Car buying checklist: Five things to do before visiting a dealership

It’s easy to focus on the advertised price, but the real cost of buying a car includes both upfront and ongoing costs you’ll want to plan for.

Start by understanding these three quick numbers:

• Upfront costs – purchase price, vehicle history reports and any stamp duty if applicable.
• Ongoing costs – insurance, servicing estimates, fuel or charging costs and loan repayments and fees if applicable.
• Buffer – set aside some extra money for unexpected repairs or costs. What you need here varies depending on the car you buy.

If you’re deciding between new or used, remember that a used car may be cheaper upfront but can require more maintenance depending on its condition, while a new car may cost more upfront but can be cheaper to run and service.

Walking into a dealership with a clear finance plan can make negotiations simpler because you’ll already know what fits your budget and what doesn’t. 

There are multiple ways to finance your new car, with common options including:

• Car loan: A secured loan connected to the vehicle, which can offer lower rates because your car serves as security for the loan (often available for new or used cars).
• Personal loan: An unsecured loan, where the car does not serve as security, and funds can often be available before the purchase is made.
• Dealer finance: Finance arranged through the dealership – ask about rates, fees and whether there are hidden costs or balloon payments (a lump sum due at the end).
• Leasing (including novated leasing): Where you don’t own the vehicle but lease it – it may reduce monthly payments but can come with conditions and limits on your ability to own the car.

It’s easy to fall in love with your dream make and model but do a quick comparison across your shortlist before deciding on the right vehicle for you.

Make sure you consider:

A used car can be great value but run these two checks before you commit:

• Professional vehicle inspection (for example, via a trusted local mechanic or your state or territory motoring club, which you can find at the Australian Automotive Association).
• Personal Property Securities Registry search to see if money is still owed on the vehicle, for a small fee. This matters because if a previous owner defaults on a secured loan, the car could be repossessed even after you buy it.

If you want more detail, a more comprehensive history report can include information like write-off or stolen status and other key history items but may cost extra. 

Dealership discussions can move fast and it’s easy to get distracted by monthly repayments or add-ons. That’s why it helps to have a simple negotiation plan:

• Start with the drive-away price and keep your budget number handy from step 1.
• Know your finance position from step 2 and stay focused on this.
• Ask about add-ons and take your time – don’t sign until you understand what’s included, especially for warranties and extras.
• If dealer finance is offered, ask key questions like whether there’s a balloon payment, what rates and fees apply and whether a commission applies.

As a quick win, if you have a personalised quote for a NAB Car Loan, you can compare it with dealer finance on a like-for-like basis (term, fees and repayments) to help you decide.