Vehicle - Buying a car for the first time?

The car-buying process is never filled with so much uncertainty as the first time. Whether you just landed from overseas buying your first car isn’t easy.

To make life easier, we’ve put together essential tips to help you buy your first car. Find out what you need to know about purchasing a new car or a used car, car insurance and your car finance options.

Assess your needs.

Practical considerations to keep in mind when buying your first car even if it is not brand new:

• What safety features are important to you?
• How many passengers will you be frequently carrying?
• What type of driving do you do: highway, off-road, etc?
• How much parking space do you have?
• Do you need large cargo capacity?
• Is fuel economy important to you?
• Do you need all-wheel drive?
• Will you be doing any towing?

Understanding what is essential to your needs will make the car buying process seem logical, how many of these things are met with the car you are looking at

Budget.

Buying the car is just the start of your expenses. The extra costs can really add up on top of the drive away sticker price. Be realistic and identify the car you really want. Understand your driving requirements and what you can afford

Take into account:

• Registration fees (yearly)
• Transfer fees (used cars only)
• Stamp duty costs
• Insurance
• Petrol
• Mechanical maintenance

Finding the right car.

When considering the ‘Right” car you are looking to get value for your money. Consider the safety features, the inclusions when compared to your needs, the overall costs and the environment.

New Vs. Used

New Cars. New cars come with a warranty, and more often are more fuel efficient, reliable and safer than their former models. They depreciate significantly in value over the first few years, so if you intend to sell it early on, you could find its value has dropped 30% or more from what you paid 

Used Cars. You can make great savings by buying a near new, and sometimes the car is still covered under the manufacturer’s warranty depending how old it is. Used cars are great when looking for your first car as they are quite often much cheaper than a new car, but can still have the features that you are looking for. When buying a used car, it is smart to consider the history of the car before purchase such as has it been well maintained and has it ever been in an accident.

Your finance options.

Different car payments methods:

• Savings. Pay for your car outright using a dedicated savings account
• Personal loan. Take out a personal loan to cover all or part of the cost
• Dealer finance. Borrow from the seller and pay back in instalments.
• Private leasing. Often leaving a balloon payment or lump sum payment at the end of the loan to finalise the lease.

The Key to Getting Approval For A Car Loan

Before approving a loan, lenders will check your credit rating. Information stays on your credit rating for at least 7 years, so if you think your credit rating is borderline, raise this issue with your potential lender. Honesty about the situation shows you are responsible and ensure that you stress the problems have been resolved.

Before you buy the car.

Check Legal Ownership

Check with the Personal Property Security Register (PPSR) to see if a vehicle is encumbered. If a vehicle is encumbered, it can be repossessed from you after purchase because there is money owing on the car, or that the person selling the car does not have ownership rights. To do a PPSR check, you will need the current registration certificate

Is the car encumbered?

• Does the seller have true, full and outright authority to sell the car?
• Does the car and rightfully belong to the seller?
• Is the car carrying any financial debts?
• Has it been used as security on a loan which has not been discharged?
• Can the car be repossessed although you have bought it in good faith?

Drive away happy

Test Drive

Get behind the wheel, and see how you feel. Spend 15-30 minutes getting used to the car, and test it in different road conditions and speed levels. When you’re on the road, consider if the car is mechanically sound, and attempt parking it to test visibility.

Safety ratings, checks and inspections

Check out the safety ratings, and have a mechanical inspection and encumbered vehicle check. A mechanical inspection report should be recent and thorough; if you don’t have expert advice readily available you can organise an inspection through the State or Territory Motoring Association for a small fee. When buying a used car, ensure you have an encumbered vehicle check so you can rest assured the car cannot be repossessed due to the owners’ unpaid debts.

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