How To Choose Which Car To Buy

7 November 2014

Ferrari, Maserati, Lamborghini, Bugatti – which one to choose?  Buying your dream wheels is an exciting experience, no doubt all the more thrilling if you can afford one of these beauties. However, this time around, it’s likely that you’ll have to settle for something a trifle less salubrious and – sigh – more in your price range.

It?s time to swap desire for good old sensibility – for now at least. Ask yourself these fundamental questions:

  • How will you most use your car? For example, city commuting, long-haul driving, ferrying kids around, driving to Uni etc.
  • What type of vehicle best suits your needs? Once you identify how you will use the car, it’s easier to narrow down the type of vehicle that would suit, for instance, 2 or 4-door sedan, hatchback, utility, people mover, sporty convertible, SUV etc.
  • What is your budget? For most people this is the reality check. Just because you can borrow a large amount doesn?t mean you can pay it back. Try our personal loan repayment calculator  and play around with a number of configurations to give you an idea of what repayment level you are comfortable with.

After you’ve worked out these basics – and put a Bugatti on the back burner for now – make a shopping list of loans that will best suit you. The CANSTAR car loans comparison table is a great place to start.

Obviously, a low interest rate is a must-have but don’t forget to factor in fees and charges. Application, or establishment, fees can be $150-odd. Then there are upfront fees, monthly fees, and in the case of vehicles, encumbrance and REVV?s check fees. All these small bits and pieces add up – see our table below.

Average Personal Loan Fees – the ups and downs

Fee 2014 2013 $ Change
Ongoing annual fee $0.00 $0.00 $0.00
Ongoing semi-annual fee $0.00 $0.00 $0.00
Ongoing quarterly fee $0.35 $0.39 -$0.04
Ongoing monthly fee $1.75 $1.71 $0.04
Application/establishment fee $152.16 $130.99 $21.17
Documentation fee $11.02 $9.31 $1.72
Encumbrance/REVVs check fee $6.58 $8.03 -$1.45
Upfront fee $3.78 $4.19 -$0.41
Documentation Release Fee $0.09 $0.00 $0.09
Early repayment penalty fee $34.27 $36.48 -$2.21
Partial repayment penalty fee $0.00 $0.00 $0.00
Missed payment penalty fee $10.69 $11.52 -$0.83

Source: CANSTAR personal loan star ratings, October 2014


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