Car manufacturers are constantly releasing new affordable models without sacrificing features and performance. In this article, we’ll take a look at some of the latest budget-friendly cars in Australia that you may want to consider. Whether you’re in the market for a sedan, hatchback, or SUV, there are plenty of options available to suit your needs and budget.
Should I get a car loan or dealer finance?
When it comes to financing a car in Australia, there are two popular options available: dealer financing and online car loans. Dealer financing refers to finance options offered by a car dealership that secures funds through a lender, while online car loans are obtained through banks, credit unions, or online lenders.
Dealer financing may offer lower interest rates on specific makes and models, but these rates may only be available on certain vehicles. Online car loans, on the other hand, may offer more flexibility in terms of interest rates and loan amounts. Additionally, online car loans may have fewer fees and charges, as they don’t involve a middleman such as a car dealership.
If you choose to get dealer financing, your car payment plan will be similar to a normal car loan, requiring you to make regular repayments over a set period to cover the cost of the vehicle. However, dealer financing may have more restrictive repayment terms, such as balloon payments at the end of the loan term, which can help lower regular repayments.
With online car loans, repayment terms may be more flexible, and the application process is typically faster and more convenient than with traditional car loans. Online lenders may also offer pre-approval, which can give you a better idea of your budget when shopping for a car.
Ultimately, the choice between dealer financing and online car loans will depend on your circumstances and financial goals. It’s important to carefully consider the costs and features of each option and seek professional advice if needed before making a decision.
Here’s a comparison table between dealer finance and car loans:
|Feature||Dealer Finance||Car Loan|
|Interest Rates||May be lower on specific makes/models; 0% rate deals may indicate a higher purchase price for the car||Generally competitive, may vary by lender; Using your car as security lets you take advantage of lower rates|
|Fees and charges||Varies by dealership and lender; Early repayment costs may apply||Establishment fees, ongoing fees, early repayment fees|
|Repayment terms||More restrictive, may include balloon payments; usually 3 to 4 years||More flexible, usually 1-7 years|
|Security for a loan||The car itself||The car itself, Property or assets|
|Availability||Only through a car dealership||Available through banks, credit unions, and online lenders|
It’s important to note that the specific features, costs, and terms of dealer finance and car loans may vary based on the lender or dealership you work with. It’s important to compare your options carefully and seek professional advice if needed before making a decision.
Financing for brand new cars vs used cars
When it comes to buying a car, there are pros and cons to both new and used options. Here are some factors to consider when deciding between buying a new or used car.
New car pros
- Choice: Buying a new car allows you to choose your preferred make, model, and colour, as well as any additional features and options that are important to you. This can help you get the exact car you want, without having to compromise on features or settle for something that doesn’t meet all of your needs.
- Warranty: New cars typically come with a manufacturer’s warranty that covers any defects or mechanical issues that may arise during the warranty period. This can provide peace of mind and help you save money on repairs or replacements that may be needed.
- Car loan rates: Interest rates on loans for new cars are often lower than those for used cars, which can help you save money on financing costs over the life of the loan. This is because lenders view new cars as less risky than used cars since they are less likely to have mechanical issues or other problems that could lead to a default on a loan.
- Latest Technology: New cars often have the latest technology features, including infotainment systems, advanced safety features, and more fuel-efficient engines.
- Better Fuel Economy: Newer cars are often more fuel-efficient, saving you money in the long run on gas expenses.
- Less Maintenance: Newer cars typically require less maintenance in the short term, as they haven’t yet had time to accumulate wear and tear.
- Better Resale Value: Newer cars tend to have a higher resale value than used cars, which can help you recoup some of your investment if you decide to sell the car later on.
New car cons
- Pricing: New cars are generally more expensive than used cars, and their value depreciates rapidly over the first few years of ownership. This means that even if you get a lower interest rate on your car loan, you’ll still be paying off a vehicle with a higher price tag. Additionally, new cars often come with higher insurance premiums and taxes, which can add to the overall cost of ownership.
- Delivery delays: Depending on the level of demand for new cars and supply chain disruptions, you may have to wait for your new vehicle to arrive. This can be frustrating, especially if you’re in urgent need of a new car. During the COVID-19 pandemic, for example, many car manufacturers experienced delays in production and shipping, leading to longer wait times for new car orders.
- Loan limits: Some lenders may have specific criteria for the makes and models of new cars they are willing to finance. This is because lenders want to be confident that the vehicle will retain enough value for long enough to secure the loan. If you’re looking to purchase a new car that falls outside of a lender’s standard criteria, you may find it harder to get a car loan approved or may face higher interest rates.
