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Remember that buying a car should be a fun and enjoyable experience. Don’t rush into anything, and make sure you buy the car that is right for you.
Thinking it’s time to update your car? Well depending on your requirements (e.g. budget, standard features, engine performance, fuel economy, safety rating), you have three options:
- Buying a brand new car
- Buying a used car from a licensed car dealer
- Buying a used car privately
Whichever option you choose, there is an abundance of information out there to help you decide, so make sure you do some research. There are a number of popular internet sites and magazines devoted to the buying and selling of cars; with everything from reviews on how it drives, to reviews on how friendly (or harmful!) it is to the environment and how safe it will be in the unfortunate case of an accident.
1. Buying a brand new car
There are many perks to buying a brand new car. Buying new from a dealer means you can tailor your car to have exactly your choice of colour, options and accessories. It also means you have the security of a factory backed warranty on a car that has never been used before and you can get the latest and greatest gear - such as traction and stability control safety systems, iPod integration and incorporated Bluetooth wireless technology.
However, there are trade-offs. The first is that new cars can be expensive and quickly lose a large chunk of their resale value (also known as ‘depreciation’). Also, to fully option your new car with options and accessories can be expensive and may push it out of your price range.
But the good news is that there are usually plenty of similar used cars on the market, almost always at more affordable prices.
2. Buying a used car from a licensed car dealership
While a used vehicle may not have that ‘new car smell’, there are a lot of advantages to buying used from a dealership.
Firstly, unless stated otherwise, the car will come with a limited warranty, a valid roadworthy certificate (mandatory before any car be sold registered by a dealer) and registration.
Secondly, if you are trading-in your existing car you can bargain with the car dealer to reduce the exchange price (i.e. the difference between the trade-in value of your existing car, to the selling price of the new car).
The trade-off when purchasing a second hand car is that you also have to be willing to compromise on the range of options, accessory and colour combinations, which have already been chosen.
In some cases, a second hand car purchased though a dealer is often priced higher in comparison to a similar privately sold car, to compensate for the warranty and the peace of mind given.
It is important to be confident in your purchase, take time to ensure you are making the right decision. Be sure to check with your dealer on their terms and conditions, a cooling off period is a good option to have to protect you and your purchase.
3. Buying a second hand car privately
Buying a second hand/used car privately is potentially the most risky option of all three.
To make things slightly difficult, your responsibilities depend on if you are buying a registered or non-registered (expired registration) car. Be sure to check with your local governing body and your insurers to see their policies on non-registered cars; the safest option is to buy a vehicle that is currently registered.
However, if you complete a few simple checks before handing over any money, the risks reduce dramatically and buying a second hand car privately can be a very rewarding experience.
By obtaining a report on the cars’ status the following important questions can be answered:
- Does the car have any outstanding finance/money owed to it? Is it a recorded security interest?
- Has the car previously been ‘written off’? Has it been severely damaged in the past?
- Is the person selling the car the registered owner?
- Is the registration current, expired, suspended or cancelled?
- Will a Road Worthy Certificate (RWC) be produced before sale? This is required if you are buying a registered car.
Luckily there is a reasonably easy way of getting hold of the relevant report. The terminology used for these checks can vary between states (e.g. VCheck, REVS, WOVR), but by visiting your local road governing body or logging on to their website, you can ensure that you not only meet all their requirements, but also get the peace of mind that your potential purchase is a ‘safe’ purchase. There can be a small fee attached to the report, and multiple reports may need to be purchased to answer all of the questions (e.g. in Queensland, both financial and written-off details can be found on one report; however other states require two or more reports).
At the time of the sale, change of registration papers must be signed by both the purchaser and the seller. This and other paperwork, that were the car dealer’s responsibility to get lodged with the local governing body, are now your responsibility. Remember, always ensure you view the car in the daylight, and never look at it when it has been raining or at night, even in well-lit conditions.
If you have little mechanical knowledge, it is highly recommended that you have the vehicle inspected by a third party – for example, your local motoring body (e.g. RACV/RACQ).
Final tips
Remember, when buying a second hand car privately, it is your responsibility to:
- Invest in a third party inspection
- Obtain the relevant report to ensure the vehicle has a clear title and has not previously been ‘written off’
- Check the registration papers to ensure the seller is the owner. If the vehicle is unlicensed, you need to obtain proof that the seller has the right to sell
- Check if the vehicle has been written-off or stolen
Note that there is no cooling off period for a private sale, so make sure you are 100% confident in the sale before agreeing to the purchase.
Finally, remember that buying a car should be a fun and enjoyable experience. Don’t rush into anything, and make sure you buy the car that is right for you.