Buying a new car – automatic vs. manual vs. hybrid

Posted on July 10, 2015

If you’re looking to buy a new car, you’ve got a few options to try and break down.

Manual vs Automatic

Services

Manual cars are cheaper to service, due to their older parts. Automatic cars are quickly closing the gap, however, that this is already negligible, and will long term not be an issue.

Winner: tie.

Fuel

In the past, it was pretty much a given that manual cars were a lot more fuel efficient than automatic cars.

Nowadays, automatic cars have more gears than before, and even more than manual cars in recent times, which all means that automatic cars are just as fuel efficient as manual cars, and are even sometimes outstripping them in this field.

Winner: tie.

Initial Cost

Manual cars are often cheaper than their automatic counterparts, but there are more and more cases of them being sold at the same prices.

Winner: Manual.

Repairs

The cost of repairing manual and automatic transmission is a big difference. A complete rebuild of a manual transmission might cost between $600 and $1500. The equivalent repair costs for an automatic can run between $3,000 to $10,000 to rebuild the entire clutch system.

Winner: Manual.

Hybrid vs non-Hybrid

Services

There is the myth that hybrids are more expensive to service than non-hybrids, and it’s exactly that – a myth. Generally, the first 5 years (and more) of a hybrid is comparable in service to other cars with regards to cost.

Hybrids can generally save on the costs of brake pads, as they have regenerative braking systems to minimise the wear on the brake pads and extend their life.

Winner: Hybrid.

Initial Cost

The initial cost of a hybrid car will, at least in the short term, exceed the cost of non-hybrid. You’ll need to balance this against the individual car’s cost and it’s fuel efficiency to see how quickly it will pay for itself. The general rule of thumb is a hybrid car should be covering the cost of the difference in 5 years of fuel saving.

Winner: Non-Hybrid.

Fuel

The main attraction of a hybrid is the savings on fuel. Hybrid cars can boast over 20 kilometres per litre. These numbers are largely based on city driving. Take the hybrid out for highway driving, and it quickly loses it’s edge.

Winner: Hybrid

Insurance

Some insurers have lower premiums for hybrid cars, so factor in the costs of insurance. Get some quotes from insurers to factor in the potential savings.

Winner: tie

Repairs

Hybrid critics are quick to jump on claims that Hybrids are more expensive to repair. However, hybrid dealers generally have very long warranty periods. Battery packs are actually doing better in real world situations than expected, and the prices for replacements batteries are continually decreasing.

Winner: Hybrid

At the end of the day, you need to do some hard math. Calculating the fuel savings for hybrid vs non-hybrid is the biggest decision you’ll have to make, and seeing how quickly it outstrips the initial investment.

Travel loans & how to manage your currencies

Posted on June 26, 2015

Whether you are traveling for work or pleasure, having access to spending money in the local currency of your destination is a must. Planning ahead when it comes to money is essential before you leave on an international trip. Here is everything you need to know about travel loans and managing your currency as you travel abroad.

Obtaining Travel Loans

Travel loans allow you to borrow enough to cover your whole trip. These loans include both variable- and fixed-rate options to allow you to budget your payments, and loan terms that range up to seven years are available to allow for a convenient method of paying back the loan. If you find yourself needing to travel without notice, it may be possible to obtain a travel loan in as little as 24 hours.

Determining How Much to Take

How much money you should take on a trip abroad depends on the length of your trip. If you are going for a week, it is recommended that you have access to at least $400 in spending money. This is in addition to the cost of your hotel and transportation. If you are going for longer than one week, simply determine the amount you will need to take based on the $400 per week figure.

Accessing Money Abroad

Exchanging currency before you leave for a trip abroad allows you to carry cash with you in the local currency, but what should you do if you find yourself in a foreign country without access to cash? ATMs are an ideal option that give you access to cash with reasonable exchange rates. However, be sure that your PIN can be used in these foreign ATMs before you leave on your trip. Many ATMs in Europe and the United States only allow you to enter a PIN that is four digits, so you may have to contact your bank to change your PIN accordingly before you go on a trip abroad.