Used car pros
- Pricing: Used cars are generally less expensive than new cars, which can make them a more affordable option. This is because a used car has already gone through the period of greatest depreciation, meaning its value has likely stabilised. The older a car is and the more mileage it has, the lower its price may be. However, it’s important to remember that the condition and history of the car can also impact its price.
- No delays: If you find a used car for sale that meets your preferences, you can usually drive it away without having to wait for delivery. This can be a great advantage if you need a car quickly, as you can often find a used car in good condition relatively quickly.
- Dependable: If a used car has been well-maintained, it can be as reliable as a new car. Many popular models have a reputation for longevity and may have plenty of access to servicing and spare parts, making them a dependable option.
Used car cons
- Limited options: When you purchase a used car, you are subject to the whims of the used car market. You might need to reevaluate your alternatives or explore outside of what is closest to you if none of the vehicles you desire is for sale there.
- Require experience: If you aren’t knowledgeable about cars, it could be difficult to recognise warning signals that a secondhand car hasn’t been properly maintained, which could lead to future mechanical problems. Although some newer used automobiles may still be covered by warranties, it’s more probable that you will have to pay for repairs on used cars that break down.
- Higher loan rates: Loans for used cars may have higher interest rates than loans for new cars because lenders could view used cars as riskier. Used cars are more prone to breakdown or be written off due to their age and wear and tear, and their lower worth makes it difficult to acquire a loan.
- Less modern features: Used cars are likely to have fewer modern features compared to newer cars, such as advanced safety features, infotainment systems, and fuel-efficient engines.
- Shorter lifespan: Used cars have a shorter lifespan compared to new cars, as they have already been driven and may have existing wear and tear issues. This means that you may need to spend more money on maintenance and repairs as the car ages.
- Potentially higher insurance costs: Some used cars may have higher insurance costs, especially if they are older or have a history of accidents or damage. This can increase the overall cost of ownership for a used car.
Affordable Cars in Australia
Here are some affordable cars in Australia.
Light cars are small and economical vehicles that are easy to maneuver, making them an excellent choice for city driving. They are generally cheaper to buy and run than larger cars, making them ideal for people on a tight budget. Here are some examples of affordable light cars in Australia:
- Kia Picanto: This compact car is a popular choice for first-time buyers. It offers great fuel efficiency and comes with a five-year warranty.
- Suzuki Swift: The Suzuki Swift is a reliable and affordable car that is perfect for urban driving. It has a spacious interior and comes with a five-star safety rating.
- Toyota Yaris Hybrid: The Toyota Yaris is also a great option for those looking for a practical and efficient car but with the added benefits of a hybrid powertrain. It is powered by a combination of a petrol engine and an electric motor, which work together to provide excellent fuel economy and low emissions.
- Hyundai Accent: The Hyundai Accent is a reliable and affordable car that is perfect for city driving. It has a comfortable interior and comes with a five-year warranty.
- Mazda 2: The Mazda 2 is a fun-to-drive and stylish car that is great for urban driving. It has a comfortable and well-designed interior and comes with advanced safety features.
Small cars are a popular choice in Australia, particularly for urban driving. They are typically more affordable than larger cars, making them an attractive option for people on a tight budget. Small cars also tend to be more fuel-efficient, which can save you money on petrol. Here are some examples of affordable small cars in Australia:
- Volkswagen Polo: The Volkswagen Polo is a stylish and well-designed car that is great for city driving. It has a spacious interior and comes with advanced safety features.
- Ford Fiesta Econetic: The Ford Fiesta Econetic is a fun-to-drive car that is perfect for urban driving. It has a sporty design and comes with advanced technology features.
- Honda Jazz: The Honda Jazz is a practical and versatile car that is great for families. It has a spacious interior and comes with advanced safety features.
- Hyundai i30: The Hyundai i30 is a reliable and well-built car that is perfect for everyday driving. It has a comfortable and stylish interior and comes with advanced technology features.
- Kia Rio: The Kia Rio is a popular choice for first-time car buyers. It has a spacious cabin and comes with a seven-year warranty.
Medium cars are perfect for families and individuals who want comfortable and spacious cars. These cars offer more room and features than smaller cars but are still reasonably affordable. Here are some examples of affordable medium cars in Australia:
- Toyota Camry: The Toyota Camry is a reliable and spacious car that is perfect for families. It has a comfortable and stylish interior and comes with advanced safety features.
