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Buying a car

Considering a new car? Read this before you walk into the dealership


The car dealership: home of the sharply-suited salesman trying to sell you a car before you can walk out the door. Is it really like this?

Don’t be fooled by the urban myths. You can come out of a car dealership experience scoring a great deal on your new wheels. You just need to put yourself in a strong position and be prepared for the purchase. Here are a few key pointers from our car buying specialists that should help.

Know what you want

There’s no point negotiating a car sale without first having a clear picture of what you want. With your research done, you’ll save time and know how much your chosen car model is worth and that it’s just what you need.

Paul Johnston is a Corporate Partners & Motor Dealers specialist at Suncorp Group. In a previous life, he worked at car dealerships – so he understands the process inside and out. He suggests thorough preparation: “narrow down the choice of vehicle so you don’t get overwhelmed by dozens of makes and models."

“Then think about how you intend to pay for it – whether you’ll borrow, how much, where you’ll get the money from, how much the repayments will be – that way you have a point of reference.”

If you’re replacing an existing car, take time to think about whether you’ll trade it in or sell it privately, and do your research to work out what it’s valued at. For a successful trade in, you’ll need to understand the realistic value of your current car. You can find this information online by researching similar makes and models. Keep in mind these are the “asking prices” and not necessarily the selling price. Condition and mileage are key factors in your car’s value.

You should also consider how long you plan to keep your new car. If you’re likely to have it for more than 5 years, then factors such as compliance plate dates are of less importance. Think about annual mileage too. Do you want to trade in every three years (where resale value becomes more important) or are you planning on keeping the car for its useable lifetime?

Paul advises new buyers, “If you don’t have much experience in buying cars, you can get caught up in the emotion. A significant percentage of customers buy a different vehicle to what they set out to purchase.”

When it comes to the car salesman stigma, Paul firmly believes that times have changed: “The idea that car salespeople are dodgy has eroded significantly over the last ten years. This stigma can still sit in the customer’s mind, but it isn’t really the case anymore.”

Plan your finances

If you’re preparing for a new car purchase, finance is at the crux of it. There are plenty of decisions to be made: have you saved enough to pay in full or will you apply for a loan? Will your employer or business be contributing to your car costs? Do you need to compromise or can you afford your dream car?

Kylie Fletcher is a specialist on financing car loans, with experience working with both a major car financial services company and Suncorp Bank as a Product Manager. She points out a few customer pitfalls when it comes to car loans and has some helpful tips to keep your finances on track.

Her first tip is to understand what you can afford. To do this, calculate what your loan payments will be, factoring in interest and fees. Kylie says, “People regularly misunderstand fees. They tend to focus on the interest rate, which is only one factor in the cost of your loan. You also need to consider the establishment fee and the account keeping fees. These can vary enormously from loan to loan. Be careful you don’t overlook them.”

With a car loan, it pays to put your Nostradamus hat on and think about the future. Kylie suggests being aware of early exit payments: “Think of it like your mobile phone plan and how expensive it can be to get out of your contract early. It can be a similar experience with your car loan if you’re not careful.”

Finally, Kylie recommends obtaining a full understanding of your obligations and potential fees before signing on for a balloon payment. A balloon payment – where you lower your repayment fees in exchange for a high lump sum payment due at the end of the loan – can be a suitable option for customers in some circumstances, especially if the value of your vehicle exceeds the balloon – though this is rarely the case.

Be prepared to walk away

Steve Green, Partner Success Manger at Suncorp Group previously worked in the car industry for over 16 years so he knows a thing or two about the car buying and leasing process. Working for a major car leasing company, he looked after large corporate and government accounts but he’s also sold cars directly to new buyers.

To help plan your visit to the dealership, Steve has some helpful advice: “The start of a new calendar year through to February and early March are generally good times to buy a new car because the dealership will be trying to clear the previous year’s compliance plate models.” This, and the lure of an increased bonus for the dealer could mean some cash savings without having to haggle as much.

Steve’s advice is to stick to your budget. “You have to be prepared to walk away if the deal doesn’t meet your requirements. Remember that the dealership wants your business, but at the same time, it’s not all about the price.”

Try to keep realistic expectations while playing it a little bit cool. If you’re offered a sale price of $35,000 and you counter at $33,000, it’s best to wait for the dealer to respond before going any higher.

Being prepared before you step into a dealership is the smart way to set the wheels in motion. To discuss your personal finance options with a lender, call Suncorp Bank on 13 11 55 or visit a nearby store.


Loans are provided by Suncorp-Metway Ltd ABN 66 010 831 722 Australian Credit Licence 229882 (“Suncorp Bank”) to approved applicants only. Terms, conditions, fees and charges apply and are available upon request.

The information is intended to be of a general nature only. We do not accept any legal responsibility for any loss incurred as a result of reliance upon it – please make your own enquiries.

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