Bessie Hassan | Money expert at finder.com.au
So you’ve passed your driving test and have those red hot p-plates in your hands. No more asking for lifts from your parents or older friends – now to a new-found independence with your first set of wheels.
Buying your first car is one of the biggest purchases that you’ll make in your life (after a house) and it’s something that most of us will do more than once in our lifetime, which means it’s important to know how to choose the right car for you.
Although buying a car is exciting, it’s also a sign that you’re entering adulthood, which (unfortunately) comes with responsibility. So before you hit the car yards or online sales, here are some tips to help you choose your first car.
Know what you can afford
After looking at your finances, you might decide that the most you can afford to pay for a second-hand car is $5,000 (for example). However, the cost of owning a car does not end at its initial purchase price. Owning a car also comes with many ongoing costs such as registration, insurance, maintenance and fuel. After factoring in these expenses, you might realise that you will need to opt for a cheaper car to better fit within your budget.
Having a budget will also help you decide the best way to pay for your new set of wheels. If you’ve diligently saved most of the money you earned while working, you may be able to afford to pay for your car outright.
However, if you don’t have enough savings stashed away, you may want to consider taking out a loan. You can arrange this with your car dealer or with your bank. Keep in mind that car dealers often charge higher interest rates for the convenience of both purchasing your car and arranging finance with them. Making the effort to chat to your bank about purchasing your car could score you a lower interest rate!
Look for a car with a good safety rating
Young drivers often get a bad wrap for being big risk takers on the road, and often have to pay higher insurance due to this perceived risk. To increase the safety of not only yourself, but other road users, consider buying a car with modern safety features. Car safety technologies are becoming standard inclusions in all new cars. Features such as reverse cameras and sensors, automatic braking, responsive headlights and voice control technology can result in your vehicle having a higher ANCAP safety rating. Safety features such as these may even make your car cheaper to insure.
However, don’t be pressured into purchasing additional and unnecessary safety features, such as moisture-sensing windshield wipers and motorised seat belts because if they break, as the repair costs are usually very high.
New or used car?
Buying a new car is beneficial as these vehicles are usually safer and more reliable than used cars. However, buying a new car is usually more expensive. It’s important to know what you want before facing a (possibly pushy) car salesperson so that you aren’t pressured into purchasing a vehicle with additional features that you don’t want or need.
If you don’t have the scope in your budget for a new car, opting for a used car will usually be the cheaper option. However, this also comes with the challenge of dealing with private sellers who may not disclose all the details about the vehicle’s mechanical health. It’s important to check the car’s finance, accident and repair history. This, in addition to a physical inspection of the car, will usually reveal any major problems with the vehicle, and will help you avoid buying a lemon!
Do your research
Make sure you jump online to get a feel for the current car market. Having a general idea of the cost of similar car models will help you avoid falling for a dud deal. Have a think about how you’re planning on using your car to help you decide what features you need and those that you can live without. This can sound like a daunting task (especially being your first time), so have a chat to family and friends who have bought a car before and who might be able to offer some advice.
Remember when buying a car, you can ask for a better price. Haggling is normal, so don’t be afraid to walk away if the seller can’t give you what you’re wanting. There are plenty of sellers out there – have some patience and you’ll likely find one who is selling your dream car!
You’re only ever going to be buying your first car once, so try to enjoy this exciting time. Doing your research and due diligence by drawing up a budget and researching prices, car safety ratings and features are just some ways you can navigate your first car purchase, and ensure you make the right choice for you. If you need to chat about financing your new car then head into your local BOQ branch to find out how BOQ can help.
About the author: Bessie Hassan is the Money Expert at finder.com.au – Australia’s most visited comparison website – and is a respected media commentator who regularly appears on radio, TV and throughout digital publications sharing her best money-saving hacks and advice.