A Guide to Buying Your First Car

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Buying a car will be one of the biggest purchases you make in your life, especially if it is your first one!

Whether you’re freshly 18 or you’ve been roasted for too many years to get off your L’s, buying a car for the first time is exciting for everyone. However, there are a few things you need to know before you make the purchase.

The costs of buying a car

There are many upfront and ongoing costs that come with a car. These include:

  • Buying the car (can be outright, through dealership finance or loans)
  • Stamp duty – it is a type of tax that is generally built into the car price (except for with a private seller)
  • Extras when purchasing new from a car dealer – leather seats, window tinting, extended warranty etc.
  • Registration

If you’re buying a new car, you need to get it registered and pay that fee. If you’re buying a used car, there will be a fee to transfer the registration or ownership, or you may need to renew the car’s registration.

  • CTP (Compulsory third party) insurance

This is mandatory in all states in Australia and is needed to register your car. This insurance covers injuries to others that may be caused by your car in an accident.

  • Additional insurance – other insurance covers instances such as theft, fires, storms, and flood damage
  • Maintenance, repairs, and fuel (the price of fuel atm is no joke!)
  • Car loan repayments (if you don’t buy your car outright)

Who can you buy a car from?

Licensed trader

Buying from a licensed trader gives you more protection because you’ll receive:

A notice of particulars

  • This notice will tell you the car’s manufacturing date, the odometer reading, whether the car is written off or stolen, the engine number and more. To find out more, click here.

A three-month statutory warranty if the car is less than 10 years old and has travelled less than 160,000km

  • This warranty ensures the trader fixes any problems that arise with the car within three months of purchasing it and to a good condition.

A certificate of registered interest (shows you whether the car is stolen or the owner owes money to pay the car off)

A three-day cooling period to cancel the contract/payment

Licensed car traders are required to also provide you with the following when buying a used car:

  • The licence number of the trader
  • The price of the car
  • The registration number
  • The engine number or vehicle identification number of the vehicle

Private seller

Using a private seller can be a bit riskier as you won’t get a cooling off period or statutory warranty. You will also have to check if the car has been stolen or has money owing.

Auction

Going to an auction to buy a car is always cheaper but it also comes with more risks. If you buy a used car at auction:

  • The car will not be covered by a statutory warranty
  • There is no cooling off period
  • The car does not require a roadworthy certificate
  • You may not be able to test drive it

When is the best time to buy your first car?

  • EOFY (there are usually a lot of sales on at this time!)
  • ‘End of a month or quarter’
  • ‘Beginning or end of year’
  • ‘Model run out time’
  • A ‘Monday or Tuesday’ (it is often less busy than a weekend and there is more room for negotiation)

Source: https://www.finder.com.au/buying-a-car

Are there different ways to purchase a car?

Yes, there are! The most obvious way is to pay outright, especially if you’ve been saving for a few years. However, this isn’t the only option.

You can fund your car directly through the dealer you buy off and then make regular repayments to pay off the vehicle. But this may not be the most cost-effective as dealers are often looking to make money.

Lastly, you can take out a loan, whether that be a regular car loan, pre-approved loan or finance from a car loan broker. However, a loan may result in added fees or requirements that you cannot meet, especially at a young age.

Tips for buying your first car

Research before you buy

It is important to thoroughly research cars before you buy to figure out which car is the right fit for you based on reviews, specifications, features and of course the price.

There are restrictions on the cars that P platers can use, so keep that in mind!

Set a budget before you start looking

A car is a big purchase, especially if it is your first! To ensure you stay within your means and get the best value for your money, it will be beneficial to set a budget.

Inspect and test drive the car

It is so important when purchasing a car, used or new that you thoroughly inspect the inside, the outside and all in between. Don’t buy the car if the dealer or seller won’t let you inspect the car!

Things to check are:

  • Any signs of previous accidents or damage
  • The doors, windows, boot, and hood of the car
  • Digital and electronic elements of the car such as the air conditioning, radio, screen or Bluetooth
  • Condition of the fabric/leather and carpets (make sure to look under things like car seat covers, floor mats and boot mats)
  • The inside lights, brake lights and headlights
  • The paint on the outside of the car
  • The wear and condition of the tyres (including the spare tyre)
  • Any chips or cracks in the glass
  • Underneath the car
  • The engine (smoke, oil drips, water in the radiator, oil filter caps)
  • The owner’s manual and service history (if buying a used car)

Note: If you cannot inspect this yourself, or would prefer to get a professional opinion, you can contact RACV or a mechanic to check for you.

When inspecting the car, you should always take it for a test drive.

While test driving check that:

  • The gear changes are smooth
  • The brakes work well
  • The speedometer, fuel dial and other electronics are working
  • The engine sounds good
  • All the lights are on/working (headlights, brake lights and hazard lights)
  • The wipers turn on
  • The air conditioning and heating works

Also, you should get a PPSR check to make sure the previous owner isn’t still paying off the car or the car isn’t stolen. To find out how to get a PPSR check, click here!

Check for car safety features

As a young driver, it is important that the car you drive is safe and has safety features such as airbags, rear view camera and more.

Check that you have all the important agreements and paperwork (and read everything carefully!!)

When buying a car, you must obtain the following documents from the licensed trader:

  • The Notice of Particulars – this includes year of manufacture, first registration, engine number, cash price, name of previous owner and odometer reading
  • Defect Notice – this lists the costs of all possible repairs
  • Roadworthy certificate –all cars must be sold with a roadworthy certificate that is less than 30 days old
  • Purchase agreement

Maintain your car regularly

To ensure you repairs and maintenance fees don’t pile up, ensure you’re regularly taking your car in for a service. This way you can find problems early.

If you have purchased a car with a warranty, make sure you check what does and doesn’t void that warranty. Some warranties are contingent on getting it serviced at particular intervals and/or at specific service providers. It’s also important to check that any modifications you make to your car don’t void the warranty.

Look into the car’s history (if buying used)

Make sure to check the car’s history, in particular how many owners it has had and the number of kilometres. This can show you whether the car is worth buying and whether it will last you your desired time.

Don’t be afraid to negotiate (if buying new)

If you want to negotiate the price of a new car, it is important to go in prepared. It might be useful to bring someone that has bought a car before such as a parent or friend.

Now that you know all the ins and outs of buying a car, it’s time to go and make the big purchase.

And don’t worry, we won’t judge you if you buy a basic (white girl) Volkswagen golf or Mazda 3…

For more on the ‘things they don’t teach you in school’ series, click here!

Sources used:

  • https://www.finder.com.au/buying-a-car
  • https://www.racv.com.au/on-the-road/buying-a-car.html
  • https://www.budgetdirect.com.au/car-insurance/guides/car-buying/tips-for-buying-your-first-car.html
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