Get your car finance arranged in advance If you need a loan, be aware that finance through the car dealership may not always be the best option.
Get your car finance arranged in advance
If you need a loan, be aware that finance through the car dealership may not always be the best option.
Shop around for the best interest rates on personal loans and aim to get the amount you want to spend pre-approved. This will put you in the same position as a cash buyer, which can be a real advantage.
If you’re a homeowner, you may be considering extending your mortgage to borrow money for a car at a reasonable interest rate. Before you do, have a think about the loan term as well. If you pay back the extra amount quickly over say three years, as you would a personal loan, you’ll make the most of a lower rate. If you end up paying the extra amount over the whole term of your mortgage you’ll end up paying a lot more in interest despite the lower rate.
Read more about interest rate vs interest cost.
Consider selling privately
Though it’s convenient to trade in your old car when you’re buying a new one, you’re likely to get much less for it than if you were to sell it privately.
If you’re new to selling a car, there’s plenty of good advice available online to guide you through the process. Try starting with the AA’s Used Car Selling Guide.
Do your research
Do everything you can to find out what is the true value of the car you want to buy. Compare similar or the same models at different dealers, and go in to negotiate with dealers armed with this information.
Also consider spending $20 on an AA vehicle valuation, which will tell you the realistic market value of the car. All you have to do is enter a few details about the car online and pay the fee.
Timing is everything
Car dealers have monthly and quarterly sales targets to meet, so you just might get a better deal if you time your approach at the end of the month, or the end of the financial quarters (March, June, September and December).
The list price is a starting point
Don’t be afraid to negotiate on the price listed in the car window. It’s a good idea to enter negotiations with a fixed price in mind (based on your research into the true value of the car) and stick to it.
Be prepared to walk away
If you can’t reach an agreement with the dealer, give them your phone number and ask them to call you if anything changes. Explain that you’re interested in the car but will also be looking elsewhere.
What if something goes wrong?
One advantage of buying through a dealer as opposed to a private seller is that you have many more consumer rights if something goes wrong. You can read more about solving issues with your car dealer on the government website, Consumer Protection.
For more advice on buying new and used cars download the Harmoney e-book An Easy Guide to Buying a New Car.
- We write these articles for you, our Harmoney borrowers, to be, what we hope, are helpful tools for different aspects of life. The information is designed to be a general guide only. As you read, you should consider how - or if - the information might apply to your circumstances, and consider if your needs mean you should seek further advice from an expert in that particular field.
