Buying your first car – here’s what you need to know.
Whether you’re 17 or 30 buying a car is super exciting but you also need to understand it’s an expensive ongoing financial commitment! Please see our tips below to ensure you pay the right price and don’t end up with a lemon.
Work out your budget and stick to it
Crunching the numbers is the first step, even if you are getting a little helping hand from a friend or family member, to see what you can actually afford. It’s easy to get caught up in the shine of fresh paint and or the sales spin from a crafty salesman but there is no point going all in on a car and as a result not being able to afford food or rent. Make sure if you are applying for finance you have a steady regular income that allows you to pay back the amount you have borrowed. Car loans often incur high rates of interest so ensure you don’t rush the decision, understand the terms of the loan and if in doubt get the contract reviewed by a professional such as a lawyer, accountant or financial planner.
Do your research and don't rush
This is the best part! Spend some time researching online by price or model. It’s also important to consider options that will suit your needs: where will I park it? This can determine the size. Is it automatic or manual? How much will it cost to service? Is it economical on petrol? Don't even think about buying the first car you see, shop around, different dealers will offer you different extras to get the sale across the line. Alternatively private sellers will often flex on price if you give the negotiation period some time. Use your experience to negotiate the best price you can.
When you have found something suitable we recommend reading some blogs and forums to investigate reviews from other owners. Some brands just seem to have more issues than others so it’s worth reading the pros and cons. All of these are important questions to answer before purchasing your sweet new ride!
Should you go new or used?
It doesn’t take a rocket scientist to work out that new cars are super expensive, so on a millennial budget it can often make sense to start with a used car at a cheaper price point.
New cars often come with great warranty’s which can reduce your servicing costs over the first three years so if you can afford one there is some comfort here. However if the price of a new car is unrealistic, you can always find reliable well maintained used cars. When looking at used cars it’s always a good idea to check the service history log to ensure the car has been regularly serviced. We recommend you get a used vehicle inspection prior to purchasing a used car. These can be conducted by a local mechanic or there are a number of mobile services across the country.
Understand the added costs of purchasing your new car
Cars are money pits; it isn’t just as simple as purchasing a car and driving off into the sunset. You will need to budget for insurance, servicing, petrol and registration (use this link to calculate the approximate cost of your rego on your new car) just to name a few.
Take someone with you who has purchased a car before
Don’t ever go car shopping alone, ideally take someone older who you trust and who you know has bought and sold cars in the past. Chances are you will be so excited you may forget the following tips and hacks but you can get yourself into some major trouble if you rush the purchase and don’t follow the proper channels to check the car is in perfect working order.
Ask all the questions
Ask so many questions you annoy yourself. Speak up and ask the owner if the car has been serviced regularly? Has it ever been in an accident? What is their reason for selling? The more you know the better position you will be in to make an informed decision about purchasing the car and can use these factors to your advantage in the negotiation.
Test drive the car and give it the once over
It may seem obvious but a test drive is important to see if the car works A-OK, check the steering, breaks and listen to the sounds of the car when it’s running. If you are driving the car and it pulls to the left or right chances are it needs a wheel alignment and speaking of wheels get down low and check the tread on the tires as you may need new ones if they haven’t been up kept or updated for a while. Check the mirrors open and close, windows roll down and nothing has been stuck on with super glue. Do your inspection during the day so you can see the car in the best light.
Don't rush getting on the road.
With all the above said it could take a few months to find the right car at the right price. Don’t rush it, by not completing the right safety checks and negotiating the right price your dream car could turn into a nightmare.
Invest in a NRMA safety check
Once you are 100% sure you have found your new car invest in a vehicle inspection, they will take the guess work out of buying a new car by checking it for any mechanical faults, insuring the car isn’t stolen and that it hasn’t been in any major accidents and then put back together for an unsuspecting purchaser to buy. Read more about the safety checks here.
Maintaining Your Car
“Think of your licence as a 'contract', or an agreement between you as a driver and the rest of society. Roads and Maritime Services and the NSW Police administer this contract on behalf of the people of NSW”
Makes sense right!? Here is a breakdown in 7 steps of how to go from a learner to a full licence, read the ins and outs using the links below:
- Pass the Driver Knowledge Test (DKT) – get your learner licence
- Hold your learner licence for at least 12 months, and complete 120 hours of supervised driving practice, including 20 hours of night driving (unless you’re 25 or older)
- Pass the Driving Test – get your provisional P1 (red) licence
- Hold your P1 licence for at least 12 months
- Pass the Hazard Perception Test (HPT) – get your provisional P2 (green) licence
- Hold your P2 licence for at least two years (24 months)
- Pass the Driver Qualification Test (DQT) – get your full licence.
There are many types of insurance so how do you know which is the right fit for you? In this case more is more. Read on below for a breakdown of the most common insurance policies and why you need them when buying and registering your car.
What is a green slip?
A Green Slip, also known as compulsory third party insurance (CTP) is a legal requirement for all cars and just as the name implies it’s 100% compulsory. In most states and territories your insurance is covered when you pay for your registration fee for your motor vehicle however, in New South Wales and Queensland, you will need to purchase your green slip separately and you can do that online through your chosen company. Your green slip covers you should you accidently cause personal injury to someone in the event of a car accident.
You will have to supply your state or territories roads authority with your Green Slip before they will register your car, it is as simple as taking in into your local branch or if you prefer to do it online once the green slip has been approved by your insurance provider they will automatically let the road authority know that they can now issue you with your registration.
Comprehensive Car Insurance
There is also something called comprehensive cover which covers repairs and replacement of your car and anyone else’s car who may have been affected by an accident. Though a little pricier it’s probably the smart choice to get the compulsory cover to protect yourself and others! Even if you are not at fault there is some comfort in holding comprehensive cover.
Pinkslip and Safety Inspections
If your car is new you can simply renew your registration but if the car is over 5 years old you will have to take it to be inspected before you can re-register your car, this ensures that only safe, roadworthy vehicles are on the road as vehicles that are deemed unsafe will have to fix the issues the inspector has requested before they will be deemed road worthy and given a pink slip which then entitles you to renew your registration.
The government will send you a letter reminding you that your registration is coming up as will your insurance providers and you can choose to renew for 6 or 12 months. Renewing for 12 makes it a little less expensive but those 6 months also seem to come around quick so to save money and headaches so go with the 12-month option where possible.
Other Transport Options
So maybe your bank balance doesn’t provide you with the funds needed to purchase a car and that’s OK, there are a heap of other transport options available to you that are much cheaper and a lot kinder to the environment.
We are blessed with one of the best transport systems in the world, so why not use it? It’s so easy to get around with the use of trains, buses, trams and ferries. Google maps or the maps in your IPhone make it a breeze to know which busses, ferries and trams you need to be catching to reach your destination.
Find your way on your phone
You can simply type in where you are and where you want to go to and Google Maps will give you an in depth map so you can find your way with minimal stress.
Get on your bike
If exercise and fresh air are more your thing, then why not invest in a bike? Bikes are affordable, good for mother earth and great for your health.
The government has recently added a lot more bike lanes to our city streets, so you can feel more safe and in control of your journey. If you are in NSW, you are now required to carry photo ID when on your bike just as you would if you were behind the wheel of a car. The rules have also substantially changed for bike riders so before you ride off into the sunset it is probably worth taking a look over the new laws so you stay safe and on the right side of the law.
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