First things first – set a budget
This is the BIG downfall for a lot of us out there – we don’t set a budget so we end up spending WAY too much on a car that may not suit us now and into the future. Chances are you’ll be financing the car with a loan. With that in mind, you should do a bit of “back of the envelope” maths. You need to know how much you can afford to pay each month in repayments, insurance (a yearly premium divided by 12), scheduled servicing, and average fuel consumption. You can make a start using a car loan calculator.
Once you know that, you can start shopping!
List your car’s must haves, wants and “nice to haves”
Your car is your second biggest purchase next to a home, so it has to fit what you and your family needs above all. Do you pride extra storage over bells and whistles? Do you really need an SUV when a sedan will do? Other small but important features you may not want to live without are:
When I figured out what our next car MUST have had, it was easy whittling down the options within my price range.
Think long term
Most of us think about cars in the moment, but if you’re a new mum like me, you should look at the bigger picture. You should get a car that might need to accommodate a growing family. If your family is young and growing, the car could be a hand-me-down for a teen who needs a set of wheels one day.
New vs. used vs. certified used
Though most of us are in the market for a new car, it might make financial sense to look at something used instead. Newer cars have the best and latest safety features – five star ANCAP safety ratings are becoming easier to find these days – but there is an alternative to buying new that will save you even more money. Buying a certified used car is the “best of both worlds” in new and used cars. Certified used cars are refurbished ex-lease cars that are at most three years old. The best part is certified used cars come with a manufacturer warranty and won’t lose their value by 20% when you drive it away from the showroom.
Approach dealers at the end of the month and holidays
- Leather vs. cloth seats – leather is easier to clean, cloth is cheaper to buy and replace
- Safety features such as reversing cameras, collision detection or park assist
- Satellite navigation – or can you rely on your smartphone instead?
- Colour – colours such as white are favoured by insurance companies
Car dealers are professional negotiators. Though we might do the same with kids and bedtime, it’s not really the same thing! But you can take a few aces up your sleeve when it comes to negotiation. Try to approach dealers at the end of the month because they need to hit sales targets. You can save even more by taking cars already on the showroom floor because they are costing the dealer money to keep. It means they’re all keen to make a good sale!
Don’t use dealer finance
If you want to save money on your car loan, do NOT use dealer finance, especially if they offer “zero” percent finance. This usually comes with a catch, such as paying the inflated list price for a car you can get much cheaper. Like shopping for a car, shop around for the best finance deals and rates. You can even use a broker who will shop around on your behalf to find a loan that suits your family. A little bit of homework goes a long way!