Should I modify my car?

Five worst car modifications of all time

Since the advent of the wheel, there have been those among us who feel the need to take the design one step further. Some do it for speed, some for handling and some simply for style.

The result? Vehicles fitted with neon underglows, spinners and headlight eyelashes, to name a few. But be warned, installing the wrong optional extras could be a crime against more than just good taste.

Certain modifications may be deemed illegal by your state authority, so it pays to check before you drive to avoid picking up an unwanted fine. Other car mods made without your car insurer’s consent could void your policy leaving you high and dry if you are involved in an accident.

Also, depending on how tasteful (or not) your modification is, it can put a dent in the future resale value of your vehicle or even turn away potential buyers.

So before you install that turbo dump valve, read this list of “bad” modifications and beware, your modifications will have consequences.

DIY extras

Topping the list of aftermarket no-nos is fitting DIY extras, such as stereos and speakers. While you may think you’re doing a great thing by saving cash on installation fees the chances of you doing the job as well as a professional are pretty low.

Dodgy home-installation jobs will cause a car’s resale value to plummet so keep this in mind before you decide that you’re capable of installing that subwoofer in the boot yourself.

Bad alloys

While hotter rims and tyres may appeal to you, they may not appeal to your car insurance company, who may have conditions relating to vehicle modifications. It definitely pays to check the fine print of your policy or call your insurer before you have them fitted to your car. After all, it’s not worth the risk of having your car insurance declared invalid when you need it most.

Your modification to tyres and rims could also land you in trouble with the law so check with the road traffic authority in your state before you go through with it. Altering your rims and tyres beyond certain limits is illegal in some parts of Australia and will lead to a hefty fine.

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Colour crimes

Similarly, unusual car colours such as shades of yellow, orange and green are not as popular as traditional colours, and can make a vehicle more difficult to sell. Of course if you never plan to sell then feel free to get those hot pink flames painted down the side of your car but keep in mind that there’s no going back without outlaying further cash.

The same is true for some interior fabrics, such as fancy or expensive leather trims. While they may set you back quite a bit they add no more to the value than a basic full leather option so as far as investments go this is not a good one to make.

Accessories

Even expensive extras paid for in the showroom and installed by the experts may be not be covered by your comprehensive car insurance policy, unless you specify at the time of taking up the cover. Car insurance policies can differ dramatically in what is covered and also in price, that’s why it’s so important to compare policies and read the product disclosures before signing up.

Over the top features

Fancy climate control systems can also be money for jam when it comes to the resale value of your vehicle. While standard air conditioning was found to boost a car’s value, extras such as zone control might be nice but don’t offer any return on investment in the long term.

With all this said, if you’re not concerned about the resell value of your car then go ahead and express yourself through mods. Keep in mind it is part of your duty of disclosure to tell your insurance provider immediately when you decide to make modifications to your car. If you don’t, by law your provider may reduce or refuse your claim or cancel your policy.

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How much is your car worth?

If you already own a car, you could potentially bring down the cost by selling your car in the process. Before that happens, though, you’ll need to find out how much your car is worth.

One of the first places to find this value is to research the value of your current car, giving you an idea of roughly how much it’s worth in its peak condition.

There are plenty of websites that offer a free online valuation, allowing you to enter your car’s make, model, year, badge and description, with results listing a price guide based on both selling your car privately and through a dealership.

Of course, dealerships will try to profit on your trade-in by buying it for less than they can sell it, making it highly unlikely that you’ll get the same price selling a car to a dealer as you would selling a car privately.

However, private car sales can be costly and can take months to sell, making car trading more convenient with a guaranteed return, even if you may not be able to realise the total value of your car’s worth.

Remember that everything is negotiable. If the dealership is offering you less for your trade than you wanted, try to negotiate elsewhere to gain that money back. Start by negotiating on the price of the trade and then ask them if they can give you a further discount on your new car.

How much is my car worth?

If you own a car, it may be something that can help you bring down the cost of your next vehicle purchase through its sale. However, before you can do that you’ll want to find out how much your car is worth.

Your car’s worth can depend upon various aspects, including:

  • Age
  • Condition
  • Model and make

A great starting place for aspects of this includes websites that offer online valuations, allowing you to enter your car’s make, model, year, badge and description, with the listed results displaying a price guide based on both selling your car privately and through a dealership.

Both have pros and cons, as cars can be very profitable, something that will no doubt impact any chance you have to make the most of your car’s value upon sale. Dealerships will try to profit on your trade-in by buying it for less than they can sell it for, so you shouldn’t expect the same price selling a car to a dealer that you would necessarily get selling a car privately.

What is CTP insurance?

