Buying a new or second-hand car can be very exciting. Whether this is your first car, or you have purchased many cars before, there are some things you need to keep in mind before making your final purchase.
Before you even start looking around for a car, you need to set a firm price range. When budgeting for your car, keep in mind all the extra expenses that go along with owning a car, including insurance, annual registration, fuel, and car repairs. Car registration is about $25 per year and car insurance, which includes both Compulsory Third Party (CTP) coverage and Comprehensive Car Insurance coverage, can cost around $2,000 per year. Always maintain your insurance coverage on your vehicle in case of an accident.
Keep in mind that you will also need to pay a Stamp Duty and a transfer of registration fee when you purchase the car. The amount the Stamp Duty is based on the price of the car and the state or territory where you live. You will also be required to get your car inspected right after you make your purchase, which could cost a lot depending on the condition of the car you purchase.
Once you take into account all of these added expenses, you should be able to determine a set price range that you have available to purchase a car. You should have this amount available or have already received approval for a car loan before you start shopping for a car. You may be able to get a car loan at a dealership, but it will cost more money. You will also have more leverage for bargaining if you have the funds available before you go shopping.
Finding the Right Car
Finding a car that is right for you may take some time, so be prepared to shop around. You do not want to rush into this decision because you will likely need to keep the car for at least several years. Below are several options to consider when shopping for a car. This may help narrow down your selection.
- Functionality vs. Looks. You may be tempted to search for a car based on how it looks, but it is better to look at the functionality of the car. Make sure that it includes all the things you need in a car.
- Automatic vs. Manual. If you are not licensed to drive a manual car, you will only be able to shop around for automatics. Manual cars are usually slightly cheaper than automatics and are less expensive to repair.
- Large vs. Small. Do you want a large or a small car? When making this decision, keep in mind that smaller cars are less expensive to operate, have lower registration fees, and cost less to replace parts like tyres.
- New vs. Second-hand. Your budget will probably let you know if you can afford to purchase a new car, or if you should only shop around for second-hand cars. If looking for a second-hand car, search for one that runs great and has low miles.
There are also several things you should keep in mind as you go from car yard to car yard looking for the right car.
- Stay Firm on Your Price. Be sure to have a price range in place before you go shopping for a car. Know what the maximum price is that you can pay for a car and stick to that price. If you go over your price range, you may find out later that you cannot afford to maintain your car.
- Do Your Research. Before making any final decision about a car, you want to spend some time shopping around. See what different cars are available in your price range and then do some online research about the capabilities of the cars. Once you know the type of car you want, shop around for the best deal.
- Bargain for a Better Price. Car yards are used to bargaining with people for better deals, so do not hesitate to make a lower offer. Be leery of any salesperson claiming that someone else was just looking to buy the car or that it is the cheapest price around. These are common tactics used to make a sale.
Where to Look
There are several places you can look to find a new and/or second-hand car to purchase.
- Private Sale. A private sale is one that involves purchasing a car directly from its current owner. You will not receive a warranty with this type of car, but they should let you take it out for a test drive. It is recommended that you ask to see all the vital paperwork when purchasing a car through a private sale. This includes the proof of ownership, current registration papers, and a pink slip (or safety check report) completed within the last 28 days. You also need to verify ownership of the vehicle. If the current owner of the car still owes money on it, the car could be repossessed even after you purchase it.
- Car Auction. The car auction is the least expensive way to purchase a car. However, you will not receive a warranty or be able to take a test drive of the car before making a purchase. Keep in mind that you will need to get your car inspected after you purchase it, and depending on the condition of the car, this could cost a lot of money. You also should learn what the auction rules are for payment before bidding on a car. Just as with the private sale, you risk having the car repossessed if the current owner has not paid for the car in full.
- Dealership.Cars purchased at a dealership are slightly more expensive, but do come with a guarantee that your car will not be taken away. In addition, if the car is less than ten years old, the government requires the dealership to provide a warranty with the car. If the dealer asks you to make a holding deposit to ensure that the car is not sold to another person while you decide if you want it or not, be sure to get a receipt. Keep in mind that the dealership may keep some, or all, of your deposit if you decide not to purchase the car.
Before Making Your Final Decision
Here are some extra step you should take before making your final decision about purchasing a car.
- Inspection. It is going to cost you some extra money, but it may pay to have the car inspected before you make the purchase, especially if you are going through a private sale. This will alert you to any major problems with the car.
- Get a Second Opinion. Take someone who knows about cars along with you when you shop around. He/she will be able to help you determine which cars are good.
- Ownership Check. Checking the ownership of the car is extremely important if you are going through a private sale or an auction sale. Go to the Personal Properties Securities Register website to validate the ownership of any car before purchasing it.
- Check Odometer. Also, check to make sure that the odometer has not been tampered with and that the reading on the odometer is correct.