Our Helpful Checklist

Rapid Finance on 23 May 2017

You’ve finally found your dream car. It’s the perfect colour, it has all the features you’ve dreamed of, and the price is in your budget. Quick, make an offer before someone else snaps it up.

Stop right there and rewind. Have you really thought about all the costs involved in buying a new car? We don’t just mean the bargain price you negotiated with the seller, we mean other upfront and on-going costs.

Without sounding like the car-buying fun police, there may be some expenses you haven’t considered, so we’ve put together a comprehensive checklist to help you understand the real cost of buying a car.

  • Car Loans
  • Vehicle Stamp Duty
  • Registration
  • Negative Equity
  • Insurance
  • Servicing

Your Car Loan Options

Finding the right car loan can be costly, frustrating, and time-consuming. Do you choose a secured loan, an unsecured personal loan, dealer finance, or a leasing option?

Have you thought about your car loan budget, fees, whether you can afford the repayments, interest rates, and other loan features?

You may also want to consider taking out a loan that absorbs some of your upfront expenses such as stamp duty and negative equity.

It’s a good idea to call the experts at Rapid Finance who can compare and tailor a car loan that suits your budget and lifestyle.

Vehicle Stamp Duty

What is it?

Stamp duty is a tax the government levies on official documents when transferring ownership, and is payable at the time of purchase. It can usually be included in your car loan amount.

How is it calculated?

The amount of stamp duty payable differs from state to state, so you will need to check with your local government department.

For example in New South Wales, stamp duty is calculated on market value or how much you paid for the vehicle, while in Queensland your engine capacity will determine how much stamp duty you will pay.

Many government websites now have simple stamp duty calculators to help you work out an accurate cost, so you’ll know exactly what you’ll pay before you purchase your vehicle.


car registration document supporting image2What is it?

Vehicle registration identifies you as the owner of a particular vehicle. In Australia, a registered vehicle will carry a number plate, and the owner will hold a certificate of registration.

How is it calculated?

Like stamp duty, vehicle registration fees vary depending on which state you register the vehicle in.

For example in Victoria, registration is determined by the type of vehicle you own (car, 4WD, van) plus the Transport Accident Commission (VIC only).

Negative Equity

What is it?

Negative equity is where the value of your vehicle has fallen below the outstanding loan amount.

For example, if you purchased your vehicle for $20,000 six years ago and it’s now worth $8,000, but you still owe $13,000 on it. You have $5,000 negative equity that you will need to pay back.

What are my options?

Depending on the loan type, you could continue to pay off this amount after you sell the vehicle but it could end up costing hundreds of dollars in interest or put you in financial hardship. Ask yourself - do you need to buy a new car? If your current vehicle doesn’t require major repairs, it may be best to keep it and continue paying off the negative equity before taking on another car loan.

You may also consider taking more time to save for your new car, buy a second-hand car, or refinance the negative equity into your new loan.

Rapid Finance can compare a range of car loans and find the perfect loan for you.


What is it?

Insurance provides cover for damage, liability, and medical costs if you have an accident.

Types of cover

Insurance policies come in all shapes and sizes, so make sure you do your research to understand exactly what your cover includes and the associated costs.

In Australian, every registered vehicle must have compulsory third party (CTP) insurance. While taking out only CTP may seem like the cheapest insurance option, don’t forget you may incur greater expenses in the long-run if you write-off your own vehicle.

Comprehensive car insurance is the most commonly held policy in Australia but of course you will pay higher premiums as it covers other drivers as well as you. Insurance companies take into account things like the make and model of the vehicle, along with where and how it will be stored.

Of course, modifications can also increase your insurance costs, so it’s worth taking the time to get an accurate quote before purchasing your new car.

You may also want to consider taking out insurance on your car loan, in case you run into trouble making the repayments.


mechanic conducting car service supporting image2It’s easy to overlook the ongoing costs of vehicle servicing. Many manufacturers now offer fixed price servicing but be aware, the price of servicing can be vastly different depending on the make and model of your vehicle.

For example a 2017 Holden Spark will cost around $229 for a 45,000-kilometre service, whereas a Mercedes AMG C63 will cost $1,035 for a 50,000-kilometre service.

Now you’ve completed our checklist, you’re ready to make that purchase. Happy car shopping!

Need a car loan?

Rapid finance can provide a free loan assessment today. Apply for a car loan online, all it takes is three easy steps and some personal information. Find out more on our car loans page or call 1300 467 274.