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6 tips for buying a car

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For most Australians, owning a car is a fact of life, rather than an optional extra. 

But cars don’t come cheap – for many people it’s the most expensive thing they’ll ever buy after real estate. These practical tips may help you make a smart decision over an impulse one.

Set yourself a budget

Cars can end up being an emotional purchase – especially if the car you want is more than you can actually afford. Keep yourself in check by only researching cars that fall within your budget. Now is not the time for fantasy shopping. Use a car loan calculator to work out how much you can borrow – the amount will depend on the price of the car, the size of your deposit and what you can manage in monthly repayments.

Add up the additional extras

When you’re doing the maths on your new car, don’t forget the extras. A car costs a lot more than the price you pay when you drive out of the showroom. Stamp duty, rego, CTP insurance and comprehensive insurance are all additional costs you need to factor in.

Find something that suits your needs


Cars can be a fashion accessory but it’s not a bad idea to make sure they’re practical. There’s no point buying an Audi A5 Coupe if you’ve got three kids, a dog and a love for kayaking.

Similarly, if you are primarily using your car to commute to and from work, you might be better off with something that’s compact and easy to maintain.

Resist the temptation to make an impulse purchase. Do your homework, talk to friends with similar cars and try not to get swayed by an impatient seller. 

Compare and contrast

When you have a shortlist of cars together, weigh up the merits of each one.

Compare fuel efficiencies and if the difference is significant, work out what that means in terms of petrol over a number of years. The cost of spare parts is also important – if you’re buying a popular make and model then the chances are spare parts and repairs will be easier and cheaper to come by.

Get your paperwork in order


Just like buying property, you need to make sure the paperwork is in order. If you’re trading in your old car, make sure you get the trade-in amount in writing, and read over the clauses carefully to make sure there’s nothing to catch you out.

Work out what loan works for you

If you are taking out a car loan, compare the market to get the best possible rate. You also need to decide between a variable or fixed loan and whether it will be secured or unsecured. RateCity’s car loan guide can take you through the options.

It’s also important to do you sums. A free car loan calculator is a great tool you can use to assess different repayment scenarios. As you’ll see, it’s not just the interest rate that affects your repayments. Borrowing amount, loan term and repayment frequency also impact the ultimate cost of a car loan.

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