Tips

Application Tips and Best Practices

What should I do before submitting a loan application?

  • Before you submit a loan application, make sure to provide detailed information about your situation. If there are any changes or unique aspects related to your financial situation or the loan itself, please add notes and discuss them with me. This will help tailor the application to your specific needs and improve the chances of approval.

How can I ensure my application is presented effectively?

  • The way an application is presented can significantly impact its success. Here are key steps to follow:

    • Detail Your Situation: Clearly outline any changes or unique factors related to your application.
    • Provide Accurate Information: Ensure all information provided is accurate and complete.
    • Discuss Challenges: If there are potential issues with approval, communicate these to me. I will advise you on how to address them effectively.

What should I do if my application is not likely to be approved?

  • If an application is unlikely to be approved, I will review all the information and discuss the potential issues with you. I will provide guidance on how to address these issues or suggest alternative solutions to increase your chances of approval. My goal is to support you in navigating the application process within legal and ethical boundaries.

How do you support clients through the application process?

  • I am committed to working with you to ensure the best possible outcome for your application. I will provide:

    • Personalized Advice: Based on your specific situation.
    • Clear Communication: About any potential issues and how to address them.
    • Ethical Support: I will not break any laws to secure approval, but will work diligently to present the strongest application possible.

    Feel free to reach out if you have any questions or need assistance with your application.

How should I declare children who live with me part-time?

If you have two children living with you but only part-time (50% of the time), you can declare them as one dependent for the purpose of the loan application.

How should I handle child maintenance payments for children who do not live with me?

If you pay child maintenance for children who do not live with you, declare the child maintenance payments. In this case, you can show zero dependents on the application, as long as you include the higher payment amount you are making or the agreed outgoing amount stated in the child support documents.

What if my child is living at home but is financially independent?

If you have a child living at home who is financially independent (e.g., working and supporting themselves), they do not need to be declared as a dependent on your loan application.

Feel free to reach out if you have further questions or need assistance with declaring dependents on your loan application.

Living Expenses in Loan Applications, Managing Previous Finance Applications

How should I budget for a loan application?

To budget effectively, review your bank statements to determine your actual spending. Use these figures when filling out your loan application to ensure accuracy.

How should I handle mortgage or rent payments if my partner contributes?

If you have a mortgage or are renting and your partner contributes to the payments, you can generally declare only half of that payment. Some lenders may require proof of your partner’s income, while others may not. Providing both payslips upfront can give us more options, but it’s not always necessary.

What income and expenses should I declare?

Declare all sources of income, including payslips, Centrelink benefits, pensions, or income from investment properties. Include all expenses such as mortgage or rent, utilities, and credit card payments. Lenders will review your credit file to see your open loans and credit card balances.

How do lenders assess living expenses?

Lenders use the Household Expenditure Measure (HEM) to calculate living expenses. This can vary between lenders and may include a scaled HEM based on your income. For example, one lender might estimate living expenses for a single person at $1,250 per month, while another might estimate $1,500. They will consider the higher amount between your declared expenses and their internal HEM figures.

How do credit card expenses affect my application?

Credit cards are calculated as an expense at 3.5-4% of the card’s limit. For instance, a credit card with a $10,000 limit and a $0 balance would be calculated as $400 per month in expenses.

What are the implications if my living expenses exceed my income?

If your living expenses exceed your income, it may impact your ability to repay the new loan. For example, if your total outgoings are $3,750 per month and your income is $5,000, there should be enough leftover to cover loan repayments. Each lender has different criteria, and prime lenders have strict guidelines. Subprime lenders may be more flexible but often come with higher rates and fees.

How can I ensure my application is accurate?

Be transparent about your financial situation when completing the application. Filling out the application on my website will allow me to review your profile and provide more accurate feedback on your situation.

Feel free to contact me if you need assistance or have questions about your living expenses and loan application.

What should I be aware of if I have had recent finance applications?

