While we spend plenty of time surfing the net, checking out the dealerships and haggling for a good price when we buy a new set of wheels, perhaps we should spend more time working out the ongoing costs. Here are a few quick things to think about.
The car loan
If you’re looking to finance your car via a loan, don’t just sign up for the first deal you’re offered. At the moment on CANSTAR’s database, a secured personal loan interest rate can vary from a low of 10.50% to a high of 17.95%. Here’s an example of the difference that could make to your monthly repayment, on a 5 year loan:
|Loan amount||Interest rate||Monthly repayment||Total payment over 10 years|
The cost of insurance will depend on both the type of car you buy, where you live and your own driving record, but as well as shopping around there are other ways to help reduce your costs, including:
1. Avoid add-ons. Additional options in your insurance policy (for example, no-excess windscreen replacement) cost extra. Ask yourself whether those bells and whistles are really worthwhile.
2. Don’t add-on to your car, either! Modifying your vehicle to improve performance, increase power, or change the handling can also increase your insurance premiums. Leave it alone!
3. Shop around! Prices and value can vary significantly between insurers, so get a few comparison quotes.
4. Have a higher excess on your insurance policy. A higher excess means a cheaper premium. It also means that in the event of an accident, you’ll need to pay more if you opt to make a claim – so you need to weigh up the cost/benefit of a saving now compared to a potential higher excess down the track.
5. Fit an alarm, immobilizer or both. All improvements to security should help to lower your car insurance costs. Keep your car parked in a locked garage overnight if you can. If you don’t have a garage, parking in a driveway is generally considered a lower risk than parking on the road. It’s less likely that vandalism, theft or accidental damage will occur when you’re off the highway.
The day to day stuff
There are plenty of smart ways to save on the day to day running costs of your car as well. Everything from the tyres you buy to where you have your car serviced. Even the way you drive. Check out the ‘Vehicles’ section of the Canstar Blue website for further information.