Promising to "support Australians with the financial decisions associated with buying a car", ASIC's MoneySmart Cars app is "a free education tool" designed to help "put you in the driver's seat" – seemingy quite literally!
The app will "help people understand the real costs of buying and running a car", by assisting "consumers with their research to make informed choices".
ASIC claims its new app ‘gives impartial guidance on:
- The real cost of buying a car, including interest, extras and ongoing costs;
- Avoiding common car buying traps, such as being sold extras you don't need or want;
- Finding alternate ways to finance a car and; and
- Making informed financial decisions prior to purchase.
Peter Kell, ASIC deputy chairman, said: “With the average car debt per household at about $19,500, buying a car, particularly for young drivers, is an exciting but expensive financial commitment."
[The $19,500 figure is from ASIC Report 47 – Buying add-on insurance in car yards: Why it can be hard to say no, 26 February 2016.]
Kell continued: “Our research found that while price is a key consideration, other costs such as loan interest, insurance, servicing and fuel are generally not considered.
“Knowing how much owning a car will cost you, including the cost of interest and add-ons you might not think about, will help you make informed decisions about how much you can afford and ensure you get value for money.”
For example, ASIC says that using its MoneySmart Cars app "reveals that purchasing a $15,000 used car on finance, will cost $817 per month, and a total of over $50,000 over five years, with interest and running costs taken into account".
“We also know that many consumers fall prey to poor financial decisions, when in a car yard for example, because they may be solely focussed on the car or overwhelmed by information overload. ASIC's new app is a practical tool that puts you in the driver's seat,” Kell added.
The app is designed to "support and complement ASIC's ongoing regulatory work on consumer protection issues by alerting consumers to the risks of add-on insurance products and other hidden costs".
For example, a recent ASIC report [ASIC Report 471 The sale of life insurance through car dealers: Taking consumers for a ride, 29 February 2016] found that "consumers can pay up to 18 times more for life insurance purchased through a car dealer, compared to insurance available elsewhere, and there was a low level of awareness of add-on insurance products".
ASIC's promotion of the app will be supported by a series of videos for use on social media, featuring V8 SuperCar driver Craig Lowndes who introduces some key features.
Unfortunately for the otherwise extremely talented Lowndes, he suffered a car crash of a make-up job for the video, with his face shining a dull sort-of golden-ish colour, glistening with layers of shiny make-up.
Whoever did his make-up should be forced to create an ASIC MakeupSmart app so that celebrities can avoid having dodgy make-up jobs applied to their faces – there’s definitely something to be said for the natural look, or a much lighter make-up job.
Having been on TV myself more than a few times over the past 20 years, I know a bit about the make-up application process, and I guess if you look at the video below, you may well just see what I mean.
However, Lowndes wasn’t in town to talk make-up, but buying cars, and he said that: “Buying a car is a big financial commitment and it's easy to be overwhelmed by the choices on offer.
“Having a resource at your fingertips can help you make the right decision. Whether it's a sedan, a hatch or an SUV you're interested in, before you shop around consult ASIC's MoneySmart Cars app.
“It's the perfect tool to assist with your research so the car you buy meets your need”, Lowndes concluded.
To see what I mean about Lowndes’ face, take a look immediately below (the article continues thereafter, please read on).
To see ASIC's financial tips on car loans and car insurance visit ASIC's MoneySmart website.
The original media release from ASIC is here with some additional graphics and links to previous ASIC reports on buying cars.