The Real Costs of Buying a Car

When you are buying your first car or upgrading to a newer model, you need to look at more than the price advertised on the windscreen.

Important things to consider

– Finance – not all interest rates are the same

– A pre-purchase vehicle inspection is money well spent.

– A history report will give you peace of mind.

– Remember to factor in stamp duty, insurances and other on-road costs.

– Road-side assistance – smart thing to do

– Shop around for the best insurance deal.

What are your upfront costs?

Purchase price

The car will be determined by what you want and what you need and most importantly what you can afford. New cars are expensive , but cheaper to run and older cars are cheaper up front but may need more maintenance.

Car history reports and financial searches

For a small fee, a Personal property Securities Registry (PPSR) search will tell you if the previous owner still owes money on the vehicle. This is important because if they do – and they default on a secured loan – your car will be repossessed, even after you have paid good money for it.

For a larger fee you can purchase the car history report. This gives you not only the financial history, but, other important details e.g. an approximate valuation, odometer reading, it’s write off history important because of the floods in Brisbane and other parts of Queensland and if it has been stolen.

Stamp duty

Stamp duty is a one off cost, however, it can be expensive depending on the cost of the vehicle. Each state has it’s own way of calculating the stamp duty.  Beware some dealers add the stamp duty to the purchase price of the car.

What are your annual costs?

Registration

A large cost of on road fees is the registration of the vehicle. Factor in registration transfer and renewal if its about to expire.

Insurance

Insurance is one of those things you hope you need never use, however, it is something you should always have. If you take out finance on the car the lender insists you take out insurance. Third party insurance is compulsory and it advisable to take out additional insurance that will cover; fire and theft and accidents. It is also advisable to take out GAP insurance, this when you have financed the car and you owe more on the vehicle than it is worth.

Roadside Assistance

Roadside assistance is a service that helps when your car has broken down typically the RACQ here in Queensland

What are your ongoing costs?

Here are other important costs to budget for:

– Petrol

– Road tolls

– Servicing and maintenance

– New tyres

– Parts and repairs

– Loan repayments (if applicable).