If your teenager is starting to learn to drive, then you may be thinking about purchasing a new or used car for them to help kickstart their time on the roads. However, with so many different car makes and models on the market, it can be difficult to know what vehicle is the best option to help your teenager stay safe behind the wheel.
Understanding what you should look for in a car for your loved one, as well as what car loan is right for you, can help you make a considered and wise purchase that’ll give them the freedom they’re looking for as they work towards getting their license.
Should I buy a new or used car for my teen?
The first step when you’re considering buying a car is deciding whether you’re going to buy it new or used. Depending on your financial situation, you may already be leaning one way or another, but there are other factors to consider when choosing a vehicle for your teenager.
Going with a new car gives you the peace of mind that the car is ready to go. New cars generally come with up-to-date safety features and may be more fuel-efficient than their used counterparts, leading to lower maintenance costs. If you’re looking to purchase a vehicle that shouldn’t cause you any issues for a while, then this might be a sensible choice.
Used cars are often much cheaper than new cars, which may better suit you and your financial situation. A used car also tends to depreciate in value slower when compared to a new car, which may be worth factoring in if your teenager intends to hold onto their first car for a little while. When negotiating the sale of a used car, they may be more flexibility on price, giving you the chance to snag a bargain.
Moody’s Analytics Used Vehicle Price Index1 shows that while used vehicle prices are 13.1% up on last year, they’ve dropped for the third consecutive month as of September 2022. If you’re looking to purchase a vehicle in the future, then it’s worth weighing up your options as more new cars make their way to Australia.
What things should I consider when buying a car?
Price isn’t the only thing that you should consider when buying a car, new or used. Things you may want to consider when you’re looking to buy a car include:
- What safety features does the car have? Look for things like airbags and ABS brakes. Safety features are arguably the most important consideration when buying a car for your teenager.
- How many kilometres has it done, and has it had any major repairs? Keep an eye out for signs of wear and tear if you’re buying a used car.
- Is it an automatic or manual car? This will depend on your teenager’s personal preference and what they’d like to learn to drive.
- What will they use the car for when they get their license? If you’re living regionally, then you might consider buying a 4WD – but this may not be necessary if you’re living in the city.
- (For used vehicles) searching the Government's Personal Property Securities Register before you buy a second hand car will tell you whether the car has a security interest registered against it. A security interest means the car could have money owing on it and could be repossessed from you even though you've paid for it. It’s a good idea to do this either the day before you buy the car, or on the day of purchase to make sure that the information is as up-to-date as possible, and it could prevent you buying a car that is either not the seller’s to sell or is not able to be driven on the road.
Which car loan option is right for me?
Qudos Bank offers three loan options that may help you purchase a new or used car for your teenager. Each of these loans have different benefits, so it’s worth reading through the details of each loan and inputting the details into our handy car loan calculator before making a choice. The loan options are:
Car Loan:* This loan may be the way to go if you’re looking for a car for your teenager. It features a low variable interest rate, a range of repayment options and no account keeping fees, so you can focus on making your repayments. If it’s time to get your teenager behind the wheel, then you can learn more about the loan on our Car Loan webpage. This is a secured loan.
Qantas Points Car Loan:* This loan features a competitive interest rate, the chance to accrue 1000 Qantas Points^ per annum for every $1,000 of your loan balance (credited monthly) and a complementary Qantas Frequent Flyer membership^, subject to terms and conditions. If you’re looking to take out a loan on cars, caravans, boats and motorcycles up to 5 years old, then this may be a loan to consider. You can learn more about the loan on our Qantas Points Car Loan webpage. This is a secured loan.
Personal Loan:^^ If you’re looking at a slightly cheaper used car, then this may be the loan for you. With a loan period of up to 7 years and weekly, fortnightly or monthly repayment options, this loan allows you to borrow between $5,000 and $25,000 to help your teenager secure their first car. You can learn more about our personal loan offering on our Personal Loan webpage. This is an unsecured loan.
How much will my car repayments be?
Want to find out how much your car repayments could be? Using our car loan calculator may help you plan for the future. The calculator could help you understand how much you’ll pay over the life of your loan using details like loan amount, interest rate, loan term and payment frequency so you can consider what’s right for you and your teenager.
Want to speak to a specialist? Reach out by calling us on 1300 747 747.
References
[1] Australia: Datium Insights - Moody’s Analytics Used Vehicle Price Index : Moody's Analytics Economic View (https://www.economy.com/economicview/indicator/aus_vprice/B6ABFA13-D9E3-49E8-B4FC-A35B905E0C28/Australia-Datium-Insights--Moodys-Analytics-Used-Vehicle-Price-Index)
Normal lending criteria, terms and conditions and fees and charges apply.
As the information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs, before acting on the information, consider its appropriateness to your circumstances.
You should read and consider the relevant terms and conditions (available on request) and our Financial Services Guide before deciding whether to obtain any of our financial products or services.
* A maximum amount of $150,000 applies for vehicles up to 3 years old and $75,000 for vehicles between 3 and 5 years old. Minimum amount $10,000 for Car Loans and $15,000 for Qantas Points Car Loans. $150 establishment fee. A loan period of up to 7 years.
^ Qantas Points accrue in accordance with and subject to the Qantas Points Banking Terms and Conditions. You must be a member of the Qantas Frequent Flyer program to earn and redeem Qantas Points. A joining fee may apply, however, Qudos Bank has arranged to provide Qantas Frequent Flyer membership with the joining fee waived to Qudos Bank members who are not already a Qantas Frequent Flyer member and who apply at qantas.com/joinffqudos. Membership and the earning and redemption of Qantas Points are subject to the terms and conditions of the Qantas Frequent Flyer program available online at qantas.com/terms. This offer is non transferable and not available in conjunction with any other offer. Qantas Frequent Flyer membership and each application is subject to approval by Qantas. Qudos Bank recommends that you seek independent tax advice in respect of the tax consequences (including fringe benefits tax, and goods and services tax and income tax) arising from the use of this product or from participating in the Qantas Frequent Flyer program or from using any of the rewards or other available program facilities. Qudos Bank is the issuer, offeror and administrator of the Qantas Points Banking products and is a credit provider and credit licensee under National Consumer Credit laws.
^^ $150 establishment fee.
Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305. The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.
Published October 2022