Recent finance applications on your credit file can lead to lenders asking about any inquiries in the last six months. This is due to responsible lending guidelines, as lenders need to ensure you’re not applying for multiple loans simultaneously, which could indicate financial distress or overcommitment.

Why do lenders inquire about previous applications?

Lenders inquire about previous applications to ensure you’re only pursuing one loan at a time. If you’ve been approved for multiple applications, lenders want to verify that you’re not planning to use multiple approvals to finance multiple purchases, which could lead to financial strain.

How can I prepare for questions about previous finance applications?

Prepare to answer questions about recent credit inquiries by having details ready about any past applications and approvals. Being transparent and providing clear explanations can help expedite the approval process.

What should I check before applying for a new loan?

Review your credit file to ensure it accurately reflects your financial situation. Closed accounts might take time to be removed, and open credit cards with a $0 balance should be accounted for. I can review your credit file before you apply to help address any discrepancies or issues.

How can discussing my credit file with you help?

By discussing your credit file with me before applying, we can address any potential issues or discrepancies, ensuring that your application is as accurate and strong as possible. This can help prevent delays and improve the likelihood of a successful approval.

Feel free to reach out if you need help reviewing your credit file or have questions about managing previous finance applications.

Buying a Car

How can I compare multiple car makes and models?

Visit a car supermarket where you can see a wide range of vehicles displayed in categories. This allows you to compare different makes and models side by side without dealing with aggressive sales tactics. Although these dealerships often have fixed prices, it’s worth asking about discounts. Be aware that they might sell ex-rental or ex-mine site vehicles, which are often well-restored but might come with higher price tags.

What should I consider when visiting a car supermarket?

Car supermarkets typically have a high turnover of vehicles and may push warranties and finance options. While they often work on lower profit margins, their stock may not always be the cheapest, so it’s essential to compare prices. Once you’ve narrowed down your choices, explore other dealerships and private sales for potentially better deals.

How can I ensure I don’t end up with a problematic vehicle?

For cars under five years old, or Japanese/Korean cars under 10-15 years old, you’re generally less likely to encounter major issues. To further assess reliability, search for reviews and owner experiences on YouTube. This will provide insights into common problems and maintenance tips, which can be particularly useful when considering used cars or electric vehicles.

What are the considerations for high-performance and luxury cars?

High-performance and luxury cars often come with higher maintenance costs, including tyres, brakes, insurance, and fuel. These costs can be significantly higher compared to standard vehicles. If you value performance and luxury, be prepared for these additional expenses.

How important is it to choose the right vehicle?

Choosing the right vehicle is crucial as it impacts your satisfaction and financial investment. For example, I once bought an economical car but changed it within a year due to boredom. Take your time to research and select a vehicle that fits your needs and preferences to avoid making frequent changes.

Feel free to reach out if you need further assistance in choosing the right car or have any specific questions about vehicle options.

What should I look for when inspecting a car?

Oil Leaks: Check where the car has been parked for signs of oil leaks. You can also look underneath the car. Oil leaks can be costly to repair and are often not covered under warranties.

Cold Start: Watch the car start from cold. Listen for unusual rattles and check for a large puff of smoke. This can indicate potential engine issues.

Service History: Ask for the service history and find out when the last service was done. Taking a picture of the last service stamp and contacting the service center can reveal if any major repairs were advised but not completed.

Timing Belt: Check if the timing belt is due for replacement. Google the intervals and costs associated with this maintenance to avoid unexpected expenses.

Bonnet and Panels: Examine the bolts on the bonnet hinges. They should have no paint damage; cracks in the paint can indicate that the panel has been removed. Look for overspray or new panels as signs of previous paintwork. While these issues don’t necessarily mean the car is a no-go, they warrant further investigation.

Should I get a professional inspection?

Yes, it’s highly recommended:

Independent Inspectors: Companies like Todd offer thorough inspections for $200-$250, often providing more detailed reports compared to larger companies.

Mechanic Inspection: You can ask to take the car to your own mechanic or have your mechanic inspect it.

