What to factor in when buying a car on finance

Whether you're on the hunt for your first car, or you’ve got your eye on an upgrade, you'll need to consider more than just the sticker price on the windscreen.

It’s a fact of life that cars basically eat money. So before you part with your precious cash, make sure you’re ready, informed and fully prepared about the costs ahead. Don’t let that dream car turn into a monster-truck destroyer of your finances.

Here are some costs to consider as you ponder your choices.

Purchase versus maintenance costs

Which car to buy? Sure, you’ll need one that fits what you need on the road – but also, what you need in your bank account.

Purchase price is important, but so is the car's cost over its expected lifetime. And this figure can vary wildly, depending on where it’s made, what parts are available, and how much fuel it uses.

Consider this: while a new car can be more expensive to buy, it should be cheaper to service. Conversely, a used car will likely be cheaper up-front, but will probably need more maintenance.

Vehicle inspection fees

Think you know a bit about cars? It doesn’t matter – make sure you get a professional inspection of any car you’re thinking of buying, because it’s easy to overlook flaws in a car you’ve fallen in love with.

It could be your local mechanic; or if you’ve got a membership, save money on a pre-purchase vehicle inspection through your local motoring club. However you do it, just get it done. Future you will thank you.

Stamp duty costs

Stamp duty can be a large one-off cost and is calculated on the price of the car you're buying. To make things extra confusing, each city or state has different stamp duty costs, depending on what type of vehicle you're purchasing. Also note if you're buying a new car, some dealers may add stamp duty on top of the purchase price. So make sure you devote some time to puzzling it all out – and if anything doesn’t seem clear, always ask.

Roadside assistance fees

Roadside assistance is a service that the motor vehicle club in your city or state offers its members.

While you'll need to pay an annual membership fee, it’s totally worth it for the help you’ll get during a breakdown. You'll also get discounts on accommodation, theme park tickets, car hire and so on, so it’s not hard to justify the expense.

Registration costs

When you first buy your car, you'll need to factor in registration transfer (and renewal, if it's about to expire). Rego fees vary from city and state, but your local vehicle registration centre will be able to tell you what you're due.

Just remember, this is a large ongoing cost you need to budget for every year. Don’t forget to pay it – being caught driving an unregistered vehicle means a slap on the wrist and a whack to the funds (to the tune of hundreds or thousands of dollars.)

Car insurance premiums

As with any insurance, this is something you hope you'll never use, but need to always have – don’t even consider skimping here.

While third party insurance is compulsory for all car owners, it's advisable to take out insurance that covers fire, theft and accidents too.


And finally, let’s save the best, most infuriating expense for last. It’s fuel: that non-negotiable consumable that chews hundreds from your savings account on the regular. (Unless, of course, you’ve had the foresight – and the funds – to get an electric vehicle.)

When you’re budgeting for your car and your car loan, don’t forget that fuel costs may rise, and depending on how much you drive, this can have a major impact on your bank balance.

So take fuel into account in your weekly and monthly budget. And just say no to every sneaky chocolate bar and 2-for-1 soft drink you’re tempted to throw in to petrol station visit – it all adds up, after all.

Ready to get started? Take a look at Latitude Car Loans.