With costs of living rising, we want to make the most of our hard earned. Though it may be tough at the moment, there are ways of financing a new car without outlaying too much now and into the future. Here are the most affordable ways to get into a new car, as well as save on finance.
Setting a budget
The first thing you should do is always set a budget and stick to it. Eliminate any car you can’t afford by figuring out how much you need to pay each month not only in finance repayments, but fuel, registration, insurance, and maintenance. Once you have a figure you’re comfortable with, you can look for cars that will suit now and into the near future (e.g., don’t buy a two door coupe if you’re planning on starting a family.)
Buy a demo or certified used
To make your dollar go even further, considered buying a demonstrator (demo) or certified used car. Certified pre-owned vehicles are factory reconditioned, have an extended guarantee, and are typically three years old or fewer. Demo cars are “test drive” vehicles that are no older than six months and are available for much less money than brand-new vehicles. They’re cheaper than factory fresh, don’t depreciate as much, and come with all the guarantees and warranties that new cars have. A win-win!
Used, but with low kilometres
You can find the “unicorn” vehicle of your dreams with low kilometres (fewer than 10,000kms of use per year) on the clock if you’re willing to put in the hard yards in the car yard and in online classifieds searches. Some people simply just don’t like the car they’re in – or you can find ex-lease cars with super-low clicks on the odometer. Watch out for scammers though – they may advertise “too good to be true” offers on low mileage cars. If they ask for a holding fee or delivery deposits up front, walk away.
Save for a deposit
To save on interest, always have skin in the game. Just like a home, you should aim for a 20% deposit – or equivalent trade-in, if you have one. It might take a while to save, but you will thank your future self, as it reduces loan repayments and the overall amount of interest.
Find a cheaper loan – here’s how
Finding affordable car loans can take time if you’re looking at individual banks or lenders. The best route to go down is talking to a specialist car loan broker. A broker will have many banks or lenders at their disposal, and there’s a much higher chance you’ll find a loan that’s cheaper, more flexible, and better suited to your needs than simply approaching your bank. Brokers can also help out people who may have bad or impaired credit. If you’re ever unsure, just ask a friend or family member – or better yet, a financial adviser who can tell you what loan may be best for you. It could save you a bundle!
