New Car Finance

When you decide to treat yourself to a brand new car, chances are you’ll need a little help from a bank or lender to make the purchase.

When you start dreaming about that new car smell and the gentle purr of a brand new engine, you’re probably not really thinking too much about how you’ll actually pay for your new wheels.

If you haven’t considered new car finance before you head into the dealership, you’re leaving yourself vulnerable to decision fatigue and the car salesman’s finance options.

This could cost you hundreds or thousands of dollars extra.

Getting a New Car Finance Pre-approval

Most lenders are happy to pre-approve an easy car loan before you find the car that you want to buy. That way you know exactly how much you can afford to spend before you go shopping.

Once you find your perfect car, it’s as easy as sending the details through to the lender to settle the loan and finalise your purchase.

New Car Finance Tips from RACQ

The RACQ have prepared a handy video that covers some of the key things you want to consider when you buy a new car:

  • Safety: these days you shouldn’t compromise on safety - especially if you’ve got a family. Look for a car that suits your needs and has a 5 star ANCAP safety rating.
  • Budget: Once you start to look for a car it’s easy to get caught up in the excitement of getting a really cool car, or something that’s fun to drive. Your car costs (the loan payment PLUS running costs) shouldn’t exceed 25% of your monthly income.

    It pays to think about the bigger picture - once the new car fun wears off, is the vehicle going to be practical? Will it make your life easier, or create more trouble than it’s worth? Can it hold your gear, get into that tiny parking space, or navigate off-road comfortably?

  • Running costs: unfortunately, the car loan payments are only one part of what it costs to own a car. You also need to allow for fuel, registration, and maintenance.
  • Insurance: if you buy a popular model, your comprehensive insurance will be cheaper.
  • Resale value: The biggest cost of buying a brand new car over a used car is the depreciation that you’ll see. To maximise resale value when it’s time to change your car, you'll want to stick to popular (and yes, boring) colours like white, grey or black.

Nail the Buying Process

With the amazing resource of the internet, you won’t need to search through the newspaper or travel from car yard to car yard to choose the make and model of car you want to buy. You can make most of the tough decisions right from your own couch.

Here’s a useful guide to starting the process of buying a new car:

Infographic on the Car Buying Process

What’s a ‘factory bonus’?

When you’re shopping for a brand new car, you may find some dealer’s offer a ‘factory bonus’. This is a pretty simple concept - it means that the dealership is trying to shift existing stock, so they have a bit more room to negotiate the price of the car.

You could score a discount on the recommended retail price, cashback offers, or third party deals like free fuel or store credit at a mechanic or auto store.

Extended warranty: is it worth it?

Nope. More than half of people who choose to purchase an extended warranty report that they wouldn’t do the same again.

Usually you’ll spend less than this on repairs for your new car during the time period it covers. You’d be better off keeping the money in a savings fund so it’s there if something unexpected does go wrong - call it your emergency fund - and earn some interest on it.

Is the grass greener overseas?

Wondering if your new car price stacks up compared to if you bought the same car overseas? Check out this cool comparison charts - Australia is cheaper than the US or UK, especially if you take average annual income into account.

You can also compare the cost of the car to everyday items overseas like a coffee, a Big Mac or a litre of milk.

7 Essential Features for Your New Car

If you’re financing a new car, you can afford to be particular about the features and latest technology that’s included - especially when it comes to safety.

Here’s some features we think are must haves in all new cars:

  1. Bluetooth and USB

  2. Because nobody uses CD’s anymore.

    You’ll want to check to see if the bluetooth connectivity can support music streaming and connect your phone for calls while driving.

    It also allows you to use your phone as a GPS unit via an app like Google Maps or the iOS maps, saving you an additional purchase. Your app will update for free, unlike a traditional GPS unit, for which you’ll have to pay for map upgrades when major changes occur.


  3. 5 star ANCAP star safety

  4. We did mention this above, but it’s worth a second look. With so many popular cars now getting the full 5 star safety rating (which focuses on passenger safety) you’d be crazy to settle for less on a brand new car.


  5. Spare tyre

  6. Car manufacturers are all about creating space - but at the expense of a full-size spare tyre, or even a spare at all, we don’t think it’s worth it. Some cars will have a skinny ‘space saver’ tyre or maybe even just an inflator kit.

    Why do they switch out a decent spare tyre? Fuel economy - to get a better economy rating on the vehicle. But in the real world, 20kg for a full-size tyre will have a negligible difference on your fuel consumption.

    Your car dealer isn’t obliged to mention this so it pays to find out before you find yourself stranded somewhere with a flat, and limited to 80 kmph to limp to the nearest tyre repair centre.

    If you make it a sticking point, you should be able to get a full-size spare for little or no extra cost.


  7. Sensor key

  8. No more scrambling to find keys in your handbag or pocket if your hands are full or its raining - a sensor or ‘proximity’ key will allow the door to open when you touch the driver’s door as long as the keys are nearby.

    Likewise, you’ll be able to start the engine at the press of a button - no need for a bulky keyring banging against your leg as you drive.


  9. Reversing camera and sensors

  10. Take the guess work out of tight parking spots - and know the exact location of the neighbors cat too! Reversing cameras are now found on city runabouts as well as larger SUVs and family cars.

    Do some research before you buy as some cameras still have blind spots, and others will work better at night.


  11. 5 year warranty

  12. Despite being introduced way back in 1999, these are still not the market norm - but with 4 or 5 year warranties being offered in select sales campaigns in the last few years by Hyundai, Kia and Mitsubishi, it’s time that Holden, Honda, Ford and Suzuki came on board more consistently.


  13. Automatic headlights

  14. Don’t be that driver cruising around at dusk with no headlights on. With auto headlights, leave the switch in the auto’ position, and the lights will come on automatically when it gets darker.

    This means that they’ll come on if you enter a tunnel or undercover carpark. It’ll also save your battery in case you forget to turn them off.

If you’re ready to find out more about new car finance, you can discover some of the finance options here:

Don’t worry if you aren’t sure about your credit history, or you are working casually - we can probably still help you find a great new car finance deal.

If you want to speak to a new car finance broker, call 1300 722 210 and we’ll give you some new car finance options to start the journey to your new wheels.

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