Could I have got a better deal? Have I spent too much? Is this the car I really want?
These are questions you need to preempt before signing the dotted line on a new car deal. While a little buyer’s remorse is natural with any expensive purchase, a lot is not. There’s nothing worse than feeling like you didn’t get the deal you wanted after the ink is dry on a contract you just signed.
Around this time of year especially, car dealerships are desperate to do deals. Adverts on the radio, TV and in the press talk up 'crazy last chance offers' and 'one-off end of Financial Year countdown deals'.
This dealership frenzy to meet targets and clear car-yards for new stock means there is great value out there for new car buyers. However, a high-pressure sales environment also brings increased risks, where costly mistakes can be made. Car showrooms are intimidating places at the best of times, so you need to have a pretty clear idea of what you want before wandering in.
You’ll need to be very confident about:
- Your budget – How much can you realistically afford? There might be better value in a car $2,000 over your budget, but that’s still two grand too much.
- Car requirements – All salespeople worth their salt will try to up-sell. If you know you want a 1.4 litre, three-door hatchback, then don’t be tempted by anything else.
To work out exactly what vehicle you want, think about what you need and then research your options thoroughly. Ideally, before you walk into the showroom you should have a good understanding of what you want, including the model grade, the features, the options and the recommended retail price. All this information is freely available online and can be found simply by a quick search online
Important factors which are often overlooked are fuel efficiency and running costs – luxury vehicles and some imported models can be expensive to run, service and repair, so bear that in mind. Know which car you want? Use the NRMA car loans calculator to see if the model fits your budget.
It will help you enormously to know what to expect in a car showroom and what’s expected of you. The second you sign the contract it’s hard to get out of the deal.
Tips to ensure you sign with confidence
- Make a list. Prior to heading out, take a moment to write down what you are looking for in a car. This will keep you on track when you’re down at the dealership
- Shop around: Decide to visit a few dealers stocking the car brand you want to purchase, starting with the one furthest from your area. By the time you reach your local dealer last, you should know exactly what vehicle and price you are after and be ready to do business
- Bring a mate: Many dealers will let you inspect and test drive a car in a calm environment but there are some who apply pressure or excessive charm. In the thrill of sitting in a new car and sharing your excitement with the dealer you may lose sight of your plan or pay too much. Bringing an impartial friend with a sense of detachment could save you in the long term
- Everything is negotiable: An attractive top-line price can be offset by high dealer delivery fees. The delivery fee is a standard added cost to cover getting the car prepared for delivery to the customer: removing plastic, cleaning, having a mechanic inspect it and completing the registration process. This fee is generally a source of profit for dealers so feel free to haggle. Most dealers quote around $1500-$1700 but some charge as much as they can so read the fine print
- A stitch in time: Sales staff will sometimes do a very low-profit deal at the end of the month in order to meet a sales target and win a bonus. So if you are ready to buy in the last week of the month, a better discount may be available. If you want to do this kind of deal however, you do need to be prepared to buy on the same day. In any case, don’t fret. There’s always next month
- Patience is a virtue: Sales staff don’t like to see you walking out the door to compare their prices with other dealers. They will ask to to do a deal. Do not feel hassled into signing any paperwork on the spot. Go away, make a considered judgment, check the price against other quotes and then return to sign a contract if you’re happy. There’s no sense rushing into a deal that may take years to pay off
- Ensure deposit is refundable: Be wary of putting down a deposit unless you have a 100% guarantee it’s fully refundable should the deal fall through
- Research rates: When it comes to finance and insurance, shop around online to see what are the best rates available. The NRMA car loans calculator is a great place to start. Salespeople will push their own in-house services because they get a commission from each deal they sign up. Don’t dismiss the rates they offer, as dealer finance packages can be very competitive nowadays
- Skip the extras: When the 'after market accessory specialist' is introduced, it is time to be extra cautious. This person’s job it is to sell you additional extras such as rust proofing, paint protection, headlight protectors and floor mats. While some of these items are worth having, some are not. In many cases, you’ll find them cheaper if you shop around after you buy the car. Unless you’re sure they are great value, say thanks but no thanks. Members can call our motoring advice team on 13 11 22 if they are in any doubt over what extras are necessary.
- Cooling off period: There is a ‘cooling off period’ that applies if you purchase a car from a dealership and the dealership arranges your loan for the car, or supplies application forms for, or a referral to, a credit provider. Under these circumstances only, you have one day to change your mind. During the cooling off period the purchaser can cancel the contract by signed, written notice given to the dealer. If the buyer backs out after this cooling off period, the purchaser will be liable to pay the dealer $250, or 2% of the purchase price, whichever is the lesser amount. It is also important to examine the T&Cs of the contract as these terms can vary. Members can call our motoring advice team on 13 11 22 for more info.
When you get it right, buying a new or used car is a great experience. Once you’ve done your homework thoroughly, shopped around and negotiated a price you are comfortable with, you can drive off the lot in confidence – savoring that new car smell and beaming from ear to ear at a deal well done.