Flipping a used car back to its former glory is an art that can be a good return on investments. However, without doing your research you could end up purchasing a lemon that could drain your finances. These four questions can help you know whether fixing up an old car is worth your time and money.
1. Have you checked the cost of repairs?
This is the first question that will come to mind, and it pays to put some considerable amount of time in before putting your hard-earned cash on the car. One thing to consider is that a used car at this stage would have depreciated considerably, which means that your chances of being at the mechanics will increase. Calculating the costs of repairing your used wheels can give you insight as to whether it would be worth financing or not. Also, check if the car has an extended warranty that will protect you from footing major mechanical failures.
2. Is it worth the long-time investment?
Not many Aussies are able to afford a new car off the bat. According to US auto analysts Manheim, the Australian used car market is estimated to be around 3 million units per annum. Although there are quality used vehicles available on the market, it still needs to be considered whether it is worth the investment or not. Consider whether it would be worth pumping in cash into a car that needs to be kept in a safe state and if it is worth forking out money on repairs in the long run. If you see the cost of doing this mounting up fast, then it is time to consider a new vehicle.
3. Do you know the cars history?
You may have spotted a used car that has a great price tag on it that you can’t possibly pass up. However, before you make an offer make sure that you run a quick car history check on websites such as PPSR or CarHistory. By using the cars VIN number, you will be able to check if the car has been stolen, has any finance owing on it, it’s service history, previous owners and more. This can give you a good insight into what you are investing in and whether it’s worth your time and money. Not doing a car history check can lead to a costly mistake.
4. Is it worth taking out finance for?
Most Australian cars have finance attached to them. According to the Royal Commission, 90% of all car sales were purchased through finance. Running your numbers can help you make a sound decision on whether taking out finance for the car is worth it or not. The last thing that you want is to purchase a lemon that is on its last wheels and a financing that will take you 3 years to pay off, but the car taps out on its first year of ownership. It is also helpful to check the ongoing costs of your loan and compare them against the expenses of your car to get an idea.