ASIC's MoneySmart app reveals true cost of a new or used car
Article by Roisin Kelly-Goldsmith
Consumers who plan to buy a new or used car can download a free government funded app that calculates the true cost of their vehicle over time.
“Buying a car is a major financial commitment and it's important to consider all costs, including optional extras, such as life cover or gap insurance, as these extras can be expensive and of little value,” said Miles Larbey from ASIC's MoneySmart.
“The consequences of a poor financial decision can result in significant outstanding debt.”
Larbey also said the ASIC's MoneySmart Cars app can be especially helpful for first time buyers by giving them confidence.
What the app does:
- Calculates the “real” cost of buying a car:
- Provides info on common car traps to avoid:
Celebrity V8 supercar driver, Craig Lowndes, is on board to promote the educational tool too.
“It's the perfect tool to assist with your research so the car you buy meets your need,” he said in a promotional video.
Equally important to researching a car before you commit to it is comparing and choosing the right car loan.
Here are 3 tips to help you get value for money and avoid car loan regret:
1. Consider the benefits of securing your loan. Secured car loans generally have more competitive rates, meaning less money comes out of your pocket in interest.
2. Look out for ongoing costs. You’ll want to avoid things like account-keeping and redraw facility transaction fees, as these can add up over the long run. For instance, a $5 monthly service fee might not seem like much but over a 7 year term that's $419.50 out of your pocket! You’d probably rather have that sitting in your bank account, right?
3. Compare car loan rates. It’s the percentage that has the greatest influence over how much extra you’ll pay to your provider over the loan term. Find the lowest one possible combined with features suited to you.
If you liked this, try reading: New car buyers are warned of “lemons” in the market