What’s the Smart Way to Pay for Large Purchases over $2,000?

Some purchases are too big for a single pay cheque, or they can’t wait for payday.

You can’t always control when you see a great bargain or when you need a new bed or a car, but you CAN control how you pay for it. There are Smart Ways and Dumb Ways to pay.

Let’s say you need to buy a car. We’ve looked at the options from Cash to Buy Now Pay Later, Car Loans, Credit Cards and Payday Loans.

Below you can see what the cost of each option is, and what the worst case scenario is after a year if you incur the maximum amount of late fees and/or interest.

A red suzuki swift

NUMBER-CRUNCH: SMART WAYS TO PAY FOR A $20,000 SUZUKI SWIFT GL NAVI (VOTED BEST CAR UNDER $20,000 BY CARSGUIDE)

WAYS TO PAYVERDICTBEST CASE*WORST CASE*HOW IT WORKS
CASH
$AUD
SMART$20,000N/A
BUY NOW PAY LATER
Humm
SMART$20,106$20,9306-60 monthly instalments, up to $90 est fee, monthly fee up to $8, late fee $6
CAR LOAN
CommBank Secured Loan
OK$20,535$26,3808% p.a. over 5yrs + $250 upfront + $10/mth
CREDIT CARD
Low-rate card
DUMB$20,781$27,87010% p.a. interest + 0.5%-2% merchant fee + annual fee $50
CREDIT CARD
Standard card
DUMB$21,216$39,30420% p.a. interest + 0.5%-2% merchant fee + annual fee $150
PAYDAY LOAN
Nimble
DUMB$25,600$72,00020% of the purchase + 4% a mth

* ‘Best case’ is the cost to you if the car is paid off after 2 months. ‘Worst case’ is the total cost if the car is still not paid off after 5 years, and you’ve incurred the maximum amount of fees and/or interest.

👉 PRO TIP: PICK THE RIGHT ZERO-INTEREST OPTION
Most ‘Buy Now Pay Later’ platforms have a limit of $1000 or $1500 but there are two that specialise in larger purchases: Humm (up to $30,000) and Zip Money (up to $3000).

HOW DO YOU FIND THE BEST CAR DEALS?

1. Get online!

There’s never been more info available about the car you want. Check the main car-selling websites for examples to get a sense of the price range. Sign up, create a shortlist and get notifications. You can also check car valuation websites such as Red Book to get a price range based on the make, model and year of a car:

carsguide homepage featuring toyota hilux offers

2. Once you know what’s out there, negotiate!

For a used car, use the other examples you’ve seen to make your case for what you’re prepared to pay. For a new car, car broker John Cadogan from Auto Expert says: “Take a look at the recommended, undiscounted, drive-away price on the carmaker’s website and then offer about 10 per cent to 15 per cent less than that to begin with – except during peak sale periods when that discount is likely already being applied.

3. Say no to ‘upsells’

Even if you negotiate a bottom-dollar price for a car, which is a low-margin product, the dealer can make good money out of you through upselling. Say no to heavily marked-up extended warranties, window tinting, “ceramic surface coating” paint protection (tested on planes and used by Boeing!), and $800 a year pre-paid minor damage repair plans that you get offered at the point of sale. Also, don’t just accept their trade-in price or insurance or finance quote without shopping around.

👉 PRO TIP: BUY IN MAY/JUNE OR DECEMBER IF YOU CAN
May/June is the car industry’s end of financial year sale. Not only are dealers trying to hit their annual targets, but buyers are trying to get in before June 30 to claim the tax benefit on a car. In December, that year’s model is about to become last year’s model, so there can also be some red hot deals available.

HOW DO YOU FIND THE BEST DEALS ON LARGE APPLIANCES & HOMEWARES?

Tune into retailer sales & subscribe to their newsletter alerts:

Most major retailers – both the ‘bricks and mortar’ and online types – have dedicated deals pages you can check in minutes.

If you’re on the hunt for an appliance deal, you can also sign up to their email databases and social media profiles to receive notifications.