Supercheap Auto: They offer a service for $30 ($24 for members) that plugs into the car’s computer to read stored faults. Historical fault codes may appear, which can be either benign or indicate current issues.

Q: What are common inspection services

What are common inspection services and their costs?

Independent Inspectors (e.g., Todd): $200-$250

Larger Companies (e.g., Redbook): Up to $350

Supercheap Auto Diagnostic Service: $30 ($24 for members)

Having a professional inspection can provide peace of mind and potentially save you from costly repairs.

What’s the most important piece of advice when buying a car?

Keep emotions out of the purchase. Emotional decisions can lead to trouble, especially when investing a significant amount in a new car.

Slow Down: Before making a decision, take your time. Consider if you genuinely need the car and discuss it with your partner. Evaluate if it fits your and your family’s needs compared to other priorities.

Pre-Discussion: Have a realistic discussion with your partner about the timeframe for purchasing the car. This helps in making a well-considered decision rather than an impulsive one.

Stay Professional: Approach salespeople with respect and politeness. Treating them with a cold shoulder or rudeness can hinder negotiations and create unnecessary tension. A friendly demeanor can foster a better relationship and often leads to more favorable deals.

Why is it important to plan your financing before visiting a dealership?

Peace of Mind: Securing your financing in advance minimizes potential issues and provides reassurance that the funds are ready.

Know Your Repayments: With pre-approved financing, you know exactly what your repayments will be, making budgeting easier.

Show Seriousness: Presenting a pre-approval to the seller signals that you are a serious buyer, which can strengthen your negotiating position.

Dealer’s Perspective: Salespeople prefer buyers with pre-approval as it reduces the risk of losing deals due to financing issues.

Quicker Purchase: Having financing lined up often means you can complete the purchase more swiftly.

What should you do before visiting a dealership?

Research Common Problems: Google the brand and model of the car you’re interested in to identify common issues. This helps you avoid cars known for frequent problems and makes you a more informed buyer.

Have a Backup Plan: Schedule to view another car after the one you’re considering. This reduces the pressure to buy on the spot and provides a fallback if the first option doesn’t meet your needs.

Manage Pressure: Inform the salesperson that you have another car to view. Whether true or not, it gives you leverage and a reason to take your time, helping avoid hasty decisions.

Understand Contractual Obligations: In WA, a signed dealership contract is legally binding. If you change your mind after signing, the dealership can take legal action for up to 15% of the car’s purchase price. However, if you place a deposit and cannot secure financing, you should be entitled to a refund as the contract becomes invalid.

How Dealerships Work

How are salespeople typically compensated at car dealerships?

Commission: Salespeople generally earn about 20% of the profit from the car’s sale. This is on top of their base wage.

Bonuses: They may receive additional bonuses if they meet specific sales targets.

Kickbacks: If you finance through the dealership, the salesperson often gets a kickback or incentive, further increasing their earnings.

How can you gauge the quality of a dealership?

Salesperson Attitude: Most salespeople are friendly and motivated to help. Statistically, you’ll likely encounter a salesperson who is pleasant and professional.

Dealer Reputation: Research the dealership’s reputation online. Look at reviews on Google Maps and other review platforms. Be cautious if a dealership has a history of negative feedback or unprofessional behavior. For example, a dealer threatening legal action in response to a negative review is a red flag and indicates poor customer service.

Trade Ins

What should I consider if I have an older or expensive-to-repair car as a trade-in?

Know Your Options: Let the dealership know you might sell your trade-in yourself. If you’re short on time or patience, some local dealers advertise to buy cars and might offer more than the dealership. You can arrange for the dealer who buys your car to pay the dealership where you’re purchasing your new car directly. This simple tactic can save you thousands.

Selling Privately: Listing your car on platforms like Gumtree or Facebook Marketplace can attract wholesale buyers or private buyers willing to pay a higher price. While private sales can be time-consuming and come with risks like scams, they often yield a better return compared to trade-ins.

