Are you planning to buy a new car soon?
It’s a big decision and there is a lot to consider before you decide on your next car. With all the options available, buying a car can be an overwhelming process.
Should you buy new, used or a demo model? How will you pay for the car? Where will you buy it from?
These are all important questions to take into consideration for any car buyer. This article addresses these key questions and other important considerations. After reading this article, you will be able to enter the car buying process with the confidence you’ll be able to find the right car for your needs.
Should you buy new or used?
Australians bought just over one million new cars in 2019. Overall, it’s estimated that over 3 million used cars are sold in Australia every year. Due to the high cost of new cars in Australia, used cars are a popular choice for many people.
But it’s important to remember that there are disadvantages to buying a used car, despite the upfront price savings. It can be difficult to learn the full history of a used vehicle, so it’s not always clear how reliable they will be.
And you’re likely to encounter more issues with the car over the next year or two. The cost of maintaining a used car can add up over the time you own the car.
While new cars are more expensive, they generally come with multi-year warranties to protect you against breakdowns or other issues. The cost of maintenance on a new car is likely to be less than a used car and you will benefit from extra peace of mind.
If you’re looking to keep your upfront costs down but also have the advantages of a new car, a demo model may be a good option. These cars may have been used purely for demonstration in dealerships. They generally have low mileage and are cheaper than buying a car brand new.
Which fuel type?
The type of fuel your car runs on will have long term implications on your car’s running costs. Standard unleaded petrol is the most common fuel type in Australia and generally ranges between $1 to $1.70 per litre.
Although petrol costs in Australia are lower than in some other parts of the world, electric vehicles offer a lower-cost alternative. The cost of charging an electric vehicle works out to be 60-90% cheaper than fuel costs. Each year, more electric and hybrid cars are being added to the Australian market.
While Diesel can still boast impressive MPG, there is always the risk of tax hikes or an outright ban due to high carbon emissions. But it’s also important to consider that while electric vehicle technology is continually improving, it’s still not always ideal for driving Australia’s vast road network due to range issues. And you will also need to spend more to purchase an electric vehicle upfront.
How will you pay for your car?
In Australia roughly 90% of car sales are made through a financing agreement, meaning buyers make monthly repayments until the car loan is paid off. Whether you choose to finance your car will depend on your financial circumstances.
If you’re planning on financing a new or used car from a dealership, it’s important to remember that there are potentially better options available than the finance offered by the dealership. It’s worthwhile speaking to a finance broker to find out how much you can borrow and get pre-approved on your loan before heading to the dealership.
Purchasing your car with cash will help you save money in the long run. However, buying in cash can also restrict the type and quality of the car you can afford. This means you might have to settle for a less reliable or less efficient car.
Before buying your car, learn the strategies to get the best deal on a new car. This will save you money, whether you choose to pay cash or finance.
Speak to a Credit One broker to find the best rate you can get on car finance.
What will you need in the future?
For most people, buying a car is a long term investment. On average, people will keep a car for roughly six years. That means you need to consider how your needs will evolve over the coming years.
If you’re expecting your family to grow in the near future or if you could be moving from the city to a regional location, your requirements are going to change. If you intend to hold onto your car for multiple years, take some time to consider any major lifestyle changes that could occur in the coming years.
A few questions you should ask yourself…
- Are you likely to have kids within the next few years?
- Do you have young children who will grow and need more leg room in the future?
- Will you be moving to a different location?
- Are you likely to change jobs and how will that affect your car usage?
- Will you be using your car for travel in the future?
It may be worth buying a car that’s slightly more adaptable for your needs just in case, rather than locking yourself into something that won’t meet your needs in the future.
If you expect to be doing a lot of travelling in the near future or if you’re expecting new additions to your family, you will need a vehicle that allows plenty of space. The space and versatility of SUV vehicles has been a key driver of their increasing popularity in the past decade.
What are the maintenance costs?
Car maintenance costs can be a significant expense to consider in the long term and something that needs to be considered before you make your purchase.
Servicing and maintenance costs on imported or rare cars can be expensive, as fewer parts are available in Australia for these cars. Similarly, newer cars tend to have fewer maintenance issues in the long run. However, all these risks can be minimised by taking out warranties or insurance, which is always recommended regardless of what car you’re buying.
The decision on which car to buy shouldn’t be taken lightly. Take the time to consider all your own needs and requirements so you can make the best decision for your circumstances. Use the ideas above to guide your decision making and ensure you make a choice you will be happy with. Visit our complete Car Buyers Guide for more tips on buying your next car.
If you’re looking for further assistance in your car buying journey, contact our expert team who can help you find your dream car on 1300 273 348.