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Closeup of a car; image used for HSBC Australia 6 tips to make it easier to buy a car.

6 tips to make it easier to buy a car

At some point in your life, it might make sense to buy a car. Whether it's off a dealer's floor or a second-hand purchase, whatever you're looking at, cars can be expensive. Here are six valuable tips to put yourself in the best position to get a better deal on your next car.

Set your budget

Before you think about the brand and model, focus on how much you are willing to spend on your car. You should also factor in yearly insurance, registration, and maintenance. Also, calculate how much you will spend on fuel (or electricity) and road tolls – this will give you a clearer picture on the total costs of owning a car.

How long will you own the car?

Once you have your budget, think about how long you plan on owning the car. If your car is brand new, you might be driving it for 5 years or more. If it's second hand, you might have it for a shorter period of time. Knowing approximately how long you'll own the car will help you work out the terms of your car loan.

Organise your finance

The smart thing to do is to organise your finance before you go car shopping. With your finance ready, you've set your budget for the car and can make a deal on the spot.

If you buy first and try to borrow later, you could find yourself in difficulty if the lender will not give you as much as you want. Plus, you may find your application dragging on, or you have to borrow additional funds from elsewhere to complete the purchase.

Look at a car loan

If you choose to finance your car through the dealer or a broker, they might offer you finance with a balloon at the end of the loan term. While the interest rate may be lower, you could end up owing more than the original amount.

When looking at your finance options for a new car, a car loan could be something to consider. With a car loan, you make regular repayments, and there's no additional amount to pay at the end of the loan term.

Shop around

Your finance is in place. Ready to go car shopping? The key is not to fall in love with the car; the key is to fall in love with the deal.

If you are in a dealership, try to do your negotiating at the end of the month, when dealers will be looking to hit their sales target. What's more, if the car is on the showroom floor, the dealer is paying interest on it, so they will be looking to move it on quickly. This means you might be able to negotiate a better deal.

If you're buying second hand, they are normally plenty of options out there, so you can afford to be choosy.

Don't get surprised by extras

Finally, if you do buy from a dealer, make sure you examine the road costs. Some of these are fixed, like government charges (stamp duty and registration).

Others, such as dealer delivery charges, can vary. It's best to ask around and compare your options with other dealers to ensure you're getting the best deal possible.

Buying the car you want at the price you want can be challenging. But when you have your finance organised upfront with a car loan, you're on your way to driving away with more of a bargain.