Buying a new car is fun and very exciting. It’s like buying a new home. You get cold feet, sweaty palms, and may even tremble if it’s your dream car that you’re buying. However, the buying process should be dealt with in a calm and composed manner whereby your judgement is not clouded by your emotions. You are prone to make costly mistakes if you let your emotions get in the way.

Planning is key to getting the best deal on the market. A smart borrower always wins and here are some tips to become a canny borrower;

Know what you can afford – Looking at your take home pay is not enough to know if you have enough money to spare. Factor in expenses like;

When you think about it and list all your expenses, you’ll be surprised on how many there are. Use a budget planner to determine where your money goes and how much you have left after all the expenses are paid for.

Save up for a bigger deposit in order to get a lower interest rate and lower monthly repayments. You can also access ASIC’s MoneySmart Cars App to determine the costs of maintaining and owning a car.

With the budget planner and app combined, you have the ability to determine whether or not you can afford the car loan and the costs of owning the car.

Take as much time in comparing quotes – Go beyond the loan amount and interest rate and look at all the other charges, fees, features, and penalties. Look out for charges that the sales agent may not have disclosed.

If you know a finance broker, seek his advice when comparing quotes and use a loan calculator to determine your monthly repayments.

Only deal with licensed lenders – Scammers are a dime a dozen and they use various techniques to steal your hard earned money. They set up legitimate looking websites and may even give you a valid licence number especially when dealing online and through emails.

There are many legitimate businesses online but it’s still better to keep your guard up. Make it a habit to check if a credit provider is licensed or call ASIC on 1300 300 630.

Make sure to pay on time every time – Late payment fees are costly and may affect your credit score. Set up automatic payments if you can, or set an alarm to remind you at least 5 days before the payment is due. If allowed in your car loan contract, it is also good to make additional payments if you have extra money.

In certain circumstances when you may not be able to make repayments, seek help from your friends and family immediately. You may also speak with your credit provider and see how you can resolve your temporary inability to pay.

You are not alone – If things get worse and you are not able to work things out with your creditor. Seek help from the Financial Ombudsman Service. They can help you devise a plan to overcome your financial difficulties.

During these times where scammers are getting smarter and are innovating quickly, remaining two steps ahead of them is the best defence in protecting your hard earned money.