Prepare Your Car: Invest in detailing to enhance your car’s appearance. A clean, well-presented car can significantly increase its value. Mobile detailers or shopping center services can do this for around $150. If you’re in a hurry, a drive-through car wash is a quick option.

How can I get the best trade-in offer?

Shop Around: Visit several dealerships and get trade-in offers from each. Dealerships that advertise buying cars often pay more for a trade-in they have seen in person compared to one described over the phone.

Negotiate: If you strike a deal with one dealership for your trade-in, they might pay the following dealership directly and potentially even provide transportation for you to collect your new car.

Research Market Value: Check online listings to see what similar cars are selling for in your area. Price your car $2,000–$3,000 less than the cheapest comparable car to set a realistic trade-in price. Avoid relying solely on Redbook valuations; searching by price low to high will give you a better idea of current market values.

Consider Timing: If possible, negotiate with the dealership to sell your car privately. For example, if you buy a car on a Saturday and pick it up the following Saturday, you’ll have time to advertise and sell your old car in the interim.

Can you recommend any specific dealership for trade-ins?

Recommendation: My brother, who runs a dealership in Rockingham, is highly rated and known for offering fair market prices for trade-ins. You can contact him via Burnett Cars for a valuation. He has a strong reputation for treating clients well and providing honest trade-in values.

What should I do if I decide to sell my car privately after trading in?

Notify the Dealership: If you decide to sell your car privately, inform the dealership before signing the contract. Most dealerships will allow you to sell your car yourself and bring the cash to them. This can give you extra funds to put towards your new car or other expenses.

By taking these steps, you can maximize the value of your trade-in and potentially save money on your new car purchase.

Negotiating Car Prices and Trade-Ins

How can I focus the negotiation on the price of the new vehicle rather than the trade-in value?

Separate Negotiations: Start by negotiating the price of the car you’re interested in, leaving the trade-in value out of the conversation. This keeps the focus on getting the best deal for the new car.

Trade-In as a Last Resort: Once you have agreed on the price of the new vehicle, then bring up the trade-in. This ensures that the dealer doesn’t use the trade-in value to manipulate the price of the new car.

Should I ask for a discount, and how can I support my request?

Always Ask for a Discount: Even if a dealership advertises fixed prices, it doesn’t hurt to ask for a discount. It can sometimes lead to savings, especially if you have other offers or options available.

Provide Comparisons: If you find cheaper local alternatives for similar vehicles, use this information to negotiate. Show them comparable cars that are less expensive to make a case for a discount on their vehicle.

Check Stock Duration: Ask how long the car has been in stock. Vehicles that have been on the lot for a long time may be eligible for a discount, as dealers want to move them quickly to avoid extra costs.

How can I use stock duration to my advantage?

90-Day Rule: If a car has been in stock for over 90 days, it may incur additional interest costs for the dealership. Use this as leverage to negotiate a better price.

Observe Details: Look for clues in advertisements about how long the car has been available. Seasonal changes in photos or dated images can indicate how long the car has been on the lot.

What should I know about dealership advertising and contacts?

Avoid Car Sales Charges: Dealerships pay fees for inquiries made through Car Sales. By finding their contact information elsewhere (e.g., from the bottom of their advert), you can avoid these fees and possibly start negotiations on a friendlier note.

Check Reviews: Research the dealership’s reputation through reviews on Google Maps or other review sites to ensure you’re dealing with a reputable seller.

Explore Alternatives: Websites like AutoTrader and Facebook Marketplace offer alternative ways to find and contact dealers. Be cautious of fake ads on Marketplace and never give deposits until you’ve inspected the vehicle.

Can I negotiate the contract signing process?

E-Signing: You don’t always need to sign the contract in person. Many dealerships offer e-signature options, which can save you time.

Verbal Agreements: Agreeing to the deal verbally over the phone can sometimes aid negotiations. When you’re not physically present at the dealership, they might be more inclined to offer better terms.

Is it worth looking at interstate options?

Interstate Purchases: In markets like WA, where car prices are high, looking for vehicles in other states might be worthwhile. Shipping costs and additional inspections can be offset by the savings on the vehicle itself.

