Buying a car? Do your homework first

Shopping for a new car can be exciting. There’s the test drive, choosing the colour and working out which features you can’t live without.

But before you get too attached to that shiny new set of wheels, there are a few important things to check.

A car is a big financial commitment, whether you’re buying new or used, from a dealer or privately. And while most car-buying stories have a happy ending, nobody wants to discover they’ve bought a lemon after handing over their hard-earned money.

Doing a little homework before you sign on the dotted line can help you avoid some expensive surprises.

Here’s our handy checklist to help you get started.

1. Get the car checked by a mechanic

It’s worth having a reputable mechanic inspect the car before you buy it, particularly if you’re buying second-hand.

Yes, there’s a cost involved, but a pre-purchase inspection could save you thousands if it uncovers a problem you weren’t aware of.

Ask the mechanic to check the overall condition of the vehicle, including its safety features, brakes, tyres and engine.

2. Check there’s no money owing

Before buying a used car, check that there’s no outstanding finance or other interest registered against it.

You can do this through the Personal Property Securities Register (PPSR). For a small fee, you can order a PPSR Certificate, which provides information about the vehicle and any security interests registered against it.

It’s a small step that could save you from a very big headache.

3. Work out how you’ll pay for it

If you need finance, it’s worth getting your numbers sorted before you start shopping.

At Bank of us, we can help you work out your car finance options that fit your budget.

If you're buying through a dealership, you don't need to get finance through them. It might be more convenient but there may be costs. Things like balloon payments or residual payments at the end of the loan period can be substantial. Understand the interest, fees and total loan cost.  

Think about the value of the car and the cost of the loan- cars usually lose value over time. Look at the value of the car and calculate the total amount you'll pay over the loan term. If you need to sell the car to clear the loan, the sale price may not cover what you still owe. So you could still be paying off the loan after the car has gone.  

4. Get the right insurance

Before you drive your new car home, make sure you have the appropriate insurance in place.

Comprehensive car insurance can help protect you financially if your car is damaged, stolen or involved in an accident, depending on the cover you choose.

We can also help with your insurance through our insurance partner, CGU.

5. Budget for the ongoing costs

The purchase price isn't the only cost to think about.

Make sure your budget allows for things like:

• registration
• insurance
• fuel or charging
• servicing and maintenance
• tyres
• roadside assistance, if you choose to have it
• unexpected repairs.

It’s worth adding these costs up before you buy, so you know what the car is really going to cost you.

6. Give it one last check before you drive away

The big day has arrived! Before you drive your new car home, take a few minutes to check everything is as expected.

Make sure:

• the car’s make, model, year and month of manufacture match the paperwork
• there’s no new damage or defects
• you have all the keys
• you receive the service history and log book, if applicable
• you have the owner’s manual
• any agreed repairs or extras have been completed.

If something doesn’t look right, speak up before you take the car home.

Ready to hit the road?

Buying a car is a big decision, but doing your homework can help you feel more confident about what you’re buying and what you can afford.

And remember, the cheapest car isn’t necessarily the cheapest car to own. Taking the time to look at the bigger picture can help you choose a car that works for both your lifestyle and your budget.

This information is general in nature and does not take into account your personal circumstances, objectives or needs. You should consider these factors before acting on any of the information provided.

Please note this information is general in nature and does not take into account your personal circumstances or objectives. You should consider this before acting on any of the information contained.

#Bank of us ABN 32 087 652 088, AFSL 236870 acts under its own AFSL and under an agreement with the issuer Insurance Australia Limited ABN 11 000 016 722, AFSL 227681 under the CGU brand. Any advice provided is general advice only and does not take into account your individual objectives, financial situation or needs (your personal circumstances). Before using this advice to decide whether to purchase a product, you should consider your personal circumstances and the relevant the Product Disclosure Statement and Target Market Determinations from CGU Insurance.

Bank of us does not guarantee any claim or benefit payable under the insurance policy. We receive commission on insurance products details can be found in our Financial Services Guide