Story in partnership with Savvy
The car market has drastically changed over the last couple of years, with supply chain shortages wreaking havoc on the Australian market, impacting car prices and wait times.
As we approach the end of the financial year, consumers are likely contemplating buying a new car to cash in on the usual savings, and reduce impending tax bills.
But the current state of the market requires buyers to take a much more measured approach to car purchasing in 2022. Here's how to get a good deal on a car this year.
Are good deals still even possible? It's a valid question.
The pandemic's effect infiltrated every industry in some way or another, and the auto industry was no exception.
Car manufacturers reduced production in anticipation of an economic downturn, and so did other manufacturers that are relied upon by auto companies to provide important parts.
This resulted in a vehicle shortage, and now car manufacturers are struggling to keep up with demand.
Prices and wait times have soared upwards. In January, the average wait time for a new car in NSW was 124 days
Even used cars are bringing home bigger profits than ever before, with the price of a used vehicle increasing by 44 percent from December 2019 to December 2021.
These effects are reducing the willingness of car salespeople to negotiate prices, as the available cars are basically selling themselves.
Additionally, fuel prices have sky-rocketed, with Australian's paying 40 per cent more at the bowser compared to last year, making car ownership an all-round expensive affair.
But among the grim outlook of bagging a bargain on a car this year, there are ways of making it happen. It comes down to preparation.
There are multiple options when it comes to financing a car, and some save you more money than others.
A secured car loan is one that uses the car as security, making approval less risky for the lender. And the lower risk often results in a lower interest rate for the borrower. In order to know what is a fair rate, and to achieve the best one, compare secured car loans prior to selecting one.
An unsecured car loan or personal loan, on the other hand, is one that doesn't tie a security asset, like a car, to the loan.
They often have a slightly higher interest rate compared to a secured loan, and the bank can't repossess the car as collateral.
And then there's a chattel mortgage - available to businesses looking to purchase a car or equipment for business purposes. The lender will use the equipment as a security, and the interest rates are usually lower than that of an unsecured loan. Interest rates can be fixed or variable.
Gaining pre-approval comes with many benefits to car shoppers, including the ability to lock in a competitive rate, do a thorough comparison and have a responsible spending ceiling.
Researching what kind of car you want to buy, then securing the funds via pre-approval means you won't be manipulated into accepting the interest rate that the car dealership offers you, after becoming emotionally invested in a car.
Negotiating at the dealership will also work in your favour if you've already secured pre-approval as it means a quick sale, and more bargaining power. Salespeople love an efficient sale, so will usually budge on price if it means signing paperwork quickly.
So you've done your car and finance research, secured pre-approval and are on the hunt? Get ready to jump on the 'one' when it comes up.
The market is hot, and demand is much higher than supply so you've got competition. But you've also got a competitive advantage with all the homework you've done.
Turn listing notifications on with car websites and get in the books with local dealerships by telling them what you're looking for.
But don't forget to do your due diligence before purchasing, order a vehicle history report and check the vehicle registration.
Purchasing a hybrid or electric vehicle means also buying a home charging system that can cost thousands of dollars. Factoring in this additional cost, including the cost it will add to your electricity bill, will help you keep within your budget.
State governments have implemented their own incentive programs to encourage the uptake of EVs and save purchasers money. In NSW, eligible purchasers can claim a $3000 rebate on electric vehicles under the value of $68,750 and are exempt from paying stamp duty.
Story in partnership with Savvy