Cost Considerations: Factor in the cost of shipping ($1,600 – $2,500) and any additional inspections required when considering an interstate purchase. Sometimes, this can still result in a better overall deal.

Buying From Auctions

What are the risks of buying a car from an auction?

Limited Warranties: Auctions, especially platforms like Grays, often provide minimal or no warranties beyond the initial “turn-key” warranty, which expires as soon as the car is driven. This can be risky if the car has hidden issues.

Risk of Buying Lemons: Dealers might use auctions to offload cars with significant problems. Facebook groups and news articles often highlight issues with vehicles purchased from auctions

Are there safer auction options?

Safer Auction Houses: Auctions like Pickles or Manheim tend to be safer than others. They may offer more transparency and better-quality vehicles compared to platforms known for high-risk transactions.

Inspection and Warranty: Some auctions provide warranties and mechanical inspections, which can reduce risk. Check the auction’s offerings and terms carefully before participating.

How do auction fees affect the deal?

High Fees: Auctions often charge significant fees, which can make the final price comparable to buying from a well-priced private seller. Consider these fees when calculating the total cost.

Trade-In Considerations: If you have a trade-in, you’ll need to manage this separately, as auctions typically do not handle trade-ins.

What should I know about the buying process at auctions?

No Test Drives: At auctions, you usually won’t have the opportunity to test drive the car or arrange an independent mechanical inspection. This increases the risk of purchasing a vehicle with unknown issues.

Transparent Pricing: Some auctions provide a “buy-it-now” price and offer more transparency in their pricing, which can be advantageous. Be sure to research the auction’s process and what is included in their services.

Is it worth buying from an auction?

Weighing the Risks: While auctions can offer bargains, the risks and potential hidden costs make them less appealing compared to more traditional purchasing methods. If you choose to buy from an auction, thorough research and understanding of the terms are crucial.

By carefully considering these factors and conducting thorough research, you can make a more informed decision about buying a car from an auction.

Stamp Duty

What is stamp duty?

Stamp duty is a government tax applied to vehicle purchases. For new cars, the stamp duty is usually included in the price. For used cars, it is typically an additional cost.

How is stamp duty handled by dealerships?

Most dealerships will handle the stamp duty payment on your behalf when you purchase a vehicle. This is often part of their standard service and can be included in the final price of the car.

Can stamp duty be included in financing?

Lenders generally have no problem financing stamp duty if the vehicle’s book price is agreed upon. However, this is usually not applicable for private sales.

Can I negotiate stamp duty in the deal?

Yes, you can negotiate with dealerships to include stamp duty in the overall deal instead of offering a discount. This might be more common with cheaper cars. The longer you wait to make a decision, the better your chances of having it included, but be mindful that someone else might buy the car in the meantime.

How do I calculate stamp duty?

To calculate the stamp duty, use the online calculator available on the relevant government website or consult with your dealer or financial advisor for accurate calculations.
https://www.transport.wa.gov.au/licensing/vehicle-licence-duty-calculator.asp

Understanding and planning for stamp duty will help ensure that you are prepared for all costs associated with purchasing a vehicle.

Aftercare / Protection

Paint Protection & Aftercare Options:

DIY Installation:

Cost: $100 to $1,000, plus additional $30 for a clay bar and microfiber cloths.

How-To: Purchase a bottle of paint protection from eBay or Amazon and apply it yourself. Watch YouTube tutorials for guidance. Although this can be a cost-effective approach, be cautious as improper application might lead to issues like needing to fix minor mistakes with fine sandpaper and a machine polisher.

Independent Detailers:

Cost: Varies depending on the detailer and the protection kit used.

How-To: Visit an independent window tinter or detailer. They often have access to trade-only products and usually take pride in their work. Mention that Eric Burnett referred you to potentially get a better price. Trusted detailers, like AAA_windscreens, are recommended for their reputation and quality of service.

Dealership Installation:

Cost: Typically higher than DIY or independent detailers.