CTP insurance, also known as compulsory third-party insurance or a green slip, is compulsory if you want to register a vehicle in Australia. If you’re responsible for a car accident, your CTP insurance will be used to pay any compensation due to anyone who might be injured or killed. However, CTP insurance doesn’t cover you for vehicle damage or theft.

What is dealer finance?

Dealer finance is a car loan organised through a car dealer – as opposed to car loans organised by a finance broker or directly by the lender.

What is a dealership?

A dealership is a car yard or a place where cars are sold.

Can I buy a car as a student?

Buying a car is a huge financial decision, and shy of marriage and purchasing a house (or perhaps around the world travels), it may be the biggest financial decision you make. But if you’re looking at your empty pockets, don’t despair! Your dream of owning your own car could become a reality, if you look for and compare the right car loans for your circumstances.

What is a car loan?

A car loan, also known as vehicle finance, is money that a consumer borrows with the express purpose of buying a vehicle, such as a car, motorbike, van, truck or campervan. Car loans can be used for both new and used vehicles.

Can I get a no credit check car loan?

You may be able to get a no credit check car loan in certain circumstances, although it’s important to weigh up your options before doing so.

Most lenders refuse to provide no credit check car loans, because they don’t want to give loans to borrowers without first confirming that they have a track record of repaying debts. So any lenders that do provide no credit check car loans would take measures to protect themselves against the risk of default.

That’s why no credit check car loans have higher interest rates than other car loans. Also, borrowers often have to provide security and put down a larger deposit.

What is proof of income?

Before giving you a car loan, lenders will ask for proof of income – documentary evidence that you earn as much as you claim you earn. Lenders will typically want some combination of tax returns, pay slips and bank statements. The reason lenders want proof of income is because they want to be sure you have the means to repay the car loan.

Where can I find lenders who offer no credit check car loans?

You can find lenders who offer no credit check car loans through comparison sites like RateCity or by doing an online search.

One thing to bear in mind is that lenders who offer no credit check car loans are likely to charge higher interest rates and higher fees than on car loans that include a credit check. Also, lenders who no credit check car loans might expect you to pay a higher deposit. You might also be expected to provide security.

Lenders regard no credit check car loans as riskier than other car loans, which is why it’s a niche product that often features special conditions.

Should I service my own car?

There are also costs associated with vehicle ownership, such as paying for petrol and the obligatory ongoing maintenance. But should you cut down on costs by servicing your own vehicle?

If you’re considering getting out the tool box, spanner, and grease-laden towel, you need to carefully weigh up the risks and benefits. A trained mechanic will need to complete certain tasks, while you may be perfectly capable to handle other aspects yourself.

If you’re short on time, it may be worth paying for the convenience of a full vehicle service. However if you’re trying to slash your expenses, there are some basic maintenance tasks that you can complete yourself.

You should call a mechanic if you’re unsure about a vehicle maintenance task you’re about to take on. However there are a number of maintenance tasks that you may be able to complete with your own two hands including:

  • Replacing your car battery
  • Changing the oil
  • Replacing worn windscreen wipers
  • Replacing blown fuses

Remember to keep your car’s body in good condition, by washing and applying a protective wax on a regular basis, too.

Always check your car warranty agreement as some new car purchases come with an extended car warranty provided your services are conducted at the vehicle service centre where you purchased the car. In these circumstances, you may find the service fee is capped, alleviating some of the maintenance woes.

Where can I find lenders who offer no credit check car loans?

There are companies that claim to offer no credit check car loans. However, you may find that companies that offer no credit check car loans have high fees and high interest rates.

You might be better off finding a specialist lender who will look at your credit history and income, who will decide whether or not you are able to responsibility pay back the loan. Alternatively, you could contact a car finance broker.

What is an LVR?

The LVR, or loan-to-value ratio, is a percentage that expresses the amount of money owed on the car compared to the value of the car. For example, if you take out a $15,000 loan to buy a $20,000 car, you have an LVR of 75 per cent. LVRs change over time as you pay off your loan and your car depreciates in value. For example, two years later you might now owe $10,000 on your car, which might now be worth $15,000. In that case, although there would still be a $5,000 difference between the size of the outstanding loan and the value of the car, the LVR would now be 67 per cent.

Can you put a deposit on a car to hold it?

It’s up to individual car dealers to decide whether to promise to hold on to cars in exchange for deposits.

Some car dealers will request a deposit and promise, in return, to hold on to the car for a certain period of time. Others will request a deposit but make no guarantees, other than to return the deposit if they end up selling the car to someone else.

Some car dealers ask for deposits; others don’t. If you get asked for a deposit and you decide to pay it, make sure the dealer gives you signed paperwork before you make the payment and a receipt after you’ve made the payment.