Buying your first car can be very difficult, this can be for a number of different reasons; you could lack knowledge on what you’re buying, you might not have the resources to buy your first car or you’re just struggling understanding what goes into buying a car.
10 tips for buying your first car!
- Set your budget
Figure out what your budget is. Take a look at your savings, income and debts. This should give you a ballpark figure of what you can afford to spend on a car. Be flexible, but always be firm with your maximum price.
- Know the difference between ‘want’ and ‘need’
Now that you’ve narrowed your options down according to your budget, it’s time to make your list of needs vs. wants – and there’s definitely a difference. For example, you may simply need a reliable car that gets you from A to B, and will last for at least a few years. That leather upholstery and wireless charging pad? Those probably belong in the ‘wants’ list.
- Understand the lifetime cost
When buying your first car, think about the lifetime cost of the vehicle. In the short term, the price may seem pretty low. However, in the long-term, the lifetime cost of the car may be far more than you bargained for.
The lifetime cost of your car includes on-road costs, such as:
- Vehicle registration
- Car insurance
- Do your homework
There’s no one-size-fits all car for first car buyers. The main thing to consider is whether the car make and model will meet your present and future needs and if you can afford the on-road costs. Come decision time, you can avoid making a rushed decision. Consider your lifestyle and how you’ll use the car, such as if you’re planning to start a family soon, to narrow down the size and model that best fits you.
- Decide whether you want a new or used car
Factoring in your budget, needs and lifestyle, weigh up the pros and cons of a new or used car. There’s no right or wrong answer – it’ll come down to your unique circumstances.
- Come with a new car warranty
- Can include features like improved fuel efficiency and the latest technology
- Are more expensive
- Depreciate in value quickly
- May attract higher car insurance premiums.
- May not come with a warranty
- Require you to check that they’re debt-free before you buy
- May come with unexpected problems or be more likely to need repairs
- Can still come with great features (especially if they’re only a few years old)
- Are usually less expensive
- May attract lower car insurance premiums.
- Buy from a private seller, dealership or auction
Car dealerships tend to be more expensive than private sellers. Depending on your state, car dealers may have to offer a statutory warranty for cars under a certain age/that have done under a certain number of kilometres. Again, do your research.
Private sale or auction
If you’re buying a car in a private sale or auction, always check for the following paperwork:
- Proof of ownership
- Current registration paperwork
- State roadworthy certificate, and
- Safety check report (sometimes known as pink or green slip, or roadworthy certificate).
- Decide whether to buy outright or finance your car
If you’re considering purchasing a car with a loan, weigh up whether the additional fees and interest on the loan are worthwhile. If you pay for a car outright, it may take you some time to save enough. Financing a car means you can get the car straight away, but you’ll end up paying more money in fees and interest. Consider talking to an independent financial advisor if you need advice on the best option for you.
- Take a test drive
To ensure you’re 100% certain on a vehicle, take it for a spin before buying. A test drive lets you experience how the car responds on the road, and gauge its condition. This can help you decide whether it’s the right one for you.
- Shop around and don’t be afraid to negotiate
Many first time car buyers fall into the trap of accepting the first offer without shopping around. Browse around and see if there’s a better deal out there. If you know the market value, you may be able to use that knowledge to negotiate.
- Chech out your car insurance options
If you’re considering getting a new car, it’s good to know about your car insurance options. Third Party Property Damage Car Insurance, you’re covered for accidental damage to someone else’s vehicle or property caused by the use of your car. With Comprehensive Car Insurance you’re covered for accidental damage to someone else’s vehicle or property caused by the use of your car, plus accidental loss or damage to your car, including damage caused by collisions, theft and natural events.