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News & Updates

6 Tips for first-time car buyers

Buying a car for the first time?

The car-buying process is never filled with so much uncertainty as the first time. Whether you just landed your P plates, or are outside of the first-time car buyer prototype, buying your first car isn’t easy. To make life easier, we’ve put together 6 essential tips to help you buy your first car. Find out what you need to know about purchasing a new car or a used car, car insurance and your car finance options.

Tip One:  Assess your needs.

Practical considerations to keep in mind when buying your first car even if it is not brand new:

  • What safety features are important to you?
  • How many passengers will you be frequently carrying?
  • What type of driving do you do: highway, off-road, etc?
  • How much parking space do you have?
  • Do you need large cargo capacity?
  • Is fuel economy important to you?
  • Do you need all-wheel drive?
  • Will you be doing any towing?

Understanding what is essential to your needs will make the car buying process seem logical, how many of these things are met with the car you are looking at?

Tip Two: Establish a realistic budget.

Buying the car is just the start of your expenses. The extra costs can really add up on top of the drive away sticker price. Be realistic and identify the car you really want. Understand your driving requirements and what you can afford. Take into account:

  • Registration fees (yearly)
  • Transfer fees (used cars only)
  • Stamp duty costs
  • Insurance
  • Petrol
  • Mechanical maintenance

If you are financing your car with CIRCLE Alliance Bank then you can include these expenses into the overall repayments of the loan and use any amounts in advance to cover these costs through a redraw facility. For more Car Finance Tips, view the most recent Wheels publication from CIRCLE Alliance Bank here.

Tip Three: Finding the right car.

When considering the ‘Right” car you are looking to get value for your money. Consider the safety features, the inclusions when compared to your needs, the overall costs and the environment.

New Vs. Used

New Cars. New cars come with a warranty, and more often are more fuel efficient, reliable and safer than their former models. They depreciate significantly in value over the first few years, so if you intend to sell it early on, you could find its value has dropped 30% or more from what you paid. Used Cars. You can make great savings by buying a near new, and sometimes the car is still covered under the manufacturers warranty depending how old it is. Used cars are great when looking for your first car as they are quite often much cheaper than a new car, but can still have the features that you are looking for. When buying a used car, it is smart to consider the history of the car before purchase such as has it been well maintained and has it ever been in an accident. For more, view the CIRCLE Alliance Bank’s New Car Loan Solutions and Used Car Loan Solutions.

Tip Four: Your finance options.

Different car payments methods:

  • Savings. Pay for your car outright using a dedicated savings account
  • Personal loan. Take out a personal loan to cover all or part of the cost
  • Dealer finance. Borrow from the seller and pay back in instalments.
  • Private leasing. Often leaving a balloon payment or lump sum payment at the end of the loan to finalise the lease.

What are my loan options? There are many different car loan options and many different lenders to choose from. How do you find the right lender for you? Questions to ask your lender: What loan options are available? What are the fees and charges? What will my repayments be? Are there any loan conditions to be aware of? Comparison Rate Comparison rates allow consumers to easily compare loans from different lenders. The interest rate is only one factor in the overall cost of the loan – fees and charges must also be taken into account. The comparison rate includes the interest rate, any establishment fees and other upfront or ongoing fees for a particular loan, reduced to a single percentage figure. The Key to Getting Approval For A Car Loan Before approving a loan, lenders will check your credit rating. Information stays on your credit rating for at least five years, so if you think your credit rating is borderline, raise this issue with your potential lender. Honesty about the situation shows you are responsible and ensure that you stress the problems have been resolved. See our CIRCLE Alliance Deer Park Branch Auto Loans and Car Buying Tips & Resources for more on your car loan options, resources, fact sheets and tips.

Tip Six: Before you buy the car.

Check Legal Ownership Check with the Personal Property Security Register (PPSR) to see if a vehicle is encumbered. If a vehicle is encumbered, it can be repossessed from you after purchase because there is money owing on the car, or that the person selling the car does not have ownership rights. To do a PPSR check, you will need the current registration certificate. Is the car encumbered?

  • Does the seller have true, full and outright authority to sell the car?
  • Does the car and rightfully belong to the seller?
  • Is the car carrying any financial debts?
  • Has it been used as security on a loan which has not been discharged?
  • Can the car be repossessed although you have bought it in good faith?

Tip Seven: Drive away happy

The First Car Buyers’ Checklist To Drive Away Happy: Test Drive Get behind the wheel, and see how you feel. Spend 15-30 minutes getting used to the car, and test it in different road conditions and speed levels. When you’re on the road, consider if the car is mechanically sound, and attempt parking it to test visibility. Safety ratings, checks and inspections Check out the safety ratings, and have a mechanical inspection and encumbered vehicle check. A mechanical inspection report should be recent and thorough; if you don’t have expert advice readily available you can organise an inspection through the State or Territory Motoring Association for a small fee. When buying a used car, ensure you have an encumbered vehicle check so you can rest assured the car cannot be repossessed due to the owners’ unpaid debts. Negotiating Stay positive and don’t be persuaded or hurried. If it doesn’t feel right, walk away. Use the inspection report to negotiate a discount. Doing the deal A deposit will be required once you’ve agreed to purchase the car, and the minimum amount required should not be more than 10%. Before signing a contract, ensure you receive a signed and dated receipt, a delivery date is specified and that all costs are clearly stated. Delivery Protect yourself and your new wheels. Arrange insurance before you take your new car home, Deposits and loans with CIRCLE Alliance Bank are deposits and loans of Bendigo and Adelaide Bank Limited (Bendigo) AFSL/Australian Credit Licence 237879.  Unless otherwise specified, CIRCLE Alliance Bank is an authorised representative and credit representative of Bendigo and promotes and distributes products and services as agent for Bendigo.