While the idea of buying a new car can be somewhat daunting, we’ve found the process usually becomes less intimidating when you know what to expect. Which is why we’ve put together these seven easy steps to buying a car, laying out all the need-to-know info that will help you breeze through the car buying process – as you get the very best deal on your new car.
1. Understand exactly how much you can afford
Before you hit the car yards, it’s important that you know exactly how much you can afford to spend. If you happen to have the money to pay for a new car upfront, you’ll know how much you have to work with. If not, you’ll need to do your sums to work out how much you can afford to borrow on a new car loan.
While there are a number of ways to calculate car loan affordability, you could try using the 20/4/10 rule. With the 20/4/10 rule:
- You put down a 20% deposit on the car you want to buy,
- Your car loan should not be longer than four years,
- You pay no more than 10% of your monthly income on car expenses, including your car loan repayment, insurance and petrol.
2. Get your car finance ready
Now you know how much you can spend, it’s time to compare car loans. And that’s where we come in! At Car Loan World, we’re dedicated to helping you find the best car loan for your needs. By searching within our panel of lenders, we can match you with a range of car loans to suit your budget, making the process of finding a car loan that much simpler.
It’s also worth bearing in mind that many lenders now offer preapproval on their car loans, so you can get preapproved for a certain amount before you even step foot in a dealership. Armed with your preapproval, you can head to the dealer knowing exactly how much you can spend, and then snap up the best deal when you find it.
3. Compare your options
Car loan preapproval isn’t all you’ll need to arm yourself with when you check out car dealerships. You should also do some research on the car you want to buy. Wandering into a dealer with no idea about your car of choice is almost an invitation to be taken for a ride – and not in a good way.
As you carry out your research, consider how long the current model has been offered. Most manufacturers update their models every few years, so find out when the next update is due. If you want a bargain, you may find a great deal on an end-of-model runout sale. Alternatively, if you want the latest updates, you may want to wait until the new model is available.
TIP: As you compare cars, be sure to take into consideration factors such as each model’s ANCAP safety rating. Choosing a car with a higher rating should not only be safer to drive, it may also be cheaper to insure. Fuel consumption is another important factor, especially if you plan to use your car frequently.
4. Know what’s included
By carrying out research, you will also find out exactly what’s included on the model you’re interested in. Dealers often try to sway buyers with extras when selling new cars, but if you know what’s included as standard, you can keep a clear head while not being influenced by extras that you know come with the car anyway.
This may also put you in a better position to negotiate for further extras over and above what’s already included.
5. Know when to buy
Want to get the best deal on your new car? You need to know when to buy! If you can plan your car purchase, consider these best times to buy a car in Australia:
- The end of the calendar year: Most dealers want to clear out old stock at the end of the year to make way for new models in the new year, making it a great time to find a bargain.
- The new year: Similarly, January can be a great time to get a good deal, as dealers discount the cars they didn’t sell in December even further.
- The end of the financial year: EOFY sales in Australia are huge, so if you want to find a new car at a bargain price, this could be the time to do it.
- The end of the month: If you’ve missed out on all of the above, you may still be able to get a good price on your new car by shopping at the end of the month to take advantage of dealers looking to hit end-of-month targets.
- On a Monday: According to reports from TrueCar, Monday is the best day to buy a car in Australia, with an average saving of 8.10% of the car’s MSRP. You will typically get the worst deal on a Saturday or Sunday, as this is when dealerships are busiest.
For more on when to get the best deal on buying a car in Australia, check out this post [link].
Now it’s time to negotiate. While negotiating may make you feel uncomfortable, it’s crucial that you work hard to negotiate when buying a new car. Going in with all your research should help you get the best deal, but be sure to keep your expectations realistic – and keep it friendly and polite.
TIP: If you opt for a new model, you will usually find there isn’t much wiggle room on the price. But, if the model you’re interested in is due for an update, negotiating could see you moving the price quite a bit.
7. Drum up some competition
If you’re not getting the price you want, take a look around at other dealerships to see what they can offer. You may find you can get a lower price from one dealer by showing them what another dealer has offered you.