Using Credit Cards Overseas

While using credit cards overseas is a convenient option for you trip, be sure that you read the fine print of your credit card agreement before choosing this option. Some creditors will charge a foreign transaction fee that could add up to 3 percent to the cost of your transactions. While this may not seem like a lot, it can quickly add up.

Some credit cards that are made for travel, and these cards may waive any foreign transaction fees. If you still have time before your trip, consider applying for a credit card that is specifically made for travel to ensure that you can make purchases without worrying about converting your currency or paying hefty fees.

Getting Currency Converted

If you are still planning for you trip, you can get your currency converted at your bank. The exchange rates and fees associated with converting your currency tend to be reasonable at banks, so planning ahead and taking a trip to your bank before you leave is likely to be the best option when you need to carry cash in your destination.

There are websites that offer currency exchange services, but it is important to note that the fees may be high. If you wait until you have arrived in your destination and need to exchange currency in a convenient location, you can do so in airports or at your hotel. However, these options are the most expensive due to convenience.

The cheapest time to travel

Posted on May 29, 2015

Travel can be expensive. Especially for Australians. We’re so far from Asia, Europe and the Americas that even just in getting to our destination, our budget can be blown before we even leave our shores.

We’ll break down when to go and what time to book to make your money (and you) go further.

Flights

Flights are the big money saver. Australia is so far from most popular destinations, that it will be your biggest expense.

When to book flights

Travel agents say depending on your destination, the unspoken best time to book is around 49 days before you plan on traveling. Some countries that buck this trend are USA (booking 5 months in advance) or Turkey (3 months in advance) can be a 50% difference than booking too late. That’s just a bit under 2 months before you’d need to go. Booking too early (more than 5 months before), or too late (within a month) will have a pretty sizeable impact on the final cost.

When to leave and return

Days of the week you choose to fly can make a big difference, too. Everyone wants to fly out on a Friday or on the weekend, and get back on a Sunday. Leaving and returning on a mid week day, such as Tuesday or Wednesday, can sometimes even be a 50% difference.

Flexibility

Being able to shift your holiday forward or backwards a week can be a big advantage to avoid events such as sporting competitions you may not be interested in, but which can drive up the seasonal price and popularity, unwittingly.

Seasonality

There are a few considerations to make when deciding what time of the year to travel.

School Holidays

School holidays will always be busier and more expensive. Keep an eye on the school calendar and make sure you book outside of the school holidays.

Off peak season

A lot of destinations are a lot busier (and expensive) in their peak season. Think Japan during cherry blossom season, Europe during their summer, Munich during Oktoberfest, Hawaii during summer, Rio de Janeiro during Carnaval. Plan in their off seasons, and not only will you avoid the crowds, but you’ll save bucketloads on flights and accommodation, too. For example, accommodation in Rio de Janeiro during Carnival, World Cup or Olympics time can be between 3 to 6 times more expensive. So unless it’s a must, try to avoid traveling around special events that aren’t appealing to you and will just drive up the costs of everything (even food and souvenirs!).

So the first decision you’ll need to make is when you want to travel. Find an off peak season to the destination you’d like to go to. Once you’ve got a rough, flexible time of year to go, start planning your trip, starting with the flights, around 2-3 months before your intended travel days, and make sure you search within a few weeks earlier and later (and on different days of the week, leaving and returning), until you can find a price and itinerary that you’re happy with. And spend your money on the holiday, not on the flights!

Renovations – the costs the shows don’t show

Posted on May 25, 2015

We’ve all seen the renovation shows. The Block, Renovation Rescue, House Rules – the list goes on and on. There are countless hours of TV everyday showing you how you can make your house exponentially more valuable with a bit of setup cash and some hard work. But is it really as it simple as it seems? There are so many renovation horror stories – so many more than there are success stories – so don’t take a reality TV renovation as just what you see in the show, make sure you have all the facts on what costs you’ll have up front, so your renovation dream won’t turn into a renovation nightmare that will costs you tens of thousands of dollars for nothing.

