Buying your first car

Spending a large amount of money on your first car cannot be easy. Let us guide you to a guilt-free buy.

Budget

When you buy a car, there is the upfront payment which is the initial deposit then the ongoing expenses which are:

1. finance repayments

2. fuel

3. tax

4. car insurance

5. servicing

6. parking permits and tolls

7. Plus other spending such as repairs and cleaners.

Try to spend a maximum of 25 per cent of your monthly income on your car. So while choosing the right one for you, keep your amount in mind.

Tips for picking a cheaper car:

1. Choose smaller engines

2. Go for petrol instead of diesel

3. Choose manual instead of auto

4. Smaller cars have cheaper insurance

5. Pre-reg cars come with chunky discounts (because dealers are the owners)

New or previously owned

A new car can offer the best ‘peace of mind’. You will also have more options for models, the latest technology, and a fresh functioning and body. On the other hand, people often refer to a used car buy as a ‘personality buy’.

If you are considering a used car, you need to know:

1. How long has the seller owned the car?

2. How many owners has the car had?

3. Why is the car for sale?

4. How many kilometres has the car done?

5. Is a full-service history available for the car?

6. Has it been in a crash?

7. Is it usually stored in a garage?

The best way to do an inspection is with a trusted mechanic (preferably an RACQ approved one, to make sure you will not have issues when you need to renew your roadworthy certificate). If you do find malfunctions, you can use that to negotiate with the seller. Ask for him to fix the issues or get a good discount so you can use the saved money to fix it up yourself.

Homework

Assess your car choices with some research:

1. Manufacturer’s websites

2. Buyer guides in car magazines or newspapers

3. Reviews of the make and model

4. Reliability surveys

5. Australasian New Car Assessment Program (ANCAP) ratings

6. NRMA Insurance Car Security Scores.

7. Guide for fuel consumption from (https://www.greenvehicleguide.gov.au/)

8. Resale value from (http://www.redbook.com.au/)

9. Warranty

10. Model cycle (Buying a model which is going to be upgraded soon will give you negotiation leverage)

Test drive

You need to know how the car works after it’s done a few kilometres. So if you have a friend with the same car or if you can rent one, do so and test it out for yourself.

Negotiate and be firm

Never trust the first price the salesman will quote you. You need to stand firm and make a counteroffer using your research until you reach a mutually agreed-upon figure. This process needs patience and good humour. If you get frustrated the salesperson may resist further nudges on a lower price (it all depends on how much they like you). If you are generally impatient, leave your phone number and they might come back to you with a better offer, especially, if you mention another deal taking place.

When you are signing a contract do not sign for extras until you have shopped around. Read your contract and ensure everything you have agreed upon is on there. Lastly, sign your contract near the end of the month. Their Monthly sales target will encourage them to give you more, to get the sale.