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Guide to Buying a New Car

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Buying a new car is an exciting yet daunting process. You need to research, figure out financing, do the paperwork, and negotiate to get the best deal on your new car. But in the end, all that work will be worth it when you drive your shiny new car around town. 

If you’re still unsure how to get started, we’ve created this new car buying guide to help you. Get on the road sooner with these helpful tips for buying a new car: 

Decide what kind of car you want to buy 

When buying a new car, the first thing you should do is create a criterion. Have a list of needs and wants to narrow down your car options. Ask yourself the following to see what type of car is ideal: 

  • How many passengers? This will determine how large the car should be. An SUV or mid-sized hatch will be great for those driving the whole family. But a small hatchback or sedan will suffice if you’re the only one using it. 
  • Will you be using children’s car seats? You need to check for anchor points in addition to seat numbers. 
  • What type of driving will you do? If you’re mainly driving on highways and suburban streets, you’ll need a two-wheel drive. However, driving off-road would require an all-wheel drive or 4WD depending on the terrain. 
  • How important is fuel economy? The answer to this question can help you decide between a fuel-powered engine, a hybrid, or an electric car. 
  • What safety features matter? Safety features in cars get more advanced every year and you can often buy safety packs to enhance it even further. Cars come with an ANCAP Safety Rating so you can base your decision on that. 
  • How much cargo capacity do you need? This will help you figure out how big and what style of vehicle you need. 
  • Do you need towing capabilities? If you plan on towing a boat, trailer or caravan you will need a powerful engine, probably a V6 or a diesel. 
  • How much space do you have? The size of your garage or parking spot will limit the size of the car you can buy. 

By answering the questions above, you can easily narrow down your car options making the whole new car buying process easier.  

Know how much you can afford 

Look at your finances and see what type of car fits your budget. Usually, buyers take out a car loan when purchasing a new car. This means your budget is based on the amount you can borrow, also known as your “borrowing power”. 

Lenders determine your borrowing power by weighing your monthly living costs against your monthly income and then seeing what you can afford to pay in loan repayments. 

You can find out how much your potential borrowing power is by getting a car loan pre-approval. Obtain finance beforehand or be aware of finance rates available before you visit a dealership. Talk to lending specialists at loans.com.au to learn more about competitive, low-rate car loans

Get pre-approved for a car loan 

Getting pre-approved for a car loan can make budgeting much easier. When you get your pre-approved car loan, you’ll have a better idea of how much you can borrow. Avoid going out of your price range and expedite the whole car buying process when you pre-qualify for a car loan. 

When you get a car loan pre-approval, dealerships and sellers will see you as a serious buyer. This gives you an extra edge during negotiations which could help you get an even better deal. 

Note that a pre-approved loan is only valid for a limited time. You can apply for full approval by providing more supporting documents and updated information. When applying for a car loan pre-approval with loans.com.au, all you need to do is enter a few details on our online application form

Consider all the costs of buying a new car 

The cost of owning a car doesn’t stop at the initial purchase price or regular loan repayments. You have to think about ongoing costs and taxes, as well. Here are some additional costs of running a car: 

  • Registration – To drive a car on public roads it must be registered. The cost of registering a motor vehicle will depend on various factors. Your car’s registration must be paid every year. 
  • Insurance – At a minimum, you will need compulsory third-party insurance. Different types of car insurance cover different things. In general, the more coverage you get, the more it costs. 
  • Maintenance – This includes regular servicing and possible repairs in the future. 
  • Fuel – Petrol is one of the main costs of running a car. The cost will depend upon the size of the engine, its fuel efficiency, and how much you use the vehicle. 

Once you’ve considered all the possible costs, you’ll have a better idea of your overall budget and what type of vehicle you can comfortably afford. 

Shop around for the perfect car 

Always be on the lookout for the best deal. If you time your purchase correctly, you can get bigger discounts or free items for your car. The best times to buy a new car are usually during the end of the financial year or the end of the month.  

You can also get the most out of your purchase by visiting different dealerships. This will help you see what offers are out there and could help you during negotiations. Talking to various salespeople may be more work, but it pays off in the long run. 

Negotiate to get the best deal 

When you’ve found your ideal car, it’s finally time to negotiate. A lot of first-time car buyers feel pressured and let their emotions get the better of them when they’re at the negotiating table. The excitement of buying a new car and goading from the salesperson often makes buyers want to close the deal as quickly as possible. But that’s not always the best course of action.  

When negotiating, it’s best to keep a cool head and act rationally. Research car prices beforehand so you know what the going price is for a certain vehicle. You can also mention quotes you received from other dealerships and ask if they can provide you with a better deal. 

Remember, you can always walk away if you’re not satisfied with the offer. This is the most powerful tool in your arsenal. If you’re unhappy with the deal, don’t waste your time and find a better one. 

Settle your car loan and finalise your purchase 

After you and the dealership have agreed on the price, it’s time to finalise your car purchase. When you apply for a car loan with loans.com.au, you’ll follow this quick process to settlement:  

  • Fill out your application. Everything is done online. You can enter your details yourself or chat with one of our friendly lending specialists over the phone and they can complete your application for you. 
  • Log in to onTrack. After your application is complete, use the onTrack app on your desktop or device to add your documentation such as payslips and bank statements, and track the progress of your application. 
  • Speak to a specialist. You will then have an appointment with one of our lending specialists to organise your preliminary approval of your loan and help you progress through the car loan approval process through to settlement. 
  • Sign purchase documents and loan documents. Check onTrack to receive your final approval, car purchase documents and loan agreement. You must sign these and return them to onTrack to progress to settlement. 
  • Final settlement. After all the documents are signed, your car loan will start up and you’ll get your keys to your brand-new car! 

Once settlement is complete, we will send your login credentials to start managing your payments in the Smart Money App. 

Why get a car loan with loans.com.au

At loans.com.au, we offer one of the most competitive interest rates in Australia. Save thousands of dollars on your car loan and pay it off sooner with loans.com.au’s range of low-rate car finance

When you go with loans.com.au, you’re choosing: 

  • Award-winning car loans packed with incredible features. 
  • A game-changing online model that lets us pass on ultra-low interest rates to our customers. 
  • Simple yet innovative online application process with a state-of-the-art onTrack system. 

Powered by Firstmac, an industry leader for over 40 years, you’re safe knowing that we are a secure and trustworthy lender.

Apply for a car loan today! Or you can talk to our friendly lending specialists for more information about our car loans and which one best suits your needs.

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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