ASIC's MoneySmart Cars app is a free education tool to help people understand the real costs of buying and running a car.  It will assist consumers with their research to make informed choices.

The 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;
• Making informed financial decisions prior to purchase.

'With the average car debt per household at about $19,500[1], buying a car, particularly for young drivers, is an exciting but expensive financial commitment.  Our research found that while price is a key consideration, other costs such as loan interest, insurance, servicing and fuel are generally not considered', said Mr Peter Kell, ASIC Deputy Chairman.

'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', said Mr Kell. 

For example, using ASIC's 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 5 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', Mr Kell said.

The app will 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[2] 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 MoneySmart Cars app is available now on the App Store and Google Play.  The app will be promoted online and shared with external stakeholders in the car industry. 

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.

'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', said Craig Lowndes.