Buying a car overseas
You’ve found your dream car but unfortunately you can’t purchase it on Aussie shores or perhaps your next set of wheels may be cheaper to buy abroad. Regardless of your reason for buying a car overseas there’s a lot you need to consider before making the purchase. The last thing you want, is to lose half your savings to high rates and transfer fees! If you follow this guide, you’ll learn what to look out for when making an international money transfer to buy a car overseas…and if you take on board our hot tips, it will be a smooth, safe and secure ride!
Options for sending money overseas to buy a car
When it comes to buying a car overseas there are two main options you can choose from to send the funds; a bank or a foreign exchange specialist. We’ll look at the pros and cons of each but given you’ll be transferring a large sum of money for the purchase of a car for reasons outlined below we highly recommend using a foreign exchange specialist such as OFX, CurrencyFair or World First. Keep in mind, Australians are wasting millions of dollars by making international money transfers via the big four banks rather then choosing a foreign exchange provider.
Banks may be a safe haven when it comes to storing your money but they aren’t necessarily the best option when it comes to buying a car overseas. With high rates and fees Mozo thinks you should look around for a better option that will give you more value for your money.
- If you need to send money overseas in a hurry a bank can be a good choice
- Familiar names that you already use and trust
- For a one off international money transfer a bank can be reliable and convenient
- The bank’s exchange rate is often a lot more expensive than a foreign exchange provider
- Plenty of fees including a high conversion fee and a sending and receiving fee
- Some may have limited knowledge of what you want them to do and not have a dedicated IMT specialist
Foreign Exchange Specialists:
As the name suggests, these are the experts in the field when it comes to transferring money overseas, especially if you’re planning on buying a car abroad. There are plenty of specialist FX in the market, all offering competitive rates when it comes to exchanging currencies around the globe. They’re also fast, efficient and reliable so you’ll be driving off into the sunset with your new wheels in no time! Click here to compare the best IMT deals on the market.
- Usually the cheapest option for making an IMT when buying a car overseas
- They offer attractive exchange rates and the best value for money
- Fees are a lot more modest compared to the banks
- Super flexible, you can usually transfer funds 24/7
- As currencies change everyday, trading Aussie dollars may vary from one day to the next
- Some FX specialists have a minimum and maximum transfer limit
- Technical problems could slow down the transfer speed
Features to consider when comparing foreign exchange providers
In the last five years there’s been a massive increase in the number of small FX providers joining the industry. So with the international money transfer market a lot more competitive it’s important you shop around and compare providers before so you receive the best value for your Aussie dollars. When doing your research on which specialist to go with to purchase your car make sure you consider the following features:
Exchange rate: First and foremost you need to check out the exchange rate the provider is offering. Take the time to compare and calculate how much you’ll receive for your Aussie dollar. For example, if you’re buying a car in Japan, determine how many Yen you’ll receive on those hard earned Australian dollars. A few cents difference in the exchange rate could save you thousands of dollars. Remember, the higher the exchange rate, the more money you will get! Make sure you compare quotes with Mozo!
Limits: Some international money transfer providers have a maximum and minimum transfer amount. The minimum limit could be as much as $1000, but this shouldn’t be a problem when buying a car unless you’ve struck a super good deal.
Transfer speed: It’s good to know that you can transfer money immediately. But it doesn't mean that your recipient can use the funds straight away. Sometimes it takes 3-5 business days for the funds to become available.
Fees: Each financial institution, bank or IMT agent will have a different fee structure and conversion rate for the currency you want to transfer your Australian dollars over. It’s not a standardised industry so there’s not one set fee or rate charged for an IMT. Look around and secure a rate and fee that best works for you.
Transfer Options: You can make your international money transfer online, on the phone or in person. Different providers may offer different financial benefits for each option.
5 Factors to consider before buying a car from overseas
1. You will have to pay for shipping and custom costs at both ends, this can add up to $12,000 which is on top of the purchase of the car
2. The car has to meet import approval conditions which means you might have to make changes to it such as switching to right-hand drive
3. Your imported car may not come under warranty, so any repairs you’ll have to fork out yourself
4. Keep in mind you may have to pay GST as well as the Luxury Car Tax
5. Be extra cautious of dodgy car sales people from overseas, make sure you purchase the car from a reputable and reliable source
Information you’ll need to make an IMT when buying a car overseas
- Personal details including name, address, date of birth, phone number
- You’ll have to provide your driver's licence, medicare card or passport number
- Details of the account where the transfer money will be deposited from
- Full name and address of the recipient's bank
- Recipient's name, address and account number
- SWIFT/BIC Code - this is an 8 or 11 digit code that identifies banks around the world
- The amount and currency you wish to send