How-To: The dealership can install paint protection as part of their aftercare package. This often includes a guarantee for free repairs if the paint is damaged. Dealerships may also offer additional services like window tinting. Be aware that opting for dealership-installed protection may also lead to additional stamp duty due to the increased cost.

Window Tinting:

Recommendation: Choose newer Ceramic tints over older carbon/metal-based tints. Ceramic tints are more effective at blocking heat and have less impact on mobile signals.

Warranty

Warranty Overview

Types of Warranties:

Manufacturer Warranty:

Cost: Free

Coverage: Varies by manufacturer; generally lasts 3 to 7 years or a certain number of kilometers.

Details: Covers defects and issues related to manufacturing. Available whether you buy from a dealership or private seller. A full-service history might help with a goodwill claim from the manufacturer if the warranty has expired.

Statutory Warranty:

Cost: Included with the purchase from a dealership.

Coverage: Generally limited to making the car road-worthy. This warranty is minimal and does not cover items like batteries. A good dealership might offer more assistance, but coverage is limited by law.

Paid-For Warranties:

Insurance-Backed Warranties:

Regulation: APRA-regulated.

Coverage: Typically offers better protection with fewer disputes due to capped commission (20% of total RRP). Often available through brokers and can be offered on private sales.

Details: Provides various levels of cover based on the car’s age and kilometers, with specific limits per claim.

Mechanical Breakdown Products:

Regulation: Not APRA-regulated.

Coverage: Offers more discretion to the provider regarding claims. Not classified as a warranty to avoid regulation.

Details: Varies in coverage and terms; less protection compared to insurance-backed warranties.

Choosing a Warranty:

Considerations: Assess the manufacturer’s warranty duration and current coverage. With newer cars being more reliable, a paid-for warranty may or may not be necessary, depending on how long the manufacturer’s warranty still has left.

Claims: Some clients have claimed significant amounts ($30,000+), while others never use their warranties.

Service Requirements: Warranties often require servicing at recommended intervals. Missing a service could void the warranty.

Additional Warranty Notes:

Free Warranties: Some dealerships offer free warranties for up to 3 years. These typically cover limited parts (e.g., engine and transmission) and may require servicing at the dealership. The coverage is often limited to $500 per claim, and the dealership might benefit more from these.

Roadside Assistance: Available cheaply if you shop around, often costing less for three years than one year with major companies. It can be a valuable addition to your warranty.

When considering a warranty, evaluate the coverage, costs, and requirements to determine if it aligns with your needs and the car’s warranty status.

PPSR Search / Purchase of Financed Car

PPSR Search:

Purpose: Ensures the car isn’t recorded on the damaged register and checks for any outstanding finance.

Cost: $2 for a government PPSR search or free through Budget Direct.

Details Required: VIN number.

Report Information:

Damaged Register: Shows if the car has been deemed damaged beyond economical repair.

Finance Owing: Indicates if there is any outstanding finance on the car.

Handling Outstanding Finance:

Procedure: Obtain a payout letter for the existing loan. Lenders typically require the encumbrance to be cleared before settling the loan.

Settlement Process: The lender will pay both the finance company and the seller simultaneously. For instance, with a car price of $30,000 and $15,000 in outstanding finance, the finance company receives $15,000, and the seller gets $15,000 at settlement.

Damaged Register:

Impact on Purchase: Cars on the damaged register might have restricted financing options. Consider a lower price due to potential resale value reduction (up to 30% less).

Verification: Ask for pre-damage pictures and details about why it was recorded. Flood-damaged cars are generally not roadworthy due to safety issues.

Additional Car History Searches:

Comprehensive Reports: More detailed histories, including recorded kilometers, are available for a higher cost. For example, Carify offers a more in-depth report for $10.

Key Takeaways:

Always perform a PPSR search to verify the car’s history and outstanding finance.

If buying a car with a damaged record, ensure you understand the potential impacts on financing and resale value.

Consider additional history checks if you want more detailed information on the vehicle’s past.

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