Buying your first car can be difficult, especially when you are torn between what you should be buying and what you want to buy. To be practical and get what would be considered the right car for you the first time around, you need to consider many things. What will it cost to buy and run a car? Do you need a loan? What type of insurance do you need? We attempt to answer some of the important questions for you to help get you on the road in a car that is going to provide you with a good motoring experience.
Working in vehicle dealerships before coming to National Fleet Finance, most of our vehicle consultants have dealt with the parent who is buying the vehicle or helping to buy the vehicle for their child. Often the first comment is “We just want something cheap that there is no issue if they have an accident.”
This statement never failed to turn my stomach and I usually made it my mission to then make sure they bought from me so their child would at least be driving something safe and not a cheap death trap.
So here are some tips:
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 travelled 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.
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.
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 (there are commercial exceptions). 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:
Some contracts cannot be cancelled 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.
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 with these, you must be very careful.
Reputable finance brokers or new car dealer finance managers are recommended above others and be especially careful of the online broker and what they offer unless they are a recognised brand.
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.
