In the midst of an uncertain time, you may be finding you have a lot more time on your hands. If your circumstances have changed in the current climate, it may not be the best time to buy a car, but there is still plenty you can do now to prepare, so that you’re ready when the time is right. If you’re ready right now, great! There may be even more opportunities in the current market for you to snag a bargain. Either way, make sure you’re across these quick tips before you take the plunge.
Choose the right car
Making a car purchase can be a big commitment, so you want to be sure you’re making the best decision for you about which car to buy. What will you be using it for – weekend getaways, transporting your family or just zipping around town? It’s important to understand what kind of travel your car will be primarily used for so that you can select the right vehicle. Think about body shape (hatchback, SUV, station wagon, sedan), whether you require a new or used model, as well as what extra features you may need (sunroof, GPS, Bluetooth capability, seat warmers, extra boot space).
Considering the ongoing cost of running a car is vital too – if you’re currently whizzing around in a two-door coupe but looking to move up to a 4WD, remember a bigger engine means more money on fuel. Think about the cost of repairs and servicing while comparing car models too - these ongoing costs can easily be overlooked in amongst the excitement of investing in a fresh whip!
Consider your budget
Setting a budget is key and will help you know that you’ve purchased something you can afford, especially if you choose to take out a loan. Sure, it might be cool to have a sunroof for summer days or a drop-down screen in the back for the kids, but is it absolutely necessary? Some features might be non-negotiable for you and that’s okay, but if it’s pushing the cost outside of your expected budget, maybe consider how you can save money elsewhere. Some car selling websites allow users to filter by feature, which can be particularly helpful in your purchase pursuit. Setting a maximum car price on your search can also help to remove the temptation of splurging by filtering out vehicles beyond your budget.
Consider opening a bank account for your car, in the same way you might for a child or a pet! Splitting your expenses into smaller, bite-sized chunks, can help take the stress away when having to go in for a service or fill the tank. Transferring a pre-determined amount into your car account each pay can help you manage the ongoing expenses such as registration, insurance, servicing, fuel and tyres.
Get your finances in order
Depending on your individual circumstances, it could be the right time to think about saving a bit extra. With COVID-19 raining on our social lives’ parade, you may not be using all of your allocated spending money each pay at the moment. If this applies to you, try setting up an automatic transfer on pay-day so some extra money goes straight into your savings account – it will be moved across before you even have a chance to miss it! Staying at home in the current climate may not only be beneficial for your health, but for your bank account too.
If you’ve got a bit of savings, but not quite enough for what you’re after, you can start thinking about car loans. Financial institutions will take into account your income and expenses, so having a history of responsible saving and living within your financial means will be looked upon favourably when applying for a personal loan.
Car insurance is a big part of the car buying process. You need to get quotes and figure out what’s right for you and your situation, so comparing prices and policies can be a great place to start. For example, some policies may come with windscreen protection as standard, whereas others may offer it at an extra cost. Some policies cover multiple drivers, while others will only cover the main, listed driver.
Along with the type of car, your age, gender and claim history can all impact your quote, so do your research. If you’re under 25, or if you need to add younger household members to your cover, you could be paying a lot more to insure your car. Less experienced drivers can be riskier to cover and therefore, policies that do cover them are likely to come at a higher cost. Some insurers won’t cover a vehicle with a V8 or a turbo engine if it’s being driven by an inexperienced driver, so while something sweet and speedy under the hood might seem appealing, it may not be realistic option.
This article is for information only and is not intended to provide financial product advice. Any advice is general and does not take account of your objectives, financial situation or needs, so you should consider if it is appropriate for you. Before acquiring any products from us you should read the product disclosure statement or other applicable disclosure documents and terms and conditions which are available on our website. People’s Choice Credit Union does not guarantee the benefits payable under an insurance policy or the repayment of any premium.