Planning on signing the first deal in your new wheels? Being prepared in terms of the cost will help you in the long run. The last thing you will want is sitting with a car in your yard that you cannot afford. Avoid the sleepless nights by preparing your self financially for the real cost of buying a car.
Once the excitement of knowing that you are able to buy a car for the first time (or even a second time as a back up vehicle) you will have to brush up on your skills on the cost that is needed. Try not to be dazzled by the asking price that can leave you picking up your scraped jaw at what it actually costs.
Don’t let Stamp duty stamp out your hope
You might have found a great deal from your dealership only to be smacked back into reality with the stamp duty that comes with a car. When creating a budget for your car consider this fact. This will differ from state to state as they are taxes set by the government, and you can easily find out how much it will cost by searching through online platforms. It then becomes payable when you are registering your vehicle or transferring its registration.
Places such as NSW calculate the stamp duty at 3% of the car’s market value which can be up to $45,000, and a 5% value for a value above $45,000. This is usually included in the price when you buy a car from the dealership when you make a payment.
For you to even drive your car out of the dealership you will have to get Compulsory Third Party (CTP) Insurance. Before you hit yourself over the head with a brick thinking you are about to pop a vein on how expensive insurance is, you will be surprised at how affordable it is.
An added bonus is that its for your benefit to protect your new wheels and yourself against injury or death as a result of an accident. In most state the cost is included in the registration of your car, but you can also select your own CTP provider.
The cost of CTP will differ from insurer to insurer so it’s advisable that you compare the market on what will best suit you. However, it’s best to know that insurers will usually charge you according to:
- The type of car you drive
- Personal details like your age and marital status
- Where you reside
For something that offers more insurance options then comprehensive car insurance is the way to go. It will cost you a little extra, but the benefits will be worth the money. You can skip the footwork by applying through an online lender and bag yourself more than 20% in discounts. Just ensure that it is from an accredited insurer who is registered in the state from which you are buying from.
Honesty is the best policy
Telling a little lie here and there for a cheaper deal has seen some Australians getting away…for a while. It is not until those white lies catch up with you. False claims have caused the Australian industry to $2.2 billion, which is about $10 a year for every registered vehicle.
Research carried out by the insurance council found that 25% of people they interviewed claimed to have known someone who had committed insurance fraud, 20% endorsed the padding and exaggeration of the claim, while a further 38% believed that insurers could afford the cost and therefore won’t be losing anything.
With almost 18.8 million registered vehicles that means a lot of money is being lost. If you are caught for committing insurance fraud you could be put behind bars for 10 years in states such as NSW.
A serving of extras sprinkled with ongoing fees
There will be added extras that will cost you. Extras such as a number plates, registration and dealer delivery charges. Before you sign the dotted line, it is best to ask questions on what is included as standard in the final price. There will also be ongoing fees such as the running costs. RACQ estimated that the average cost of running a car on a weekly basis ranges from $116.11 for cars classified as micro, right up to $332.82 for cars classified as ‘SUV all terrain’.