Credit crunch or not, the basics of car buying remain the same. If, however, you're planning to take advantage of the super low car prices being advertised during the current credit crunch, make sure you review our simple tips before you buy.
Arrange your car finance ahead of time
Secure competitive car finance before you go car shopping to minimise your finance costs and beef up your bargaining power, helping you to purchase the right car for the right price.
New car sales are down and so are prices. The global credit crisis (and related decrease in consumer spending) combined with uncertainty resulting from announcements that two of the automotive industry's major wholesale financiers (GE and GMAC) will shortly exit the Australian market has resulted in the lowest new car prices we've seen for some time. Car dealers are offering extremely competitive prices on new cars, but this does not necessarily translate into lowest total cost car finance at the dealership.
The wrong car finance can increase your costs by thousands. The decreased competition for both wholesale and retail car finance has had a significant impact on the range of finance options available to buyers at some dealerships, and the ability of dealer-based finance consultants to provide the right solution for a particular car buyer.
"Is that your best price?"
Be prepared to negotiate with the dealer (or seller).
With sales low and many dealers' finance arrangements still uncertain, there is a real opportunity to negotiate hard for an extra competitive price on your preferred vehicle. In the current market, some dealers may be much more interested in moving a vehicle off their showroom floor than making much - if any - profit on the sale.
If you're not confident negotiating, consider using a vehicle procurement service to secure today's best price for the vehicle of your choice. Use the internet (try sites like Drive and Redbook to get a feel for the market value of your preferred vehicle. Purchasing a vehicle is a sizeable commitment at any time - shop smart.
Protect yourself against falling vehicle values
Prices are down today, but what about value tomorrow? There are an overwhelming number of deals for today's car buyer to choose from, but some of the developments during this credit crisis may have a long-term impact on used vehicle resale values.
Before you rush out and purchase your new vehicle, check your requirements against the range of resale values for similar vehicles. Resale values are influenced by many factors including the reputation of the brand and model, and trends resulting from fuel price, environmental concerns, and more. Click here to read more about protecting your car's resale value.
While it may be hard to imagine car prices falling any further, in the event that your vehicle's value does decrease, you may wish to consider the benefits of opting for "new for old" car insurance and "agreed value" over "market value" cover to ensure that you're covered in the event of a total loss. In addition, gap insurance offers peace of mind in the event that your car is written off and the finance amount outstanding exceeds the insured value of your vehicle.
Car finance - get approved
The cost of funding has increased, the availability of funds has decreased and the approval criteria have tightened for lenders everywhere. The process of selecting the best car finance for your needs is essentially unchanged, but today it's even more important to present the right application to the right lender.
The process of arranging car finance need not be time consuming or stressful. Start with our A to Z Guide to Arranging Car Finance and then let your finance consultant help you to select the right solution for your financial situation - taking into account your income, cashflow, taxation and ownership requirements.
A professional finance consultant will know which finance solutions fit your requirements, which lenders are likely to look favourably on your application and how to appropriately complete your application to increase your chances of an "approved" outcome. Secure the finance you need with the appropriate lender - first time.
Choose a broker with a top product range
Now, more than ever, it's important to choose a car finance broker that is reputable. A particularly important aspect to consider is the range of lenders that your broker is accredited with.
A newly downsized range of products is not uncommon with the reduced availability of funding, and this decreased competition is not good news for your pocket if your broker has only limited options. A large panel of lenders means more than just choice, it means that your broker is much better equipped to closely match your situation with a tailored, competitive offering, and has access to a wide range of funding sources.
A broker with significant partnerships will also be able to offer solutions that are not available to the general market, increasing your options for finding the best possible finance solution. Click here to read more about comparing car finance brokers.
Established in 1998, stratton has exclusive arrangements with a range of premium lenders. For more information and assistance with smart car buying and competitive finance offerings complete an instant car finance quote, get preapproval online, or call 1300 STRATTON (1300 787 288).