10 Tips When Buying A Car On Finance NZ

10 Tips When Applying For Car Finance NZ
10 Tips When Applying For Car Finance NZ

Read through our car finance tips when buying a new or used car in New Zealand. 

We’ll give you answers, educate you and help you on your way to making a great decision on your next vehicle purchase.

1. Know how much car finance you can afford and stick to it

Make sure you work out what your disposable income is. Total your income and minus your expenses to get a good idea on how much money you have left over and how much finance you can afford per week. Keep in mind you’ll need car insurance, WOF, Registration, new tyres + parts and labour as things need to be replaced.

A car that gets you from A to B can suck away thousands of dollars and its still just a car that gets you from A to B!

Once you know what your disposable income is, use our car finance calculator to work out how much you can afford to borrow and repay weekly/monthly. Write these figures down and keep them in your head, or even take the piece of paper with you to give yourself a wakeup call if you need it at the car yard.

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2. Do your research before you go to a car yard

Lets face it, everyone is an online research guru these days. So do your research! Search for a car that suits your needs. Find out all the pros and cons of that particular type of vehicle. Are they prone to breakdowns? Are parts and labour expensive?Are there common problems with that vehicle? Is it fuel efficient?

Educate yourself and know exactly what you are buying before you step into a car yard.

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3. Take a friend or family member with you

Theres nothing like having a friend, family member or car guru with you to offer advice and keep you level headed when deciding on what car to buy. Take someone with you whos going to keep you thinking responsibly and remind you of the more important things rather than how shiny the car is.

When dealing with car dealers, support crew are always handy to have for asking any of the tougher questions and reminding you of what you can afford and what you want in a vehicle. If you’re not very good at asking questions or feel uncomfortable with car sales people your support crew can step in and punch away for you, getting the answers you need.

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4. Read and fully understand the terms and fees

Ask for a disclosure statement if you haven’t been shown one, which details all fees charges, penalties, terms and conditions. A car dealer is required by law to show this to you and make sure you fully understand everything in it.

Understand total financial commitments you are signing up for including:

  • Total loan amount (without interest)
  • Total loan amount (with interest)
  • Weekly/Monthly repayments
  • Missed payment charge
  • Early repayment fee

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5. Have the car mechanically checked

Make sure you have the car checked by a mechanic. If the car yard dealer says the car is A1 mechanically sound, ask to see the report, go over it thoroughly with them and ask any questions you can think of.

Buying from a dealer means you are covered by the Consumer Guarantees Act which means the vehicle should be of acceptable quality, fit for purpose and as described. If your new car does not meet one of these guarantees you can have it repaired, replaced or be refunded.

If you buy from a dealer you should have a 3-6 month warranty with the vehicle. If you don’t, just ask for one.

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6. Always test drive the vehicle

Any weird noises? Ask about them! Check the steering, the braking, lights, indicators, air conditioning, heating, window wipers. Any buttons not working? Why not?

Basic beginners vehicle checklist:

  • Check oil level, brake fluid, transmission oil, power steering fluid, even the window washer water. Are any of them not full? Why not?
  • Check for any oil leaks on the outer engine
  • Check for any oil leaks on the ground beneath the car
  • Check coolant level (before the test drive)
  • Check the dashboard for any warning lights – If there are any ask what they are
  • Check the battery is clean, connections are sound and no calcium deposits are present
  • Check the spare tyre is ok, and the tyre jack and any other tools are with the vehicle

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7. Get everything in writing

Any promises made by the car dealer, get them in writing! There’s nothing worse than having someone promise something only to find down the track you’re not getting what was promised and its not in writing so you’ve got no proof to fall back on.

Car dealers are well known for making promises on the fly that aren’t in writing and not delivered. Any free servicing, discounts promised need to be in writing otherwise you’ll show up a few months later and no one will know what you’re talking about. Even worse, the salesman has moved on and you’ve got no one to confront about “the promise”.

Even a price on the floor needs to be in writing before you leave the yard. You don’t want to come back the next day to get your 15,000 car only to find its $16,990 because the salesman didn’t put anything in writing before you left and can’t remember saying $15,000.

If you are paying a deposit, make sure you’ve got the deposit receipt and the total cost of the vehicle so there’s no nasty surprises. Once a deposit is paid thats it, you’re in the game and generally there’s no turning back.

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8. Remember, there are other cars...

Don’t think if you turn down this “amazing deal” that you’ll never get one similar. Theres a lot of cars out there and theres always another deal around the corner – You’re just looking at one of them

And don’t fall for a dealers spin that “a deal like this won’t come around again” it is utter rubbish and something they say more than once every day.

So, view a car (or cars) then take some time out, at least a couple of hours and make a decision when you’re head is a little more level and you’ve talked to your support crew, family or friends. And listen to their advice!

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9. Know your vehicle expenses

Do your research on the type of vehicle you’re looking at buying. Are parts expensive? Is servicing expensive? Are there plenty of that model around in New Zealand so parts are readily available?

You’ll need insurance so get an estimate of your insurance costs for that vehicle as well. You can get a free quote online prior to purchase so you know exactly what the costs will be.

In fact, if you want to get a quote now you can head to our partner Cove insurance and get your first months insurance free – Up to $100 off on us!

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10. Keep your head!

And last but not least. When financing a new or used car, keep your head level, and your feet on the ground. Know what you can afford and don’t let any car salesman spin float you $10,00 above your ideal spend limit.

Be realistic and take your time, consult your support crew and make a decision that is right for you and your family.

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