3 signs that it is time to walk away from a new car

Last updated on June 6th, 2023
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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It depreciates like crazy

You may be thinking that all cars depreciate, unless if you are rolling with the big bucks and own those classy vintage cars. Not all cars are created the same, even when it comes to the most basic types. You may knock off 50% of your car's value due to depreciation, but there are some cars that retain their value better.

When buying a new car, you need to think like a buyer who will be interested in your car a few years from now. Sticking with a popular brand that has a high performance, body, and colour can see you get the best return. Cars brands such as Audi, Mercedes-Benz, Toyota Hilux and Corolla to name a few can retain anything between 59% -73% of their value.

Choosing a car that doesn’t bust your budget when it comes to depreciation can make a difference for new car owners. Therefore, researching the car you are interested in can save you thousands of dollars in the long run.

A car that is hard to maintain

Having a car that comes with high end finishes and a mean looking interior that will make your fellow passengers swoon is one thing. There are some interior features of a car such as piano black finishes and cream leather seats that give your car that sleek out-of-the-box finish to your car that can soon turn into a scratched and sticky mess, especially if you have children. When purchasing a new car, it is vital to know what it would be used for, whether it matches to the type of lifestyle you have, and if it is affordable when it comes to maintaining both the exterior and interior.

Comes with high running costs

Ongoing running costs of your new wheels can either make or break your budget. Although it may look like a mean beast and come with all the fittings that you desire, it is vital to consider the ongoing costs. These costs will differ from state to state.

According to RACQ, the average cost Australians had to fork out when it came to ongoing costs ranged between $116.11 a week for cars that were classified as micro while $332.82 for cars classified as SUV all terrain. Researching the ongoing costs that come with owning a new car will let you know whether placing your hard-earned money on the car will be worth it or not.

Always remember to have a realistic budget in place to avoid and compare your way to a low rate car loan to avoid biting off more than you can chew.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for car loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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