What are the Real Costs of a New Car?
New Car Costs
Buying a brand new car is something that most Aussies will only do once or twice in a lifetime. When you get the latest model car with that new car smell, you want to have all your finances in order so that you're financially stress-free, and you can just enjoy your new ride.
When you purchase a brand new car, there's more to consider when planning your budget for your new car costs than just the car loan payments.
To make it easier to manage your new car costs, you can often bundle some of these into your car loan payments. That way you have less regular payments to worry about.
What new car costs can I add to my car loan?
You can usually add some of your new car costs to your car loan so that it's easier to budget with a single payment. The costs that you can add to your car loan will depend on the lender that you select, and the loan type that you use to buy your new car.
So which costs can you add to which type of car loan?
The costs of running your car, like fuel, servicing, and tyres, will not usually be included into your car loan, so you'll need to make sure to budget for these.
There is one exception, and that's a fully-maintained novated lease. Under this arrangement, some of your running costs will be included in your salary sacrifice car loan payments.
When the car you're buying needs to be registered at the time that you buy it, or if registration fees are due within three months, you can usually include these new car costs in your car loan.
Remember that you'll need to pay the registration the next year around.
You can usually include your compulsory third party insurance (CTP) and comprehensive car insurance, required by the lender, for the first year of your car loan.
Be aware that the rules around CTP Insurance are different across the Australian States.
In Victoria, South Australia, Northern Territory, Western Australia and Tasmania, there is just one insurer for accident compensation, and your CTP insurance will be paid as part of your car registration.
In New South Wales, Queensland, and the Australian Capital Territory, there is a choice of CTP insurer, and different providers may have different prices.
If you take out consumer credit insurance or income protection insurance for your car loan, then these new car costs can be included in your loan payments. This type of insurance protects you if you are out of work and unable to meet your car loan repayments. It means you won't lose your car because the insurance covers the remaining cost of the loan amount.
You can also include GAP insurance into your car loan amount. GAP insurance provides for a lump sum payment in the event that your vehicle is written off, and your comprehensive insurance cover doesn't provide the full remaining loan amount with their payout.
Stamp duty is a state government tax that's payable on an asset, including cars, motorbikes, boats and caravans. It's calculated as a percentage of the value or purchase price of the vehicle you are buying.
If you buy from a dealership, the stamp duty is usually included in the 'on-road costs' - so make sure the price you get is the final invoice price, including your stamp duty and other charges.
If you are buying from a private seller, you are responsible for registering the property transfer and paying stamp duty at your local motor registry.
You can either pay the stamp duty upfront or with most lenders you can include this new car cost into your car loan.
If you had a car loan that hasn't been fully paid on your old car, you could have 'negative equity' if you still owe more than you can get for selling your car.
You'll need to pay out this old car loan, whether you do that with cash, or by rolling the negative equity into your next car loan. If you're trading in your old car for a new car, you can make it clear to the dealer that a condition of your purchase is that the existing loan is paid out in full for the trade-in value.
If you've got an existing car loan, or you're looking to buy a new car using a car loan, get a quote for your next car purchase, including new car costs now.
When you speak to a Positive car loan specialist, mention the new car costs that you're hoping to include in your car loan, and they'll be able to give you an accurate quote for your total repayments, including any new car costs added to the purchase price.