Some also promise to match certain competitor prices if you find something cheaper. Here are a few examples:

Harvey Norman

Bing Lee

The Good GuysDoor Buster Deals

👉 PRO TIP: PLAY HARD-TO-GET
If you join an online retailer such as the ones below and view a product, they will often send you follow-up emails with a lower price on that item and similar products

Kogan.comHot Deals

eBayDaily Deals

AmazonToday’s Deals

Check bargain forums & price comparison websites (and subscribe to them too):

Keep an eye out for deals sales via online bargain-hunting forums and price comparison websites. Here are some of the best:

Ozbargain – Australia’s biggest online forum for bargain hunters. Members post the best deals they’ve seen and others can vote them up or down. You can also search for whatever it is you’re interested in, eg ‘Toyota Corolla’ or ‘Sleepmaker Bed’

Ozbargain homepage

getprice.com.au – A price comparison site that lists more than 3.5 million products from over 1,200 retailers nationwide and shows you the some of cheapest advertised prices online.

Google Shopping – just type what you’re looking for and Google shows you the range of retailers and prices advertised:

google shopping search showing King Jasper lounge deals

Diarise the big online sales events:

There are now several big online sales events each year – most of them in the lead-up to Christmas – where retailers offer big discounts.

Some are run by a single online retailer such as Kogan or Amazon, while others occur across ALL online retailers.

It’s worth diarising these and subscribing for notifications if you’re in the market for a good deal on a particular product. You might get it half price!

SALEWHEN
Amazon Prime DayUsually July
Kogan First DayUsually Oct
Click Frenzy2nd Tuesday in Nov, plus other events
Singles Day – all online retailersNov
Black Friday – all online retailersNov (the day after Thanksgiving)
Cyber Monday – all online retailersNov (the Monday after Thanksgiving)

👉 PRO TIP: USE THE FREE TRIALS
Both Kogan First and Amazon Prime require membership BUT they offer 30-day FREE trials so you can look at the deals and cancel before the fee kicks in.

WHAT GRANTS & ASSISTANCE ARE AVAILABLE TOWARDS LARGE HOUSEHOLD PURCHASES?

Some state governments or energy retailers will contribute hundreds or even thousands of dollars towards certain household appliances or upgrades.

Usually these grants are to help pensioners and low-income households, or to promote energy efficiency targets. See if you qualify. Here are a few examples:

NEW SOUTH WALES
Appliance replacement offer: up to 50% off fridges and TVs

Get a discount when you upgrade your 10y.o. television or fridge. Offer applies to selected models only. Must be a NSW resident, over 18y.o. And hold one of:

  • Pensioner Concession Card
  • Health Care Card or Low-Income Health Care Card from Centrelink
  • Veterans’ Affairs Gold Card

QUEENSLAND
PeakSmart air conditioning program: up to $400 rebate
Energex
Ergon

Claim up to 5 rebates for purchasing and installing PeakSmart air conditioners or converting an existing air conditioner to PeakSmart:

  • $400 for purchasing and installing a PeakSmart air conditioner with 10kW or more cooling capacity
  • $200 purchasing and installing a PeakSmart air conditioner with 4kW to less than10kW cooling capacity

VICTORIA
Victorian Energy Upgrades program: Up to $2771 back on energy-saving appliances Discounts and special offers are only available from accredited providers. Examples include:

  • Up to $238 rebate on weather-proofing strips, double-glazed windows, chimney dampers and vent covers
  • Up to $102 rebate on recycling your old fridge
  • Up to $2771 rebate for replacing your heater – e.g. a central electric heater with efficient ducted gas
  • Up to $799 rebate for hot water system upgrades – e.g. replacing electric with gas-boosted solar
  • $17 rebate for energy and water-saving showerheads
  • Over $100 rebate for replacing (for example) 8 halogen downlights with LEDs
  • $17 rebate for energy-efficient TVs
  • $17 rebate for energy-efficient clothes dryers
  • $85 rebate for energy-saving pool pumps

Any information is general advice, it does not take into account your individual circumstances, objectives, financial situation or needs.

Check KILL BILLS for more helpful tips about saving.


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