There comes a day when we look at the vehicle we own and realize we would like to buy a new one. For most of us, it’s one of the most expensive purchases we'll make, and it’s accompanied by a mixture of excitement and some anxiety, for if we get it wrong, it could be very wrong indeed.
One way to reduce the room for error is to complete each purchasing stage in the right order. What do we mean by stages? Well, it becomes very clear once we look at some basic consumer buying behaviour. At the simplest level, there are five psychological stages involved in a purchase: need recognition (we feel the need for a new car), product research (we learn what’s out there), evaluation (we carefully consider everything learned through our research), the purchase decision (we carefully select the most suitable car), and post-purchase behaviour (we react positively or negatively to the choice we have made).
What happens when people make bad buying decisions is that they completely miss out the product research stage, allowing their excitement taking them to a point part-way through the evaluation, and then rapidly on to the purchase decision. Unfortunately, we all do it at some point, as it’s part of being human. However, to avoid a very expensive mistake, here’s how you should research your new car purchase.
- First, define your present and future needs. Where will you drive, how often, and how many people will come with you? What matters most to you out of the car’s features? Do you need to tow, and have you somewhere easy to park?
- Next, check your financial position. How much can you afford for a monthly repayment on a loan? This is usually around 20% of your take home salary.
- What works best for you, leasing, buying through a finance deal, or buying outright? With leasing you won’t own a car at the end of the deal, but when buying, you will.
- Which model cars fit the above? You may be dreaming of a particular vehicle, but it’s important to see what other vehicles would meet your needs. There may be something more suitable or better priced out there. Find out all you can by researching the different vehicles online. Read a lot of reviews, including those from people who have owned this model for a number of years and know which problems can arise.
- Consider all the hidden costs of your preferred car. This means looking at registration, insurance, warranties, maintenance and running costs, and depreciation if it’s being bought for your business.
- Do an online search for examples for sale in your area. This will give you an idea of the price it’s selling for in different dealerships, as well as privately. Hopefully you’ll see 2 or 3 examples that look interesting enough for a closer look.
- Contact the dealer(s) and arrange to test drive the vehicles. Use your research to make a list of questions and features you’re going to check for. When you test drive the car, try to do so in similar conditions to those you’d be using it in. Take your time and don’t be distracted or pressurized by salespeople.
- After driving a few cars, you should hopefully have a good idea of which is worth looking into more. Now it’s time to start considering how you want to negotiate with the dealer, and to explore the type of finance that is available from car finance providers.
By following these steps, you should be able to make the right purchase decision, and your post-purchase behaviour will reflect pleasure and satisfaction with your new car.
1800 Approved has been helping Australians get the best finance, insurance and warranty deals since 2008. Winner of the 2016 Asset Finance Broker of the Year Award, we have offices located in every major city throughout Australia. 1800 Approved prides itself on excellent customer service, using our network of over 30 lenders to ensure every single client gets the best possible deal.