Colin Bower, one of our vehicle finance specialists in the Bay of Plenty shares his top seven tips on everything you need to know about making a new car purchase.
1. Identify your criteria (must-haves): size, seating, power, economy, image, budget and price-range/payment structure. Once you’re clear on what you want, write it down – remember, when you’re writing your list resist the temptation to get hung up on brands…for now.
2. Go online and make a short-list of vehicles that match your criteria, and most importantly your budget. I’d recommend visiting www.lease4u.co.nz where you’ll find a number of useful tools with links to most makes and models, comparison charts, fuel economy ratings, a finance calculator, investment calculator, current NZ interest rates and different types of financing and benefits to name a few.
3. Once you’ve defined your budget, and before you go test-driving vehicles, pre-arrange your funding from a reputable, convenient and competitive source. This is now easier than ever with some lenders/brokers offering systems that enable you to calculate and approve your own finance online. Check out our website for all our latest lease pricing, which is fully transparent online and to obtain a quote and a information.
4. Now for the exciting part! It’s time to start test driving the vehicles on your short-list. Advise the seller that you have your funding already in place (and are essentially a cash buyer). If you have decided to lease, the lease company or broker should advise you where to go to test drive each vehicle, and get the best customer service. Note; the quality of personalised service in the motor industry still varies wildly, and some dealers will try to talk you into their own finance arrangements, in order to substantially improve their margins. Be aware that some will also try to hold back as much of the available discount margin as possible, which is only natural because contrary to popular belief, dealer margins (particularly on new vehicles) are quite slim. In the case you choose to lease, make sure the full manufacturers lease company discount entitlement has been passed on to the lease company (lessor) which in turn lowers your payments, and the impact of depreciation. Note;many new car dealers rely on manufacturer target incentives/holdbacks to make the deal viable/profitable.
5. Get independent advice before making your final choice. There is a wealth of information online for road tests and vehicle comparisons to assist you as you make yourfinal choice. Ask friends and associates who have recently purchased about their experiences, but as you do so keep in mind that individuals have their own personal preferences and brand loyalty for a range of reasons that may not suit your own requirements and desires. If you’re feeling confused, I am happy to help you by drawing on my fifty years of experience as an dealer, industry knowledge and role as a self-proclaimed ‘petrol-head’ – and my advice to you is free.
6. Do the Pros and Cons. When you think you are ready to make your final decision, take the emotion out of the equation and bring out a blank sheet of paper. You have probably heard the saying that, ‘buying a car is one of the biggest financial decisions (after a house) that you are likely to make’. Therefore, before taking the plunge take ten minutes and write down a costs/benefits analysis andweigh up the pros and cons.
7. Think like an accountant:
- Know that whatever your final choice of vehicle, it will devalue at the rate of approximately 50% every three to four years.
- Do not use an asset that is increasing in value (home, business, and investment funds) to secure a depreciating asset. The vehicle should provide its own security and leave your other lines of credit secure. This will also ensure the finance rate is locked in for the period, and that you pay off depreciation as you use the vehicle.
- Where possible, take advantage of any discount entitlements available by utilising the buying power of a major corporate or lease-company or broker.
- Claim everything that you are entitled to claim. There can be numerous car ownership benefits that you may not be aware of.
Now you’re armed with everything you need to start your car search you’ll be off on your new vehicle journey in no time! If you have any questions or would like to find out more, feel free to give me a call on 027 532-7348 or send me an email on firstname.lastname@example.org