Time

Time is money, and labourers and contractors are very expensive. Just because you saw a room get renovated in a week on TV, doesn’t mean that’s possible in the real world. TV shows get edited to make it look like it’s a week. Even then, contractors and contestants are often working around the clock to make sure they meet the deadline. Sometimes you see 5 people, but on the other side of the camera, 30 people are doing the work. In reality, plumbers, electricians and builders are all day labourers, and they have other clients, too. Emergencies crop up. Make sure that having a room out of circulation for a few months won’t cause a financial strain on your renovations – have realistic time constraints.

Rates

Contractor rates on television don’t always work out to the rate to us non-TV folk have to pay. Whether it’s the network negotiating the rate, or the contractors giving a discounted rate to get some free publicity on TV, make sure you get their rates before you start assuming the cost you saw on TV is the cost you’ll actually have to pay. The TV producers are notorious for bargaining down their rates by even 50% to make the show more entertaining – making you think you can get more for less.

Selling

Selling the house on some of these shows can appear to be a cakewalk. In reality, it can be nothing like that. With the crazy Australian property market, there are no guarantees. If you’re looking to flip your house after a quick-fire renovation, you may get a rude surprise. If you’re banking on paying off your mortgage with the house re-sale, you might get hammered on mortgage fees while you’re sitting waiting for someone to actually buy the house. Give yourself a buffer so the profit you make from the sale isn’t negated by the mortgage fees you’re having to pay until it gets sold, or else your hard work will be for nothing.

At the end of the day, remember, its television. Even if it’s reality television, what you see is not what you get in real life. Use it to get ideas, but do your own independent research to make sure that you’re within your budget for expenditure and time before you commit to a renovation you can’t afford.

The costs beyond the car

Posted on May 5, 2015

When looking to buy a new (or used car), the final figure you’ll end up paying will be a lot more than just the car itself. We’ll breakdown what costs you’ll have to pay during the buying of the car, and once it’s yours so you can actually legally drive it.

Dealer costs

When buying from a dealer, carsales has calculated the average used car sale will incur $300-400 in dealer’s fees, such as stamp duty and dealer delivery. These can be negotiable, and dealers will take you to the cleaners if you don’t bargain it down.

Safety Check

Before you get your car, you’ll need to pay for a safety check. Ignore this at your own peril. Getting it checked for $100 before you buy can save you thousands if you buy a car with existing issues.

Vehicle History

Getting a full car history report with RevsCheck can cost as little as $30, but, again, can save you a world of hassle. If a car has been written off, it should be scratched off your potential car list. All you need is the car’s VIN number and you’re good to go.

Registration

Once you’ve paid for your car, you’ll need to register your vehicle to be eligible to drive. Registration can cost between $300 and $2000, depending on the size of your car and your intended use. A hatchback or sedan for personal use should cost no more than $500.

Insurance

There are two types of insurance you need to be ready to drive; third party insurance (commonly known as a greenslip) and comprehensive insurance. The average price for a greenslip is $500. Comprehensive insurance is usually more expensive for drivers under 25.

Pink slip

When you’re registering your car, you’ll need to prove it’s roadworthy. Take it to the mechanic to get a registration check. If the car passes, you’ll get a pinkslip. You can’t register your car unless it’s been logged into the system as passing a registration check. The average cost for a pink slip check is around $35-40. Your car might need a few extra items to pass the check, such as a new headlight or brake light, which might cost you between $5-20 each.

Service

While not required once you get the car, you should research how much a regular service will cost for your car. European cars might require a specialist mechanic which will be costlier. Parts are harder to source (and more expensive), too.

Petrol

Another cost you won’t need to consider when you’re buying it, but research what petrol your new car will take, and what its fuel efficiency is. If you’re driving around 100km per week, and petrol averages out at $1.50 per litre, choosing a car with 8L/100km vs 10L/100km can save you around $200 per year.