Top 6 Tips for Choosing Your Next Car

Whether you’ve decided to upgrade from your current ride or you’re taking the plunge to buy your first car, there are a number of things that you should do to put yourself in a position to get the best car that’s right for you and your circumstances.  The following tips should help guide your decision-making process:

1. Assess your needs

Before you even start thinking about the make or model of a vehicle, take the time to sit down and think about what you require from your vehicle, both now and over the longer term. You may want something specific for now but if your circumstances change, the vehicle may not be suitable in the future.  And that’s fine provided that you are aware that this is a short-term requirement and so you set your budget and ownership expectations accordingly.  Once you know what your key requirements for the vehicle and how long you are prepared to have this vehicle for, then you can start reviewing the various brand of vehicles available to you.

2. Set your budget

The first step in your new vehicle search should always be to set yourself a realistic budget.  It is important to remember that the budget you create should cover more than just the purchase price of the vehicle.  Allowances need to be made for the type of insurance cover you will require, any government charges or duties that need to be paid to transfer the vehicle into your name, whether additional work may be required in the immediate short-term (such as tyre replacements, vehicle re-registration or scheduled maintenance if you are purchasing a second-hand vehicle).  By defining these amounts in advance, there is less chance that you may overlook something or spend too much on the purchase of the vehicle and then find out you don’t have the necessary funds to cover the other expenses.

3. Decide whether to finance or purchase with your own funds

When purchasing your next vehicle, there are typically two choices available to you.  You can purchase the vehicle using your own saved funds or you may decide to purchase the vehicle using a finance agreement.  Both methods have their benefits and disadvantages.

If you decide to purchase the vehicle using saved funds, you won’t have to pay additional interest charges on the total amount.  You will also have the flexibility to sell the vehicle whenever you want as there is no encumbrance on the vehicle.  The downside might be that the amount of funds you have saved up aren’t enough to buy the vehicle of your choice and you may end up settling for an older model or something that does not have all of the options and features that you require.  If you are in business and you are using your working capital to purchase the vehicle, you may be impacting on the ability of your business to grow by reducing the working capital for a depreciating asset.

If you decide that the finance option works best for you, then inevitably you will have access to a greater sum or money allowing you to purchase a better or newer vehicle. If you use your vehicle for business, then a portion of your financing costs would also be tax deductible.  However, the financing option does not have the same flexibility as buying the vehicle outright.  The financier will typically provide the finance over a fixed period and may require additional charges should you wish to terminate the agreement earlier.  Financiers also charge an interest component for the money that you borrow so that the cost of the vehicle becomes much more than the purchase price of the vehicle itself.

4. Consider the costs of ownership

As with creating a budget for the purchase of the vehicle, it is equally important to understand what the ongoing costs of operating a particular vehicle will be. Every vehicle has its own specific ongoing maintenance requirements. For example, some vehicles need to be serviced every 10,000 kilometres whilst others only need to be serviced at 15,000 or 25,000 kilometre intervals.  Vehicles have different tyre sizes, operate on different types of fuel, require different lubricants and the list goes on. It is best to have a clear understanding of these key expenditure items so that you can accurately estimate what the total cost of ownership of your chosen vehicle might be.

Did you know?   A Novate One salary packaged vehicle will give you a tax deduction for the cost of finance, depreciation and running costs on a personal use car.

5. Test drive the vehicle

Now that you have completed all of the preliminary work in deciding what type of car you might want and how much it should cost you, it’s important to drive the vehicle you have in mind.  Whilst you might love the look of the vehicle and all of the numbers stack up on paper, it is important to know how the vehicle operates and whether it actually suits your requirements.  The only way to understand this is to drive the vehicle and to experience how it performs first hand. When test driving the vehicle, try to do it in the same environment as you would normally do so during your daily routine.  If the vehicle will be used to transport the family, make sure they also get to experience the vehicle and can provide their input if there are any obvious problems (rear seat is too cramped or if there isn’t enough leg room or storage space).  Once you’ve signed on the dotted line and the vehicle is yours, it is too late to find out that the vehicle doesn’t actually meet your requirements!

6. Shop around for the best deal

Even though you may have driven the vehicle and know that it is exactly what you are looking for, don’t be tempted to rush into buying the vehicle without doing some more homework.  Shop around to see if there are any deals on that particular vehicle or whether there may be a demonstrator that you can purchase at a significant discount.  If you are prepared to wait until the end of the month, there may be additional discounts for those dealers who have not met their sales targets and are prepared to negotiate harder to get your business.

If you don’t enjoy the haggling on price with a new car dealer One Car Group can negotiate the purchase on your behalf.  Call us on 1300 616 993 to discuss your requirements.