Financial Solutions

Buying a Car

Buying your first car can be daunting. Here is what you need to know.

1) Get the money sorted out

If you need a loan to purchase the car, it is best to arrange this first before falling in love with a car that you can't afford.

A loan 'approved in principle' gives you the indication of what you can borrow without having to formally provide paperwork until you've found the car. 

A loan 'approved in principle' has a shelf-life of up to three months, so you have time to do your car shopping and find the best one in your price range. Best of all, it will stop you getting locked into high interest rate finance contract at the point of sale.

2) What kind of car?

Consider:

  • How many people do you need to carry?
  • Where will it be parked overnight?
  • How many kilometres will you travel?
  • Is fuel economy important?
  • How much are the servicing costs?
  • How much will it cost to insure?

 3) What kind of loan can I get?

There are a few types depending on the car you are looking to buy and the collateral you have. Collateral simply means any assets you have to secure against the loan.

The interest rates are different for each of these:

Brand New Car - a new car can be used to 'fully secure' your loan. This means you get the lowest interest rate available for a BDCU car loan.

Second-hand car less than six years old - you can get a 'partly secured' loan. The interest rate is marginally higher than a fully secured loan.

Second-hand car more than six years old - you can borrow as an 'unsecured loan'. However, if you have other significant assets, these may be able to secure or partly secure the loan.

4) How much can I borrow?

There is a calculator on this website that allows you to work out:

  • the amount you can borrow
  • the length of the loan in years and months
  • the amount of your weekly, monthly or fortnightly payment.

To use the loan calculator, click here

5) Where to buy it

There are many choices: dealers, used car yards, auctions, private sales.

Whichever method you select, it's important to:

  • Be sure what kind of car you want.
  • Take someone with you who knows more about cars, or the buying of cars, than you do.
  • Take a test drive.
  • Shop around.
  • Stick to your guns. If you want the basic model car, don't be talked into an expensive audio system and fancy mags. All the extra costs can quickly add up.

Even though you may pay extra from a dealer there are some advantages:

  • Proof of ownership
  • Opportunity to trade in your old car
  • Option to negotiate a warranty

6) Get insured before you drive the car

Even though you will be excited about picking up your new car, make sure it's insured before you take it home.

More Information

Questions?

If you have any questions, please contact us.

 

This information is general in nature and doesn't take into consideration your objectives or needs. You should consider whether it's right for you personally. Terms and conditions, fees and charges apply and are available on application or request. Subject to lending criteria.

 

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