Let's discuss the essential steps to smart car financing and ownership.
Step 1: Establishing a Savings Plan
Start saving – the earlier you start saving the better. Setting aside a portion of your income regularly has tremendous benefits. We recommend using a high-interest savings account to maximise your savings potential. And furthermore, will look great to any lenders who may take a look at your recent banking conduct.
Step 2: Creating a Realistic Budget
Understanding the importance of budgeting is vital to not only any future car purchases but to your overall financial position. Review your monthly income and expenses, and highlight any areas where you can cut back, save more, and allocate funds to future car-related costs.
Step 3: Best Banking Practices
We recommend setting up a separate bank account specifically for car-related expenses. This dedicated account ensures that the money earmarked for the car remains untouched for other purposes.
Step 4: Understanding the Total Cost of Car Ownership
Break down the total cost of owning a car beyond the purchase price. This includes insurance, maintenance, fuel, registration, depreciation and unexpected repairs. Knowing these costs upfront helps in planning and avoiding financial surprises.
Step 5: Researching Loan Options
Explore various financing options and educate yourself about interest rates, loan terms, and deposits. A well-informed decision at this stage can save money in the long run.
One of the biggest mistakes people make when searching for the lowest rate and repayment is applying to multiple lenders. It might seem like a good idea, but here’s the catch.
Each time you apply for a loan, it generates what’s called a “hard inquiry” on your credit report. Too many inquiries will lower your credit score and affect the rate and repayment options a lender can offer you. Your credit score is important – so it needs to be protected. If you’re unsure of the best practice to compare rates, LoanHaus can help you! We have access to a network of over 30 lenders to do all the research for you without negatively impacting your credit score.
Step 6: Choosing the Right Car
Selecting a car that aligns with your budget and lifestyle is very important – make sure to keep in mind the value of reliability, fuel efficiency, and potential resale value when looking at any vehicle. Remember to keep your options wide – look for vehicles from dealerships, private sales, or auctions for more variety and selection.
Step 7: Get a history report check
Services like Car History are your heroes in uncovering a used car’s history. Car History gives you access to a PPSR Certificate and information about the vehicle including but not limited to: Current vehicle valuation and odometer reading comparison/ wind check, Past sales info, and any flood/ storm damage.
Step 8: Maintaining the Car
Regular car maintenance is essential for ensuring the longevity, safety, future resale value, and performance of your vehicle. This includes your routine check-ups, tyre rotations, battery care, oil changes and addressing any issues promptly. Remember to review your ‘owner’s manual’ for more information regarding your vehicle’s maintenance.