5 tips for buying a car

Whether you’re schmoozing a salesperson on the showroom floor, or haggling a private seller for an old runabout, buying a car is an exciting time.

But it can also be a financial minefield, and if you’re not careful it’s easy to end up hundreds – or even thousands – of dollars out of pocket.

So if you’re in the market for a new set of wheels, here are our tips on how to navigate the traps and get out on the road (with change to fill up the tank).

Understand your needs

The first step is to work out what you need from a car and a firm budget, including on road costs. Most State motoring organisations have done the research on the real running costs of different makes and models so go to their website and plug their figures into your budget.

Then, start to research different makes and models until you have a good feel for how much vehicles you’re interested in cost, features to look for and good models or years to buy.

Hot tip: If you’re buying second hand, aim for the newest car with the lowest km possible for your budget; you’ll hopefully save on servicing down the track.

Be prepared

Before inspecting a vehicle, put together a list of questions to ask the seller.

Buying new? Make sure you ask about fuel economy, fixed price servicing and dealer warranties.

Buying second hand? Always check the car’s service log, ownership history and whether it’s been in a crash. Also, ask why the current owner is selling the car, registration details and whether they actually own the car.

Hot tip: Don’t just take the seller’s word for it; check the car’s registration details with your state transport authority. Cross check the engine number against the car’s paperwork, and ask for a recent road-worthy certificate.

Be a smart buyer

If you’re buying a car from a dealer (new or second hand), delaying your purchase to the end of the month, end of financial year or end of calendar year can lead to serious savings.

Salespeople are more likely to discount at these times as they need to hit their targets or clear old stock to make way for new models and earn their monthly bonus.

And no matter who you’re buying from, never be afraid to negotiate; the headline price is for mugs. Make a reasonable offer, keep emotion out of it and walk away if you’re not getting what you want.

Hot tip: Watch out for added extras such as leather trimmings… a few hundred bucks may not seem like much in the context of a car, but quickly adds up.

Get the best loan

If you’re relying on finance to buy your car, it can be tempting to simply go with whatever the dealer is offering.

But before you sign on the dotted line it pays to understand what’s out there; other lenders may be offering a better deal.

Hot tip: Look for loans with low interest rates and shorter terms… even if the monthly repayment seems higher, you’ll ultimately save on interest.

Insurance

The final piece of the puzzle is insurance.

At a bare minimum you’ll need Compulsory Third Party (CTP), and thirty party cover to protect you against damage you cause to other people or other people’s property. If your car is new or valuable, you’ll likely also need comprehensive cover to protect you against damage to your vehicle.

The cost of cover will come down to a number of factors like your age, driving experience, the make and model of your car, where you park it and how you use it.

Hot tip: To keep your premiums down, it’s best to have good security features on the car and park it securely at night. Maintaining a good driving record won’t go astray either. 

As you can see, a lot of effort goes in to getting a good deal on a car. But when you check your bank balance the next day, you’ll be glad you took the trouble.

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