With car imports at some of their most affordable prices in years you might be considering upgrading to a shiny new auto.

Here are a few things to consider so you don’t wind up regretting your purchase long after the new car smell has faded.

Hidden costs

Don’t forget you’ll be forking out for more than the car’s price tag. Fees and charges, such as transfer registration and stamp duty, vary from state to state.

Then there’s petrol, maintenance, insurance and registration.

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Cash is king

As that car salesperson is waxing lyrical, it pays to remember that an expensive car – particularly a new one – starts depreciating in value as soon as you get the keys.

So paying cash, and avoiding any interest, makes the most sense if you have the means, says NAB financial planner Sharon Walker.

Comparison rates

As is the case with home loans, Ms Walker says if you want to compare apples with apples, you should be looking at the comparison rates of each car loan. They factor in the real costs of the loan, including interest payments, fees, the term and the repayment frequency.

Leases

“A lot of people will actually have the ability to lease a car, and salary package that through a lease arrangement,” says Ms Walker.

That may mean you can make pre-tax payments on the lease that also include registration and insurance, with the possible option of buying the car outright at the end.

Ms Walker recommends doing the sums to work out how it would suit your individual circumstances.

Take care with showroom finance deals.

Redrawing on your home loan

This can be one of the most sensible options – but only if you increase the repayments on your home loan, says Ms Walker. Otherwise you’re just extending the length of that loan and may inadvertently end up paying more for your car than you would through other avenues, as the interest compounds over many years.

Miles Larbey, senior executive leader in financial literacy for ASIC, says if you have a variable rate home loan, remember to factor in the possibly of interest rate rises.

Personal loans

While home loan interest rates are usually lower than personal loans, personal loans have one advantage in that they’re usually fixed for the period, says Mr Larbey.

But you need to be aware of how much you’re really going to be paying (try MoneySmart’s free calculator).

“Let’s say, for example, that you borrowed $20,000 at an interest rate of 6.8 per cent over a five year term,” he says. “You would end up paying $24,248 over the five year period.

“If you don’t manage to pay off the full amount of the loan by the end of the loan term, you would need to either pay it off with a lump sum or refinance.”

Car yard finance

Mr Larbey says it’s easy to get caught up in the excitement of buying a new car.

“All too often car buyers agree to added extras offered by the dealer finance department without really thinking about what they will end up costing them, whether they really need them and what they are actually getting for their money,” he says.

Mr Larbey says buyers should be wary of add-on insurance products. Quick decisions on insurance coverage can prove to be expensive, but of limited benefit if you do need to make a claim.

For instance loan protection insurance covers your car loan payments if you can’t work. But Mr Larbey says it might make more financial sense to consider life or disability insurance.

Another thing be wary of is gap cover, also known as shortfall insurance, which promises to pay off your loan if your car is written off. However it’s also pricey – so an agreed value comprehensive insurance policy may be a better bet.

Likewise, when it comes to extended warranties, read the fine print very carefully, particularly when it comes to exclusions.