Here is some Advice on Buying a Car

So you are going to buy your first car!

What will it cost to buy and run a car? Do you need a loan? What type of insurance do you need? We answer these questions and more to help get you on the road.

If you need more help after you read this information just give us a call and talk to one of our young consultants who will understand you and help you with the whole process.

 

Firstly let’s start with where you might buy your first car:

Auctions

Buying a car at an auction can be cheaper but there's no warranty, no test drives, and no inspections. Make sure you check the paperwork and research any debts and warnings on pre-owned cars you see at auction. You can do this by checking the Personal Property Securities Register (PPSR)- a national service allowing you to check a private vehicle before you buy.

Buying from a car dealer 

Cars sold by licensed dealers can be more expensive than buying privately but dealers guarantee the car won't be taken away from you because someone else owes money on it.

Dealers also have to give a warranty on cars under 10 years old that have traveled less than 160,000km.

Consumer affairs and fair trading government agencies regulate how cars can be sold through car dealers. Visit your state's agency to get more information on buying from a car dealer.

With the affordability of new cars these days in the smaller ranges, it is quite a good idea not to block out the idea of a new car and have a look. That way you get the latest in safety features.

Small cars these days can be purchased for as little as $50 per week.

Extra insurance offered by car dealers

If you are arranging finance for your car you may also be offered add-on insurance products from a car dealer like loan protection, gap cover or tyre and rim insurance. Think twice before you take up these offers as they may not be good value for money and only pay in limited circumstances. They are not all bad but do your research, ask questions and don’t sign up for them on the day.

Private sales

Private sales can deliver a bargain. However, test-driving and mechanical inspections are a must.  Be sure to ask if the car has been in a crash.  Always go to the seller's home address. Don't arrange to meet them somewhere. Check that the home address is the same as the one on the registration certificate.

Take a test drive

The best way to assess a car, particularly a used car, is by taking a test drive. Whatever you do, always set aside enough time to do this.  Always look at cars during the daytime, as darkness may hide all kinds of problems.

Consider taking a friend with you when you do a test drive. Those extra eyes, ears and hands will come in handy and it will help if they know something about cars.

If it's a rainy day don't go looking for cars.  The rain hides previous paintwork, nicks, and scratches, and makes thin, worn paint look slick and shiny.

Get a qualified mechanic

If you don't feel confident about doing your own inspection, bring along a qualified car mechanic. The cost of this will be worth it when you get a car in good working condition. All state and territory automobile clubs offer a comprehensive mechanical inspection service.

Safe cars save you money

Smart tip

Visit the 'How safe is your car' website to check the car's crash rating before you buy.

Buying a car with advanced safety features such as anti-lock brakes, air bags, electronic stability control and high crash protection ratings will decrease the chances of serious injury and death in the event of a crash, reduce the cost of your car insurance and may also boost your vehicle's resale value.

If you want to know what safety features to look for in your first car, go to: Australian New Car Assessment Program (ANCAP) and Used Car Safety Rating Program (UCSRP).

Check the warranty

The purpose of a warranty is to save you major expenses when your car breaks down.

Manufacturer's warranties on new cars

A manufacturer's warranty applies to all new cars and goes with the car even if it changes owners within the warranty period.  A full manufacturer's warranty provides all service necessary and is free of charge to the owner. If something is wrong mechanically with the car it will be fixed free of charge.

Used car warranties

Used car warranties vary from car to car.  Low-mileage late-model used cars may have some of the original manufacturer's warranty remaining, which is then transferred to the new car owner.

Extended warranties

Watch out for extended warranties offered by some dealers. We suggest you only purchase valid extended manufacturer warranties and keep in mind most of those can be purchased at any time prior to the new car warranty period expiring.

See the ACCC's warranties webpage and NSW Fair Trading's extended warranties webpage for more information.

Read the contract carefully

A sale contract is a legally binding agreement between the seller (dealership) and buyer (you). Before signing a contract you should:

• Read it carefully, including the fine print
• Don't be pressured into signing it on the spot (If you need more time to read it then take it home to read through.)
• Get help to understand the contract
• Never sign a contract that contains blank spaces
• Make sure that all parties initial any changes that are made to the contract you sign
• Always get a copy of any contract you sign

Some contracts cannot be canceled because you change your mind. For more information on cooling off periods when you can change your mind on car contracts, see your state's fair trading or consumer affairs website.

Car Finance

There are many ways to finance a car but it can be a bit of a minefield and you do need professional advice so that the finance and repayments fit your circumstances.

The most common for first-time buyers is the consumer finance offered at the car dealer but even these you must be very careful.

Reputable finance brokers or new car dealer finance managers are recommended above others especially be careful of the online (computer) broker.

Salary packaging is a very good finance product for full time employed young people as it manages your overall budget and allows you to pay for some with pre-tax dollars. Salary Packaging is also offered only by large reputable lenders and organisations but you still need to compare on your repayments and not base your decision on interest rates which can be fiddled with.

A big plus for the young with salary packaging is the no deposit requirement set down by the ATO and the lenders lower qualification criteria since an employer is making the lease payments for the young buyer.