Home > Car Loans > Tips for Safely Buying a Car

Tips for Safely Buying a Car

Jacaranda Team

Jacaranda Team

March 1, 20217 minute read
The Jacaranda team works hard to ensure the quality and accuracy of our articles.

Quality Checked

When it’s time to go car shopping, it’s important to know what you are doing to ensure you are getting the best deal. What’s the right time to buy? Should I buy a car privately or through a dealership? Do I need insurance? These may all be questions on your mind. Whether you purchase a brand new or a used car, there are a few tips you can consider for buying a car safely before you sign the dotted line.

On this page:

    Look out for car sales

    There are typically five times of year that car sales occur: . 

    1. End of month: Dealers may have been pushing for a particular sales target or must push through a certain volume of car sales each month. It is possible to find a dealership with a sale on at the end of the month. 
    2. End of financial year: With the new financial year rolling in, dealers often want to hit their targets and boost financial year sales figures. This can result in sales and discounts, or bonuses like extended warranty, roadside assistance or free accessories. 
    3. End of the year: December is usually a good time to buy because dealerships grow increasingly motivated to sell cars that were built in that year, because they will soon become last year’s model. 
    4. The new year: Instead of the end of year sales, waiting until the new year usually results in early-year plate clearance sales. By the time February rolls around, you can likely get a car built the previous year at a discounted price.
    5. Model run-out: If you know how long a model has been on the market or when a new or updated version is due to be released, you have increased negotiating power. If a car model is three to four years old it is likely due for an update; if a car is six or seven years old, there may be a new model coming. Both of these situations give you the opportunity to bargain with the dealer.

    Choose the right car

    If you only use your vehicle to commute in metropolitan areas, you will likely have different needs to someone that often offroads or has a large family. Research the kind of car you want and shop around for a car that best fits your needs. If you have your heart set on a certain brand, visit multiple dealerships and use an online car valuation calculator to get an accurate price guide. Is it in your price range brand-new? Is there an older version that better suits your budget? Does it drive well? Ensure you have asked yourself these questions before you enter a dealership where you will often be pressured to make instant decisions. If you are purchasing from a dealership, take the car for a test drive to make sure you enjoy the way it drives.

    Use the right finance option

    Cars are expensive. Purchasing a car outright may not be possible, and may not be the best financial option for you. If you don’t have thousands of dollars to spare, you may consider using car finance. There are a few options available to you.

    Car loan

    One of the most common forms of car financing is a car loan. A car loan allows you to purchase an amount of money to fund a new or used car to be repaid back over time with interest. There are an array of lenders with different car loan options, so it’s important to do your research to find the best deal. For example, Jacaranda Finance offers car loans for both new and used cars up to $35,000. 

    Chattel mortgage

    If you will be using the vehicle for more than 50% business purposes, you could apply for a chattel mortgage. Chattel mortgages often come with very low interest rates and flexible terms, and depreciation costs can be tax deductible. 

    Dealer finance

    If you purchase through a dealership, most dealers have a partnered lender that they offer their finance deals through. They handle all of the negotiations and paperwork which can save you time and hassle. However, though it may seem more convenient, it is important to still do your research about other options. This is because often dealer finance can be more expensive than regular car loans.

    Car lease

    If you don’t want to purchase a car, you can consider a car lease. Usually, leasing can be cheaper than buying, as you are only repaying the difference between the car’s value when new and the car’s residual value. The car’s residual refers to its value at the end of your lease. However, you will never own the car, which is something to consider. It can be a good option for a brand new car that you would not have otherwise been able to afford as the monthly repayments are less.

    Get an independent inspection

    Before you purchase any vehicle, brand new or used, ensure that you have the car inspected by a qualified mechanic. A safety certificate or statutory warranty is not the same as a physical inspection and should not be considered a substitute. A mechanic can pick up on any problems with the car that may not have been disclosed or known about, and can give you the peace of mind that you will be safe driving your new vehicle. You may be able to word into your contract that the purchase is subject to a successful independent inspection and that, if you are unsatisfied with the results, you have the right to not purchase the car. 

    Put everything in writing

    Salespeople can sometimes make promises they cannot keep. If you have been promised a warranty, free additions or any guarantees, ensure that you get everything in writing. Any deal you have negotiated that is not in writing is difficult to enforce. Put everything in writing, just to be safe.

    Conduct background checks

    If you are buying privately, check the Personal Property Security Register to ensure there is no money owing on the vehicle and that it is not listed as stolen or written-off. This search will also provide you with information about any of the car’s features, to ensure that it is the correct vehicle. If there is any money left owing on the vehicle, steer clear of purchasing it without a guarantee that this money will be paid off before it is transferred over to you. This is because you will not get a clear title to the vehicle and it could be repossessed. 

    Read your contract carefully

    If there is anything you are unsure about on your contract, or anything that you did not agree to, never sign your contract. Ask as many questions as you need to; renegotiate any terms that you do not agree with or see fit. If you are not familiar with contracts or contract wording, show the contract to someone that may be more knowledgeable. 

    If you are purchasing a new vehicle, specify the colour and delivery date you want on the contract. In this way, if the dealer does not deliver on these terms, you have the option to terminate your contract and have your deposit money refunded, especially if it cannot be remedied by the dealer. 

    Have copies of all your important documents

    Always ensure that you take copies of the applicable documents, including the contract, warranty documents and the safety certificate. Pay attention to the date on the safety certificate, ensuring that it is in date and has a sufficient remaining life for the registration transfer.

    Insure the car before you drive it away

    While all cars come with Compulsory Third Party insurance (CTP) as part of it’s registration, this only covers personal injuries sustained by passengers in your vehicle, not at the fault of the driver and other users. It does not cover any damage to your vehicle. Consider taking out comprehensive car insurance that will cover you from the instant you obtain your vehicle, so that if anything ever happens, you are fully insured. 

    Car loans with Jacaranda Finance

    Jacaranda Finance offers flexible car loans for both new and used cars. We offer loan options from $5,000 to $35,000, to be repaid over 1 to 4 years, with competitive interest rates. We are an online lender, meaning that from application to approval, everything is done online. We specialise in fast loans and endeavour to get back to you with a same-day loan outcome. We are the first lender in Australia to offer 60-second payouts; we are that fast!

    Copyright © www.jacarandafinance.com.au Jacaranda Finance Pty Ltd ® ABN 53 162 078 195 Australian Credit Licence 456 404, Pawnbroking License Number 4221738. The information on this web-page is general information and does not take into account your objectives, financial situation or needs. Information provided on this website is general in nature and does not constitute financial advice.

    Jacaranda Team
    Jacaranda Team

    Written by Jacaranda Team

    Reviews don’t lie 🌟

    Reviews current as of June, 2021.

    Our low rates

    Our low rates

    💰 Personal Loans starting from 8.69% (12.05% p.a. Comparison Rate)

    🚗 Car Loans starting from 5.29% (5.84% p.a. Comparison Rate).

    We never charge early repayment or exit fees.

    Apply Now 🚀
    Existing client?

    Existing client?

    Manage your loan easily in one place.

    Log In
    Had a good experience?

    Had a good experience?

    Share the love by referring a friend now and receive up to $100 of free credit 💸

    Refer a friend

    Need a hand? 👋

    Jacaranda is 100% online. So, we do not accept applications over-the-phone. However, our friendly team is more than happy to answer any questions you may have.