This guide breaks the process down into 7 simple steps that will give you an idea of what do when buying a new car, from start to finish. Always seek professional financial advice before taking a car loan.
Step 1. Do your research
There are many things that you should consider when buying a new car.
What will you mostly be using it for?
How much space do you need?
What is your budget?
What styles and makes do you like?
Asking yourself these questions will help you narrow down your options to a few favourites that are in your price range. Once you’ve done that, make sure you check the safety rating and read some reviews. Also check out some customer satisfaction surveys. Then it’s time to head to the showrooms.
Step 2. Check the Inside and Outside
Make sure you have a good look at the inside and outside. Check that there is enough space for everything you need it for, especially if you have kids (make sure the child seats will fit across the back and that the pram will fit in the boot!) or if you’re a tradie (for tools and trinkets).
You also need to like how it looks and feels since you’re going to be the one driving it. Make sure you’re happy with the styling and the driving position is adjustable and comfortable for you. And check out what makes us happy when we buy a car.
Step 3. Check the Inclusions
New cars these days have plenty of gadgets that improve safety and the driving experience overall, but you’ll need to find out which ones are included and which ones cost extra. Things like touchscreen infotainment systems, sat-nav, rear-view parking assist cameras and blind spot monitoring are all useful features that may or may come as standard.
If not all of the features you want are included, consider how much you’re willing to spend for the extra bells and whistles. Some extras might be essential while others are less important, so make sure you only pay for the things you need.
Step 4. Test Drive
Test driving a car is the best way to get a feel for it and find out if it suits your needs. It’s also very useful to read car reviews before you go for a test drive, that way you’ll be aware of any potential problem or downsides with the car, and they won’t get overlooked in the excitement.
It’s best to take the car around different road types and speed limits, including going up to 100km/h. That way you’ll get a good idea about its overall performance, including acceleration, cornering, low-speed manoeuvering and turning circle.
Step 5. Do a Deal
Negotiating the price of the car can be the most difficult part of the process for some people, especially if you don’t have much experience with it. Don’t be afraid to drive down the price; car dealers expect that haggling will be a part of the buying process for most buyers.
Some questions you should consider when negotiating are:
- How does the price compare to other cars you’ve test driven?
- What features are included as standard?
- Are on-road costs included?
- Do they offer a long warranty period and roadside assistance?
While you’re negotiating the price of the car, car loan calculators can also be a useful tool for budgeting for your car loan. They allow you to input the price of your new car and repayment options such as loan term and interest rate. The calculator will then show you how much your repayments will be as well as the total cost of the loan.
Step 6. Sign the Paperwork
Once you’ve struck a deal with the salesperson, the next step is signing the paperwork and finding finance that suits your needs. Always read the full terms and conditions of the contract of sale, warranty, and any finance contracts.
It is also important to consider all your finance options, not just the financing offered by the dealership. Car dealers are experts on cars, but that doesn’t mean that they’re experts on finance. There are often fewer loan options if you choose finance from the dealership, and it may not suit your needs as well other finance options.
That’s why you should identify the loan features that are important to you. That way your loan will have everything you need and you won’t pay for anything you don’t need. Some optional car loan features to consider are:
- Early payout– Some loans do not allow you to pay off the loan early, or will charge extra fees for doing so. You may want the option to pay off your loan early if your circumstances change in the future.
- Secured or unsecured– Car loans that use the car as security for the loan often have a lower interest rate than unsecured loans; however they are often less flexible as well. Choosing a secured or unsecured loan will often be a matter of preference.
- GAP insurance– This covers the difference between the value of the car, which is covered by regular insurance, and the amount still owing on the car loan.
Step 7. Drive Away
Once you’ve got finance that suits your needs, the last thing you need to do talk to your insurer to make sure you’re covered from the moment you take possession of your new car. After that, you’re ready to drive away.