How do car loans work?
Buying any car is a big decision; from the finances to the features, it’s a sea of information to wade through. While new cars are all the same off the factory line, used cars are different and so it’s worth getting up to speed with what to look out for.
However, there’s a few things to get in order before your search to find your perfect pre-loved car can start. Here’s some helpful tips to drive your search and get you moving.
The first thing to do when buying a car is set yourself a budget based on the maximum amount you are willing to pay for your car. You may seek financial support in the form of a loan, so make sure to speak to your bank first to understand how much you could borrow.
Remember, a car has running costs too, so make sure that you’re considering costs such as fuel, registration, maintenance and insurance into your budget too.
Next, it’s time to research. When looking for your used car, consider what car would suit your needs, and which fits within your budget. Make sure to assess your most affordable options based on how you will use your vehicle, for example fuel economy can be a great deciding factor.
Unlike with brand new cars, there are different ways for you to purchase a used car, each with benefits:
With private sellers, you benefit from having in-depth and personal information from the car owner, and the ability to inspect it at your leisure. Direct contact with the seller means that you’re in a better position to haggle on the price, too.
An auction means that you need to be prepared with your maximum budget in advance, and be clear that once the auction is won, the car is yours without conditions. Inspections may be scarce, so ensure you are comfortable with the car’s condition and you’ve got your purchase funds sorted before jumping in.
You can also buy a used car from a car dealer, however these can come at a higher price. Purchasing from a dealership comes with benefits though, including safety inspections and a cooling off period to finalise your decision.
When you start finalising cars that you like, it’s time to take a closer look. Always make sure to inspect key features and ask for background information to make sure your decision is a good one:
Organising car insurance once you’ve purchased but before you drive away is another important aspect of owning a vehicle.