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When is the best time to buy a car?

When is the best time to buy a car?

Many Australians are putting off their plans to buy a new car until later. But how can you tell when the time is right to splurge on those new wheels?

According to the Federal Chamber of Automotive Industries (FCAI), car sales have declined by 8% over the first four months of 2019. In April 2019, there were 320 fewer car sales per day than in April 2018.

FCAI chief executive, Tony Weber, cited several potential reasons for 2019’s car sales slump, including:

  • downturn in the housing market
  • tightening lending practices
  • environmental factors such as drought and flood
  • the imminent Federal Government election

“With all these elements currently present in the market, it is no surprise that Australian consumers are conservative in their approach to major purchases at the moment.” – Tony Weber

If you’re one of the Australians who has been putting off your car purchase, when is the best time for you to wait for? Some options to consider include:

  • Sale time – It’s common for car dealers to slash prices at the end of financial year, at Christmas time, and on other occasions throughout the year, so consider timing your car loan application so you can be pre-approved in time to take advantage of these sales.
  • End of the week/month – Many car dealers have weekly or monthly sales targets to meet, so if your timing’s right, you may be able to negotiate a more affordable deal.
  • When new models arrive – As new stock comes in, many car yards will discount last year’s models, which you can then snap up.
  • When you can afford a car loan – Borrowing money to buy a car can put pressure on your household budget. Consider using a car loan calculator before you make an application to work out if you can comfortably afford the repayments.
  • When your finances are in order – To help reduce your riskiness as a borrower and improve your car loan application’s chance of approval, make sure you’re earning regular income and try to pay off any credit cards or other outstanding loans you have owing.
  • When your credit score is strong – You can order one free copy of your credit report per year to find out if you have good credit. If it turns out you have bad credit that may affect your car loan application, check your credit history for any errors affecting your score, and contact the parties involved to get them fixed.

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Fact Checked -

This article was reviewed by Property & Personal Finance Writer Nick Bendel before it was published as part of RateCity's Fact Check process.

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Learn more about car loans

I’ve been denied a car loan before; can I still get car finance?

Even if you’ve been denied a car loan before, you might still be able to get car finance. The key is to make the right application to the right lender.

The ‘right’ application is one that makes you look like an acceptable risk, which might include things like improving your credit score, increasing your savings rate and accumulating a bigger deposit.

The ‘right’ lender is one that deals with borrowers like you. For example, while some car loan lenders only deal with good credit borrowers, there are others that specialise in bad credit or poor credit borrowers.

How to get pre-approved for a credit union car loan?

Getting pre-approval for a credit union car loan can make the process and paperwork required to buy a car more streamlined and less stressful. You can apply for pre-approval for a credit union car loan, online or contact your credit union. You’ll be asked to provide relevant documentation regarding your income. After you submit your application, your credit union will review and evaluate it along with the documents you submitted. If you meet the eligibility criteria, your loan will be pre-approved for a specific amount.

With pre-approval for a credit union car loan in hand, you can negotiate your new car’s price with peace of mind you have the funds.

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 to apply for pre-approval of a car loan from RACV?

If you’re planning to apply for a car loan with RACV, the best way to start is by having a clear picture of your requirements. By getting pre-approval on your car loan, you’ll be able to go shopping for your new car with a definite budget that will help you narrow your search. Once you’ve decided to buy a car with the help of a loan, you may have even identified the type of car you would like to purchase, you can seek pre-approval on a car loan from RACV. 

You can apply for pre-approval by filling out a form online and uploading the relevant documentation regarding your identification, income, debt and credit history. Once you submit your application, RACV will review and verify the documents. If you meet their eligibility criteria, you will get pre-approval for the amount they are willing to lend to you. With this pre-approval, you can go car shopping with the confidence of knowing what you can afford.