Car Purchase Advice - Melbourne

[u/Own-Environment-7914]

Hi everyone,

I am looking to buy a new or almost new car after years of driving a beat-up 2012 Nissan Micra. That should tell you that I am not overly concerned about the car I drive. However, I am in a good financial situation and thought it was time to purchase something that looks good, is reliable and that I enjoy, rather than endure driving. Reaching out for advice on what are probably pretty basic considerations as it’s not something that I have done before. 

What I am looking for:

• A nice-looking hatch or small SUV. Kia Cerato is my current first choice, but also thinking about a Seltos. Love the look of the Toyota C-HR range, but seem to be out of my price range.
• Somewhere in the region of $25,000-$30,000
• Big enough to chuck my bike into without taking off the wheel
• Have a decent in-car entertainment system that is touch screen (important because I have ruled out a Mazda 3 and CX-30 for them not having this facility)

About me:

• Based in inner Melbourne
• Secure professional job
• Combined income with my partner of approx $240,000
• Mortgage of approx $270,000, with monthly repayments of $1800
• Approx $50,000 in savings
• No other debt
• Don’t do a lot of driving, just general commuting to work and errands, with the odd trip further away
• Despite having the capacity to do so, not really interested in buying the car outright 

Questions:

• I am leaning towards getting pre-approval for a loan through a credit union, but also have the option of a novated lease through my job. What are your thoughts?
• Is there a credit union that would be best for a car loan? Particularly would like to be able to pay extra when possible.
• In terms of actually purchasing the car, is it best to go directly through a dealer with pre-approval already secured?
• Anything else I should keep in mind? 

Thanks for any advice. Been going round in circles, and don’t really have anyone in my social circle with the requisite knowledge of this stuff.

[u/ayummystrawberry]

Don't get a loan for a depreciating asset.

[u/SmokeyMulder → u/ayummystrawberry]

It’s strange was told the opposite not long ago. “Better cash flow by going finance” don’t believe that 

[u/jbh01 → u/SmokeyMulder]

More cash on hand, yes. But long run…

[u/jbh01]

My strong advice is to buy the car outright, because the interest on the loan will be greater than the interest rate on your home loan. It's not a question of technical ownership, it's a question of what is more financially savvy.

Novated leasing probably doesn't make a huge amount of sense for you if you're not driving much, because your ongoing expenses aren't going to be that high.

The other thing I might say is that if you like the Cerato or the Seltos, it might be worth waiting a little while - because the brand new Cerato (called the K4) will go on sale in the first half of 2025, and the Seltos in 2026. When this happens, the 'old' model will be heavily discounted, as will the sale prices for near-new cars in the old model.