Buying a new or used vehicle

If you need to borrow money, you should shop around for the best deal. Check the interest rates offered by different banks, credit unions, finance companies and other lenders.

You don't have to use the finance company offered by the seller.

Always check the terms and conditions of a finance or insurance product as there may be large penalties for defaulting on payments.

Work out a budget

Find out how much you can borrow and work out how much you can afford to pay back each month.

Make sure your budget includes money for all of the following:

• registration
• stamp duty
• fuel
• repairs
• insurance.

Get insured

You should take out insurance cover as soon as you buy a vehicle so you are insured against accidents. Generally the higher the cover, the more it will cost you.

You should also shop around for the best insurance deal.

You don't have to use the insurance company the car dealer recommends.

If you have agreed to have the car as security over a loan, then you will have to take out comprehensive insurance for the term of the loan.

Insurance types

There are three basic types of car insurance.

Comprehensive insurance

Covers damage to your car, damage to other people's cars and property, damage to your car caused by fire and theft of your car.

Third party, fire and theft insurance

Covers damage to your car by fire and your car's theft, as well as any damage that your car causes to other people's cars and property but not any damage sustained by your car.

Third party property insurance

Covers you for any damage that your car causes to other cars and property but not any damage sustained by your car.

When choosing an insurance policy you should consider all of the following:

• if damage caused when someone else drives the car is covered
• what is excluded or not covered by the policy
• how much is the excess - this is the amount of money that you need to pay when you make a claim
• if you can pay the premiums by monthly instalments so the cost can be spread over the year.