How much should you spend?
This is the most important point to consider. Decide on a maximum price and stick to it. Buying a car involves expenses such as dealer delivery, stamp duty, insurance and registration. Remember to allow for these in your budget. If you're borrowing money it's best to arrange finance beforehand. RACT Finance can assist you in this area with competitive rates and member discounts. The amount you can afford to borrow may determine your budget.
Choosing the right car
Ask yourself what kind of driving you will be doing in the vehicle and whether this may change in the future. Questions like how many people will the vehicle usually carry and whether it will be required to tow a caravan or trailer will help determine the type of vehicle and engine size. Think about how much you can spend each week to run the car. The more cylinders, the higher the registration and usually, the higher the fuel consumption. Also consider that it may be harder or more expensive to obtain parts for a less popular model of car.
The RACT has completed a study of Vehicle Operating Costs which may help with your purchase decision.
RACT joins forces annually with Australia's other motoring organisations to judge Australia's Best Cars, culminating in awarding winners in fifteen categories. Australia's Best Cars are judged on areas important to buyers such as safety, price, running costs, comfort, performance, security and retained value. My Best Car can assist in your new car purchase decision.
Safety is an important factor when purchasing a car. Take time to do some research on safety ratings. New vehicle safety ratings can be checked via the ANCAP website; older cars can be checked How Safe is Your Car.
The Australian Automobile Association publishes a used car safety ratings guide which compares a range of many popular makes and models and even includes some utes, people-movers and 4WDs.
Place of purchase
There are three options available when making your purchase decision; the car yard, a private sale or an auction. These three methods of vehicle purchase have their advantages and disadvantages.
You will generally purchase from a car yard at a higher price, but you do have the opportunity to haggle with the sales person. A car yard also allows you the opportunity to trade in your current vehicle and in most cases will have to offer a warranty.
A private sale will sometimes allow you to purchase a car at somewhere between retail and wholesale price. In general terms a vehicle is offered for sale by the owner because they were offered a low price for it at trade-in. There is no trade-in option with a private sale. Again there will always be room for negotiation buying privately.
Buying at auction will often allow you to purchase at wholesale price. If you are going to purchase at auction, identify the make and model you want, set yourself a limit and stick to it. Pickles Auctions sell ex-Government and fleet owned vehicles either at auction, or you can purchase for a fixed price prior to auction day. Ex Government vehicles sold at Pickles Auctions come with added peace of mind because they have had an RACT evaluation prior to being offered for sale.
Test driving a car
Test driving the vehicle you are interested in buying is crucial. A car may have all the features you're after, but once you drive it you may find that the driving position is too uncomfortable, the ride too harsh or the gear change is not as smooth as you'd like.
Before driving ask the dealer of your legal liability should you be involved in a crash. Once this has been established take the car for a drive for at least 20 minutes along a variety of different roads if possible. Try parking it and perform a U-turn to establish the turning circle. While you're driving, you'll have the opportunity to have a good look at the features.
A warranty is your guarantee that, should any faults become apparent within the warranty period, you won't have to pay to have them repaired. New cars must have a minimum 12 month or 20,000 km warranty (whichever occurs first). Most new cars now come with a much longer warranty and dealers use them as a selling point of the car.
A statutory warranty applies when a car is sold through a licenced Motor Vehicle Trader. Ensure you read the fine print on any extended warranties being offered as an additional purchase. Often they will have a requirement for the vehicle to be serviced at a specific location rather than your normal repairer, have maximum amounts that you can claim for a particular fault and don't cover consequential damage in the event of a part failure.
Trading in your current car can remove the hassle of selling privately, but it will most likely mean you will not get as much money for it. If you do decide to trade in, ask the dealer for the total changeover price. This is how much you'll have to pay to leave your old car there and drive away in the new one. Don't let the dealer confuse you.
Agreeing to the price
It pays to shop around for the best deal. You may be able to negotiate a better price for your chosen vehicle. Ensure you're aware of what the extra costs of buying the car will be including stamp duty, dealer delivery, registration, etc.
It's important to check there is no financial encumbrance on the vehicle prior to purchase. This can be checked on the Personal Property Security Register. This will also give you other information relating to the vehicles history.
Before you take delivery of your new car, make sure that you inspect it thoroughly for any body damage or defects to the vehicle. It's best to take delivery during daylight hours, so that any faults can be picked up easier. Also make sure that the vehicle's year and month of manufacture is as you expected and as stated in the paperwork.