How to buy a car

Ferrari, Maserati, Lamborghini, Bugatti – which one to choose?  Buying your dream wheels is an exciting experience, no doubt all the more thrilling if you can afford one of these beauties.

However, this time around, it’s likely that you’ll have to settle for something a trifle less salubrious and – sigh – more in your price range.

It’s time to swap desire for good old sensibility – for now at least. So in order to buy a car with your head, not your heart, ask yourself these fundamental questions:

  • How will you most use your car? For example, city commuting, long-haul driving, ferrying kids around, driving to University…
  • What type of vehicle best suits your needs? Once you identify how you will use the car, it’s easier to narrow down the type of vehicle that would suit, for instance, two or four-door sedan, hatchback, utility, people mover, sporty convertible, SUV etc.
  • What is your budget? For most people this is the reality check. Just because you can borrow a large amount doesn’t mean you can comfortably pay it back. Try our personal loan repayment calculator and play around with a number of configurations to give yourself an idea of what repayment level you are comfortable with.

After you’ve worked out these basics – and put a Bugatti on the back burner for now – make a shopping list of loans that will best suit you. The CANSTAR personal loans star ratings is a great place to start.

Obviously, a low interest rate is a must-have but don’t forget to factor in fees and charges. Application, or establishment, fees can be a hundred dollars or more. Then there are upfront fees, monthly fees, and other small costs. All these small bits and pieces add up.

Features offered by providers of personal loans

Feature Number of providers Proportion of providers
Extra repayments allowed 9 100%
No early repayment penalty 7 78%
Redraw facility available 2 22%
Top up facility 6 67%
Repayment via branch 9 100%
Repayment via telephone 8 89%
Repayment via internet 7 78%
Repayment via direct credit 7 78%
Repayment via BPAY/BillPayment 6 67%

Source: Canstar Personal Loan Star Ratings, November 2014

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