Buying your first car is an exciting time in your life, and it helps to be up to speed on everything that's involved.
In part one of this two-part series, we'll take you through the key things you want to be aware of when buying a car for the first time.
What type of car do you need?
Is it for work, just getting around or for enjoying the great outdoors? Before you start looking at deals, really think about what you need the vehicle for most. That way you can narrow down the best type to buy.
For example, an automatic hatchback might be better for stop-start city driving, while a manual could be better for a working vehicle – or even a 4WD for long road trips.
New or used?
When you’ve decided on the type, you’ll need to consider whether to buy new or go second-hand.
Getting a brand new car means you’ll spend more, but it comes with some benefits like having an almost faultless vehicle with full warranty. However, a new car can lose 30 to 40 per cent of its value in depreciation over the first few years. While a second-hand vehicle will be cheaper, you are forced to take the vehicle as is.
How much can you really afford?
The upfront price of a new car is not the only thing you need to consider. Factor in the ongoing costs of maintaining your car as well. For instance, when you first buy a car there may be stamp duty and transfer fees – on top of the price of the vehicle. Then you need to factor in servicing, insurance and petrol, which all add to the general cost.
Work out what they'll add up to over a year before making a decision. Otherwise you might find yourself with a nice new car you can't afford to keep.
Do your research
Before you buy anything, do research on the vehicle you have in mind. Search online for information on what you should expect such as pricing, depreciation and running costs, as well as reviews from other owners, so you get a really good idea of what you'll be in for if you’re thinking of buying a particular make or model. Doing your research can also open your eyes to other car options.
Google 'owner car reviews' or manufacturer and dealership websites are good starting points. You can also check through newspapers, catalogues and car magazines. Don't forget to ask family and friends for their honest opinions.
The bottom line is that it really is worth taking the time to look around and consider all your options before buying your first car. The right loan can also make all the difference to how much you can afford.
To get you started, find out how much your individual rate and repayments before applying without affecting your credit score here. Alternatively, give us a call on 1300 108 794.
To read Part 2 of this series, click here
This article provides you with factual information only and is not intended to imply any recommendation about any financial product(s) or constitute tax advice. If you require financial or tax advice you should consult a licensed financial or tax adviser. Neither Pepper nor its related bodies, nor their directors, employees or agents accept any responsibility for loss or liability which may arise from accessing or reliance on any of the information contained in this article. For information about whether a Pepper loan may be suitable for you, call Pepper on 13 73 77 or speak to an accredited Pepper Money broker.
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