- Which car is best for me?
- New cars vs used Cars
- Where do you get it?
- Dealers
- Private sales
- Car markets
- Auctions
- Warranties
- Buyer beware!
- Where to check the title
- Your local motoring associations
- Car insurance tips
- Tips on buying a car
- Protect your car and your wallet
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For most of us, a car is our first major purchase. It can be an exciting process but remember, it's an important decision-and shouldn't be made on impulse. Doing your homework now to find the right car for your money could save you making costly mistakes you'll pay for later.
Tip
If you're taking out a loan to buy a car it's better to arrange your credit first. Many people look for the car first and think about the credit second, setting their hearts on a car they can't afford. See how much you can borrow first.
Which car is best for me?
It's important to work out what you want from your car. Be logical here-how many people are you likely to carry? Where will you park the car overnight? How many kilometres will you travel? Is fuel economy important? Can you afford to maintain the car? How much money do you have? Are you looking at a new car, or a used car?
New Cars vs Used Cars
| New cars | Used cars |
|---|---|
|
new technology higher purchase price higher depreciation more choice warranties which last up to 3 years generally safe |
old technology lower purchase price lower depreciation less choice shorter or no warranties less safe, more polluting |
Used car price guide
|
1986 - 87 1990 - 93 1988 - 94 1992 - 96 1989 - 94 1991 - 93 1994 - 97 1993 - 97 1996 - 98 |
Toyota Corolla Mazda 121 Suzuki Vitara Mitsubishi Lancer Mazda 323 Holden VP Commodore Mitsubishi Magna Nissan Bluebird Ford EL Falcon |
$4 400 - $5 000 $7 000 - $10 000 $7 500 - $13 000 $8 500 - $12 500 $10 800 - $17 500 $10 500 - $15 500 $14 500 - $18 000 $15 500 - $28 000 $18 800 - $23 000 |
Where do you get it?
If you're in the market for a new car, you need to go to a dealer. If it's a used car you're after, you can go to dealers, private sales, car markets and auctions: Here's how they stack up:
Dealers
You pay more, but you may get more: warranties, trade-ins and well-presented cars.
How to deal with dealers
- Buying a car is about feeling good. If you're feeling pressured, or it all seems too good to be true, tell the salesman you'll sleep on it.
- Insist on your rights-don't let yourself get pushed around. Bring someone along who knows more about cars than you do.
- Take a test-drive, or take the risk-the choice is yours. Take someone who knows more about cars than you do and take your time.
- Shop around. If you were moving out, you'd go to more than one estate agent. When you buy a car, it makes sense to go to more than one car dealer. If the dealer up the road is cheaper than the one you're at now, or the car has defects, tell the dealer.
- Don't be talked up-if you go in to buy the basic model, come out with the basic model. Don't get talked into the next model up, or a host of unwanted extras.
- Some dealers might tell you there's another buyer, and to leave a deposit to hold the car. Don't fall for it: the other buyer might not exist, while you commit yourself to a car you don't really want.
Private sales
Buying from the paper, a friend, or a sign in the car window is usually cheaper, but not necessarily better.
- The seller might not even own the car
- you can't trade-in your old car
- no warranties
- no on-the-spot finance
- no proof of title
Car markets
Car markets are like big open-air car supermarkets. There are plenty of cars to choose from, and it's easier to bargain: sellers don't like going home empty-handed. But again, no trade-ins, no warranties, no finance, and no proof of title.
Auctions
Great if you know your values and like making decisions on the spot, not so great if you don't. There are no test drives (although you can turn on the engine) no full mechanical inspections and no second chances. Beware: auctions are risky business for the inexperienced!
Warranties
State laws vary but generally used cars from dealers carry limited warranties, while all new cars have warranties of at least 12 months, and often 24 or 36 months. Warranties cover less than you think, especially on used cars. You're on your own for wear and tear items like tyres, brake pads and batteries. For more information, have a chat with your dealer or contact your local motoring association.
Tips- Check the title. See below-there are no prizes for getting landed with someone else's debt-or a stolen car.
- Go to a mechanic or your local motoring organisation. It might cost you a few dollars, but mechanical repairs can cost substantially more, especially on older cars.
- How many kilometres has the car done? Most cars do around 16,000 kilometres a year. If the kilometres are above average, try to get the car for a lower cost. Cars with high kilometres can be more expensive to run and more difficult to resell.
- Ask the seller how long he or she has owned the car. If they haven't owned it for long, ask why they're selling so soon.
- Check the service records-well looked after cars are better.
- Check the registration-if it's about to run out, deduct it from the price.
Why car prices vary:
- age
- kilometres travelled
- manual or automatic transmission. Automatics can be more expensive but may be easier to sell.
- colour (some colours are more popular)
- options (cars with sunroofs, alloy wheels and air-conditioning cost more)
- trim level (is this the base model, or top of the line?)
Buyer beware
- On road costs and dealer delivery charges-cheap new cars can turn into not so cheap new cars. At the time of writing, the list price for one popular small car was $16,970. After adding dealer delivery fees, stamp duty, registration and compulsory third party insurance, the on-road price came to $19,066.85-a difference of $2096.85!
- "Old" new cars. Check the date of manufacture on the compliance plate-a silver plate under the bonnet about the size of a matchbox. Your new car may not be as new as you thought.
- Dealer demonstrators: you might save a packet.
- Models that appear to be always heavily discounted. Ask yourself why-today's discount can be tomorrow's depreciation.
