Buying your first car is more than just choosing the make, model, and colour. You also have to spend time researching on car loans to find better interest rates than with dealer financing. Then, you have to get car insurance to register your car.
Say, you want to buy that brand new Audi for sale. What are your options to finance the purchase? How do you choose a model? What should you do after the purchase? The process of buying a car can be overwhelming, but don’t worry. Below we provided a quick guide to help you buy your first car.
Know your budget
The first thing to do is set a realistic budget for your new car. How much can you afford without stretching your budget? Determining your budget allows you to see how much you should loan and how much can you pay monthly. This will also determine the car you can purchase. As a general rule, you should only spend what you can easily pay over three years.
Understand your financing options
If you want to get better deals, take time to understand your financing options. While dealers offer financing options to purchase a car from them, it’s still best to contact your bank or apply for a credit union. The said alternatives can provide lower interest rates on car loans. Once you find the best financing deal that matches your maximum car-buying budget, have it pre-approved. A pre-approved loan makes it easier to negotiate to a dealer.
Consider down payment
Usually, a down payment is not required when you’re buying a new car. However, it’s a good idea to put down cash because of depreciation. Cars are a depreciating asset, which means it loses its value quickly. This can get you in an upside-down loan wherein you owe more money on a property than its worth.
A good rule of thumb is to put down 20% of the car’s purchase price to mitigate upside down loan. Also, the larger your down payment, the smaller your loan, and your monthly payments. This means less interest rate over time.
Find a car
Now that you settled your financing, it’s time to look for a new car. To find the right car for you, you have to identify your wants and needs. Think about why you are buying a new car.
Is it for your own use or for the family? How long do you plan to use it before replacing with a second car? Are you driving long mileage or short ones? What do you want your car to have? Maybe automatic sliding doors or leather upholstery? TV screens at the back or a good-sized trunk? From these wants and needs, assess the right type of car you can buy that’s within your budget.
Register your car
With the deal now closed, it’s time to register your car and transfer the title. Get a new title and license plates from the NZ Transport Agency. But before you do, make sure you purchase car insurance. While it is not compulsory in New Zealand, car insurance is recommended to protect you from the financial impact of vehicular accidents.
When buying your first car, it pays to have a more in-depth look at your finances to better be prepared with the responsibilities that come with your purchase. Once your finances are ready, it’s time to finally buy that Audi for sale you’ve been eyeing.