The moment has arrived where you’re ready to buy your first car. It’s a rite of passage. Even if you can only afford something that looks like it’s been salvaged from your local scrap yard, your first car is going to open the door to a whole new level of freedom and independence.
Depending on how you handle this big moment, it’s possibly also going to open the door to a long term diet of Mie Goreng noodles, big repair and maintenance bills and that wistful feeling you’ll get when you see the car you actually should have bought driving by.
Any way you look at it, buying your first car isn’t a moment you should rush, and definitely not something you should do before reading these tips.
Get fairer car insurance. Based on how you drive
Figure out what you can afford
This means determining a monthly budget to cover all costs associated with your new car.
When presented with a shiny car on a sales floor it’s easy to forget that this budget won’t just cover monthly repayments, but will also need to cover insurance, fuel and maintenance. Take those into consideration and you’ll start taking important things like fuel consumption, pricing of spare parts and vehicle reliability into account.
If you’re buying used, get a warranty
Many first time car-buyers are forced to buy used cars to stay within budget. However, there are around 10,000 moving parts in the average car, and it’s the rule rather than the exception for these parts to become worn or uncoupled.
Unless you’re covered by a warranty you can quickly find yourself crushed by large and unexpected repair and maintenance costs. Consider a warranty a non-negotiable part of the cost of a used car.
If you’re buying new, be wary of add-ons
Auto-makers make their profit from the add-ons they offer on new cars. These range from improved interior finishes, to structural modifications and engine upgrades. A couple of these can enhance your car and driving experience relatively inexpensively. However, the costs can quickly add up, leaving you paying much more than you budgeted for.
Also keep in mind that add-ons frequently have little impact on the re-sale value of a car.
It’s a buyers’ market
Whether you’re buying new or used there are going to be dozens of dealers or franchises who all want to sell you the same car model. Use this to your advantage. Get a price on the car that you want from one dealer and then take it to another dealer and see if they can beat it. Get dealerships and franchises to compete for your business and you’re guaranteed to get a better price and package on your first car.
Test drive the car
While most people would refuse to buy a pair of shoes without trying them on first, it’s not unusual for people to buy a car without taking it for a test drive. This is because people are easily sold on a car’s appearance or reputation – neither of which tell you whether the car is a good personal fit for you, or how it handles on the road.
Take your car for a test drive – you don’t want to find out about the annoying cabin rattle or tooth-loosening sports suspension once you’re stuck with it.
Think through your financing
Unless you’re a millionaire, buying a car off your parents, or purchasing an old beater that’s just about in running order, you’re probably not paying cash for your first car. This means you’re going to be getting into debt and paying your car off in instalments over several years. The rule of thumb here is that any financing options that drive down instalment costs will increase the overall cost of the car in the long run. Decide if that’s a trade-off you want to make before settling for the lowest possible instalment on the car you buy.
Beware of insurance costs
First time car buyers are the most discriminated-against people in the automotive industry.
Fortunately usage-based insurance products are entering the Australian market. These monitor and score your driving in real time, then calculate your premiums accordingly and can generate huge insurance savings.