Think about what you’ll be using the car for before you go shopping. Ask yourself the following questions:
What size: 4, 6 or 8 cylinder?
If you’re planning on city driving and parking then a small car that is economical on fuel would be the most suitable. On the other hand, if you intend doing a lot of cruising on the open road then a large car may be better.
What size: small (1-1.6 litre), medium (2-3 litre) or large (3.8 litre and over).
Will you be carrying anything other than people?
Roof racks or a large boot may be enough to handle your needs or you may want to think about a station wagon or ute.
Do you need special features?
You may need a car with air conditioning for those hot days and/or cold mornings.
Auto or manual?
Which type of transmission do you prefer, a manual or an automatic?
Get your finance sorted first
If you decide to borrow to buy a car, check out the interest rates charged by different banks, credit unions, finance companies and other lenders. Most car dealers will offer to arrange finance for you, but you’ll probably do better elsewhere.
Get an idea of price
Once you know the type of car that you want to buy, get an idea of the price range to expect. Check the papers and different car dealers. This will put you in a better position to bargain.
Set a maximum price and don’t go above it
Remember to bargain: you may be able to save hundreds of dollars.
Budget for all the costs
Don’t forget to budget for inspection, insurance, registration, transfer and stamp duty costs.
Check when the registration runs out
If the car’s registration is due within a month or so, add the cost of renewing it to the overall cost of the car or you may want to use the early registration expiry to haggle over the car’s price.
Don’t forget to get the car inspected before you buy it
A professional inspection, especially for used cars, can alert you to hidden problems that may be costly to fix. You can then decide if you still want the car, or leave it and look around for another.
Don’t sign anything
Unless you are absolutely sure that you want to buy a car, don’t sign anything. If you are asked to sign something it will most probably be a sales contract. If you are just looking or thinking about buying a car there is no paperwork involved at all.
Buying a used car from a licenced motor vehicle dealer is often more expensive than buying privately, but it offers the greatest protection. Licensed motor vehicle dealers are regulated by the law and must give certain guarantees that do not apply to private sellers.
One of these guarantees is clear title. This means that ownership of the car will be passed onto you in the sale and the car cannot be taken from you (repossessed) because of someone else’s debt.
Licensed motor vehicle dealers must also provide a statutory warranty for cars that are less than ten years old and have not travelled more than 160,000 km. If the car is sold without a statutory warranty (it’s more than ten years old or it has travelled more than 160,000 km) then it’s possible to buy an extended warranty from the car dealer. However, these warranties are often quite limited in the cover they provide and the conditions should be read carefully before purchase.
If you choose to buy privately you won’t get any warranty and you will need to check for clear title yourself. You can do this by contacting the Personal Property Securities Register (PPSR) Ph: 1300 007 777
Buying from a licenced dealer
Buying though licenced motor vehicle dealers may be more expensive than from a private seller, but offers you greater protection.
If your car is not more than ten years of age and has travelled less
than 160,000kms, it will be covered by a three-month/5,000kms
You’ll have a clear title which protects you against repossession if anyone owes money on the car and ensures it is not a stolen vehicle.
You don’t have to use the car dealer’s finance or insurance.
Before you talk to the dealer, check out the interest rates offered by lenders and the insurance premiums offered by different insurance companies. You could save money by shopping around and organising these things yourself.
If you are buying a car that has some problem not covered by the warranty, negotiate with the dealer to have it fixed. If the dealer agrees, then have it written in the sales contract and have them make the repairs before you take the car away.
Check all the paperwork and read any contract carefully before you sign it. Remember: you don’t need to sign anything unless you have decided to buy a car.
Tricks of the trade
People who sell cars will use all sorts of tricks to try and get you to buy now: once you leave the car yard their chances of making the sale plummet.
So be prepared. Shop around to get an idea of prices. Know what sort of car you are looking for and ask questions of the salesperson to help you in making a decision. Get advice and have a thorough mechanical and body check done before you make a decision. Put some space between the test drive and the negotiations. This is the time that you are most likely to make a concession, especially if you like the car. The salesperson knows this and will use it to their advantage.
Sales lines that should put you on guard
- This car won’t be here tomorrow;
- I’ll have to see if my manager will approve this offer;
- We have a buyer for your trade-in.
Remember, just as your most vulnerable moment is just after the test drive, the salesperson’s is when you decide to pass on the deal.
Be wary of high trade-in offers. The price of your new car may be increased to cover the difference. Before you hand over your old car, be sure to agree on a specific delivery date for the new one and make sure you can afford the changeover cost.
Make sure the car is clean;
To maximise the amount of your trade-in, you may want to replace or repair worn items that are visible to an appraiser such as a cracked windshield or bald tyres.