Buying a new car can be an expensive, stressful… exhilarating experience. The payoff can be a terrific vehicle that will last many years, but poor choices could mean a massive waste of money. Pay close attention to our car buying checklist when you start searching for a new set of wheels.
Ideally, you would pay off your car in full by the time you’ve been handed the keys, but sometimes your financial situation simply won’t allow this. If you plan to take out a car loan, get the best deal possible by checking out our car loans hints and tips. Once you have secured your loan, make extra payments whenever possible in order to reduce interest and become debt-free sooner rather than later.
Determine running costs
‘Determine running costs’ means bearing in mind how much money your vehicle will cost to run every week before buying it. The biggest ongoing cost of your vehicle can easily be fuel, so do some research online to determine if your new car will be a gas-guzzler, or a moderate cruiser.
There are other things to take into consideration however, such as maintenance costs (a car usually needs to be serviced every 10 or 15,000 kilometres depending on the make and model). Some cars have costlier parts than others, and this may come back to haunt you later in the car’s life.
Insurance, roadworthy and registration
Whether you are looking into used cars, or something shiny new – you’ll be required to pay several fees before you can take your new wheels out onto the road:
- Government stamp duty (calculated at a percentage of the buying price of the car)
- Registration (determined by a number of factors, such as engine type)
- Roadworthy certificate (if a current one has not been issued)
- Dealer delivery charges (administration, shipping, and other ancillary costs)
- Goods and services tax (GST)
- Luxury car tax (if your new car can be classed as a luxury car)
Compulsory third party insurance is just like it sounds: compulsory in order to legally operate your vehicle. This insurance is charged to you in different ways depending on which state or territory you live in, but can be rolled into your vehicle registration fees, license fees or through other channels. You can also take out a third party fire and theft policy to make sure you won’t have to pay for any damage you inflict on other cars and properties.
A comprehensive car insurance policy is best though, as it ensures you won’t have to pay repair costs to your own vehicle in an accident you’re at fault in, one where the other party cannot pay for your car repairs, or in the event of a natural disaster.
The costs of car insurance will vary based on a rating your insurer has given you based on age, accident history, make and model of car, modifications to said car, garaging and more. You should also look at the differences between insuring your car at market value or agreed value.
Potential resale value
You should understand from the get-go that most cars depreciate quickly due to the development of newer models and the wear down of your vehicle over time.
In particular, some cars depreciate slower than others depending on how well they have looked after, and what kind of vehicle they are. Several websites can tell you how much your car would sell for based on model, year and kilometres driven.