individual circumstances, such as employment and residential history. For example, a home owner who has had previous loan before working full time will be offered a lower interest rate than a renter working casually.

A pre-approval car loan can be especially helpful if you are looking to purchase privately. Being pre-approved allows you to shop with the confidence that your funds are sorted. Once you find the right car you can pay a deposit to hold the car until funding is finalised.

Finance options when buying a new car

There are 3 main finance options available for purchasing a car. Each of these options can be used to purchased a new or used car. You also have the flexibility of purchasing from a private seller or a dealership. Our experienced AAA Finance brokers can advise on which option will be best for your circumstances.

1. Secured Car Loan

This is the most popular finance option for wage earners. A secured car loan uses the car as security and therefore attracts a very competitive interest rate. Identification, in the form of drivers licence and Medicare card, as well as 2 payslips, as proof of income, are all that is required.

2. Business Car Loan with Low Doc Car Finance option

If you have an ABN and you will be using the car for over 50% business use than a business car loan will be your best option. There are a number of advantages when buying a new car for business use. Firstly, you can claim the GST on the purchase price as well as depreciate the car. You can also claim the interest paid on the car loan. Each of these can help reduce your tax bill. A low doc car loan simplifies the finance process. This option negates the need for up-to-date financials and extensive paperwork.

3. Personal Loan

A personal loan is mainly used by those wanting to buy something out of the ordinary. Whether its a classic car, a car with major modifications or an older car, then a personal loan may be your only option. Because there is no 'security' against the loan this option does attract a slightly higher interest rate.

Why choose AAA Finance?

AAA Finance will save you both time and money. Our finance team has a depth of knowledge and experience to ensure the best outcome for your unique situation.

1. Over 40 different lenders. We have a lender to suit your individual circumstances.
2. Quick loan approvals. Most loans are approved within 24 hours.
3. Easy over-the-phone loan application.
4. AAA Customer service.
5. Experienced professional finance broker team.

Contact us today to drive away!