Buying a new car is a big step, and every now and then we’ve seen people realise too late that they’ve taken on a liability they can’t afford. Ideally, we never want that to be the case for anyone, which is why we’ve put together a list of quick, but effective financial considerations you should look over before buying that new set of wheels.
Take an objective look at your finances
The first thing you need to do is make sure that you can afford all the payments related to your upcoming purchase. Yes, this sounds obvious, but we’ve realised that many would-be buyers only look at their short-term financial position. Ideally, you should look at how you will fare financially over the next six months or more.
By doing so, you’ll have a much clearer picture of what to expect in terms of available funds over the long-term.
The costs related to buying a new car go far beyond its initial price. So, before you take the plunge, make sure you understand and can afford all the costs related to application fees, car insurance, and what your loan repayment terms and conditions are. If you have a clear picture of what to expect regarding your loan, you’ll have a much better chance of things going smoothly.
Costs on the road
Another hidden, but hard-hitting cost related to buying a new car in Australia, is the stamp duty. This payment is calculated according to the price of the car, which means if you buy a cheaper car, your stamp duty will go down accordingly. Plus, once you’ve hit the road you need to maintain your car, which requires regular servicing – not to mention the weekly or fortnightly fuel top-ups.
Before you sign on the dotted line, make sure that you take into consideration ALL the costs associated with buying a new car. If you would like more information or need help determining whether you can afford your next purchase, feel free to get in touch with us anytime.