Buying a new car during the COVID shortage? You need to know these 3 things

Buying a new car during the COVID shortage? You need to know these 3 things

This is branded content for Money.com.au

If you're thinking about buying a vehicle this year, you're not alone.

Despite the COVID lockdowns, new car sales are booming. According to the Federal Chamber of Automotive Industries, a total of 81,199 new vehicles were sold during August.

Because of the boom you need to change up your approach to buying cars so you don't overpay.

So here's 3 things to know:

1 It's harder to get brand-new vehicles

Even when much of the country is in lockdown and limited in accessing dealerships, vehicle showrooms have adapted to allow Aussies to visit and purchase a vehicle remotely. This has helped ensure no slow down in car purchases, in fact, they're up compared to the same time last year.

On the flip side, stock is dwindling due to factories being shut, and there aren't as many new cars coming into Australia so you'll find brand-new cars have a wait list.

Loan wise, new cars typically get the better rates over used cars, because the vehicle retains its full, pre-driven value and is mechanically perfect. In the eyes of a lender, it's a safe bet, and easy to approve and give a decent rate on.

A second-hand car can have any number of potential problems which need to be assessed and accounted for. Even in the event of finding a perfect used car, your rates will most likely be higher than for a new vehicle.

2 If you need a loan do the research before visiting the dealership

Dealerships can offer car loans but you're generally not going to get the best loan once you've fallen in love with the car.

So if you want the mythical low-rate car loan, the holy grail for anyone financing a vehicle, then the best thing is to do the work BEFORE you hit the dealership.

You can approach it two ways.

You can compare deals by yourself and research the market, then negotiate with the dealership to hopefully get a decent deal.

However, in a recent study by Autotrader and undertaken by YouGov, results show half of Aussie drivers claim they aren't very knowledgeable about cars at all, and 64 per cent of drivers between 22 and 54 didn't feel comfortable negotiating on their vehicle purchase.

Your other option is getting pre-approval on a low-rate car loan from a lender before you visit the dealership - you'll know the rate you can already get approved for and the total costs of the loan.

3 Getting pre-approval before you shop

If you need the help of a car loan to purchase your car, getting pre-approval before you visit a dealership (online or in-person!) can save you thousands and take all the angst out of buying the car on the day.

Pre-approval is a great way to know exactly how much you can get approved for, and give you control over when you make payments, how much the payments are and loan length.

It also means you won't feel any pressure to just sign an agreement so you can get a car. You'll know you've got a loan that works for you.

If you want to see the car loans you can get approved for today by reputable Australian lenders, you can simply spend 60 seconds using the Car Loans with Money Matchmakerâ„¢ engine.

Money Matchmakerâ„¢ uses your answers to show you real lenders, real rates and actual repayments across all the lenders that you're eligible for; without any broker fees or marked up interest rates.

You can then choose the lender you wish to match with, all online and with no obligation. Once armed with the right car loan, you can go shopping for your next car with confidence.

This is branded content for Money.com.au

This story Buying a new car during the COVID shortage? You need to know these 3 things first appeared on The Canberra Times.