Where to check the title out
NSW (REVS): 02 9600 0022
VIC (VEHICLE SECURITY REGISTER): 03 9348 1222
QLD (VIA CONSUMER AFFAIRS): 07 3246 1599
SA (VEHICLE SECURITY REGISTER): 08 8232 0800
WA (REVS): 09 222 0711
TAS (TRANSPORT DEPT): 03 6233 8011
ACT (REVS): 1800 424 988
NT (REVS): 1800 424 988
Motoring Associations
These government backed, non-profit organisations are dedicated to helping motorists. They offer legal advice, roadside service, maps, information, vehicle inspections and many other services.
ACT - NRMA (Phone 132 132)
NSW - NRMA (Phone 132 132)
Northern Territory - AANT (Phone 08 8981 3837)
Queensland - RACQ (Phone 131 111 or 07 3340 1122)
South Australia - RAA (Phone 8202 4500)
Tasmania - RACT (Phone 131 111 or 03 6232 6300
Victoria - RACV (Phone 131 111)
Western Australia - RACWA (Phone 1800 198 065 or 08 9421 4444)
Car insurance tips
No matter how experienced a driver you are, it is essential that you carry the appropriate insurance for your vehicle.
In all states except NSW, vehicle registration includes compulsory third party insurance cover which protects the driver of the registered vehicle against claims arising from death or injury to another person caused by the drivers negligence.
In NSW the Roads and Traffic Authority issue a green slip with the registration papers and drivers arrange their own CTP insurance.
The following list identifies the most common types of car insurance:
- Comprehensive insurance
- Agreed value vs. market value
- Third Party Fire and Theft
- Third Party Property Damage
- Uninsured Motorists' Extension
What to consider when deciding on an insurance policy:
- What items are covered and what isn't?
- Will the policy replace items with new goods or will it simply pay the depreciated value?
- Do I pay excess on a claim - and if so, how much?
- Does the company have a good reputation
- Does the company have a good claims payment history?
- Do I understand everything on the policy?
- Does the company offer a cheaper policy by nominating who will drive the vehicle.
- Does your insurance company offer for reductions in premiums for certain types of alarms, immobilisers
What car insurance doesn't cover:
- Depreciation
- Wear and tear
- Rust and corrosion
- Structural or mechanical breakdown
- Cars used for racing
- Damage occurring when the driver was convicted of driving under the influence of alcohol or drugs
- Theft when the car was not secured adequately
What is considered when vehicle insurance premiums are calculated:
- Age
- Record of any previous claims
- Driving record
- Type and age of vehicle
- Vehicle modifications
- Where and how the vehicle will be parked
- Incidence of thefts in your area
Tips for protecting your car
- Keep your car locked and valuables out of site
- Don't modify your car with performance enhancing additions such as wider tyres and other non-factory equipment
- Install an immobiliser
- Install an alarm system and display the warning stickers prominently
- Use a reliable 'club' lock
- Park in safe, well lit areas or in a garage or carport,
- Install a stereo with a detachable face or that is security coded
Credit unions offer a comprehensive range of financial services. For more information contact your credit union.
Tips on buying a car
Finding the right car to suit you and your financial needs takes a bit of research and planning.
Where to buy a car
- Privately
- Used car dealers
- Auctions
- Car brokers
Ways to purchase a car
- with savings
- personal loan
- borrowing money from the seller
- private leasing
Costs to consider:
- Purchase cost
- Dealer preparation charge (new cars only)
- Registration transfer fee
- Stamp duty
- Government Charges
- Insurance
- Fringe benefit tax (if applicable)
Smart tips
- Dont be pressured into buying
- Identify what / need you want before you go out shopping
- Don't let your heart rule your head - buy within your abilities
- Road test the car - make sure you are happy with it
Checklist
- Have I shopped around and considered all of my alternatives?
- Do I feel comfortable and secure driving it?
- Does it have the features I most want and need?
- Is it safe?
- Can I afford to run and maintain it?
- Is the mechanical condition acceptable?
- Is the body condition acceptable?
- Is the interior condition acceptable?
- Is the car reliable?
- Has REVS checked that there are no encumbrances
- Has the correct age been verified?
- Is it the exact model it's claimed to be?
- Am I paying correct market price?
- Will it hold its value?
- Will I be happy owning and driving it?
Credit unions offer a comprehensive range of financial services. For more information contact your credit union.
Protecting your car and your wallet.
Routine car maintenance and careful driving will help you avoid costly breakdowns and repairs, retain the value of your car and keep dollars in your pocket. Most importantly, these precautions will keep you and your passengers safe.
Easy Maintenance Tips:
- Schedule regular tune-ups for the car and maintain a logbook - if you decide to sell your car, the book will demonstrate that the car is well maintained
- Check and change the oil and oil filter regularly, (commonly engine oil should be changed every 10000 km - check the owner's manual).
- Check the tire pressure regularly - this will reduce wear and tear and petrol consumption
- Check the coolant, and oil levels and look for coolant and oil leaks
- Remove leaves that have fallen into the engine - this will reduce the chances of the engine overheating
- Have you checked your brakes recently? Do the brake pads need to be replaced? (you should also check the brake fluid in your car)
- Listen for strange noises, sensing a difference in the way your vehicle handles, or even noticing unusual odours could indicate a problem
- Wash your car thoroughly. Dirty paint will break down more quickly than clean paint.
- Repaint scratches before they begin to rust
- Consider waxing your car regularly - this will retain the car's shine and keep the car looking new
- Dirt on carpet and upholstery will create friction and hasten wear
Remember to drive carefully. Unnecessary speeding and braking will increase the wear and tear of your car, depreciate the value of your car more quickly and could endanger your passengers. Regular care and attention will increase safety, help you to save money and, best of all, add to the enjoyment of owning a car.