- Mazda 6: The Mazda 6 is a sleek and sporty car that is great for people who want a more luxurious feel. It has a comfortable and well-designed interior and comes with advanced technology features.
- Hyundai Sonata: The Hyundai Sonata is a spacious and well-built car that is perfect for everyday driving. It has a comfortable and stylish interior and comes with advanced safety features.
- Honda Accord: The Honda Accord is a reliable and practical car that is great for families. It has a spacious cabin and comes with advanced technology features.
- Nissan Altima: The Nissan Altima is a comfortable and well-equipped car that is perfect for long-distance driving. It has a spacious and stylish interior and comes with advanced safety features.
Electric vehicles (EVs) are becoming more popular due to their environmental benefits and cost savings in the long run. They also have a lower cost of maintenance than traditional petrol/diesel vehicles as they have fewer moving parts. Here are some examples of affordable EVs in Australia:
- Nissan Leaf: The Nissan Leaf is a popular choice for those looking for an affordable electric car. It has a range of up to 270km and comes with advanced technology features.
- Hyundai Kona Electric: The Hyundai Kona Electric is a stylish and practical SUV that is perfect for families. It has a range of up to 484km and comes with advanced safety features.
- MG ZS EV: The MG ZS EV is a budget-friendly electric SUV that is great for city driving. It has a range of up to 263km and comes with advanced technology features.
- Tesla Model 3: The Tesla Model 3 is a high-performance electric car that offers impressive range and acceleration. It has a range of up to 655km and comes with advanced technology features.
- Volkswagen ID.4: The Volkswagen ID.4 is a sleek and spacious electric SUV that is perfect for families. It has a range of up to 522km and comes with advanced safety features.
SUVs (Sport Utility Vehicles) are a popular choice for many Australians due to their spaciousness, versatility, and off-road capability. Here are some examples of affordable SUVs in Australia:
- Kia Seltos: The Kia Seltos is a stylish and practical SUV that is perfect for families. It has a spacious cabin, and advanced safety features, and comes with a seven-year warranty.
- Mitsubishi ASX: The Mitsubishi ASX is a reliable and affordable SUV that is great for everyday driving. It has a spacious interior, and advanced safety features, and comes with a five-year warranty.
- Nissan Qashqai: The Nissan Qashqai is a comfortable and practical SUV that is great for urban driving. It has a spacious and well-designed interior, advanced safety features, and comes with a five-year warranty.
- Hyundai Kona: The Hyundai Kona is a subcompact SUV that offers a sporty and stylish design with plenty of practical features. It comes with a range of modern features, including a touchscreen infotainment system, advanced safety features, and a spacious and comfortable cabin.
- Toyota RAV4: The Toyota RAV4 is a popular SUV that is reliable, spacious, and practical. It has a comfortable and well-designed interior, advanced safety features, and comes with a five-year warranty.
4x4s (four-wheel drives) are popular in Australia due to their off-road capability and versatility in challenging terrain. Here are some examples of affordable 4x4s in Australia:
- Suzuki Jimny: The Suzuki Jimny is a compact and capable 4×4 that is perfect for off-road adventures. It has a rugged and distinctive design, four-wheel drive, and comes with advanced safety features.
- Jeep Wrangler: The Jeep Wrangler is a classic 4×4 that is known for its off-road capability and rugged design. It has four-wheel drive, advanced technology features, and comes with a five-year warranty.
- Toyota Land Cruiser Prado: The Toyota Land Cruiser Prado is a versatile and capable 4×4 that is great for off-road adventures and family trips. It has four-wheel drive, and advanced safety features, and comes with a five-year warranty.
- Mitsubishi Pajero Sport: The Mitsubishi Pajero Sport is a spacious and capable 4×4 that is perfect for family adventures. It has four-wheel drive, and advanced safety features, and comes with a five-year warranty.
- Ford Ranger: The Ford Ranger is a popular 4×4 ute that is great for off-road adventures and work purposes. It has four-wheel drive, advanced technology features, and comes with a five-year warranty.
In conclusion, whether to buy a new or used car depends on your individual needs and preferences. While new cars offer a wider range of options and usually come with a warranty, they tend to be more expensive and can be subject to delivery delays. On the other hand, used cars are generally cheaper, with no delivery delays, but may require more experience to purchase, come with limited options, and may have higher loan rates.
Ultimately, it’s important to carefully consider your budget and needs and to do your research before making a decision.