Simple interest finance on car purchases

Where Are You Going?

Whether you're using them for Sunday drives, commuting to and from work/school, road trips or just driving around; cars play a really big part in how we get around. For most people, their first car is the most expensive asset they have to their name and most cars don’t get more valuable with time…

Whether you’re going to buy your own car one day, borrow mum and dad's in the meantime or ride in the backseat of the family car, there are a lot of things we need to know about buying and owning a car.

The cost of purchase

There’s more to it than that price tag at the car yard.

So what do we need to be aware of?

• Purchase price: how much the person selling the car is asking for. Do you need a loan?
• Registration: the cost of registering the car with the NSW Roads and Maritime Services (formerly the RTA) so it can be driven on Australian roads.
• Stamp Duty: a payment imposed by the state government for purchasing a new car.
• Insurance: cover provided by an insurance broker (or institution) that will pay for some or all of the costs involved in an incident (depending on what type of insurance).

The bottom line is to figure out how much money we have to spend! Consider what kind of car you’re looking for and start saving.

Find a car that you really love but need more money? You might need to look at getting a loan. 

Loans

Banks, or other ‘lending institutions’, can set you up with some money that you can put towards specific things (e.g. a car!). But buyers beware; not only do you have to pay them back over time (usually in monthly repayments) but they’ll charge interest on top.

Also, some lenders may charge fees for setting up a loan, ongoing fees for maintenance of the account and other additional fees. Take a look at some of the interest rates offered by various lenders on a car loan: