http://carsguide.news.com.au/story/0,20384,17177442-5001701,00.htmlAfter buying a house, buying a car is the second most expensive purchase most of us are ever likely to make in our lives so it's important to get it right.
Here are a few handy tips to help you make the right decision:
NEW OR USED
Nothing beats the smell of a new car, the thrill of driving away in a car that is yours, one that's never been owned by anyone else, but it comes at a price in the form of depreciation. You can virtually write off 20 per cent of the purchase price the moment you drive away from the dealer because it's then a used car. Cars depreciate faster in the first two or three years of their life and the new car buyer has to cop that for the pleasure of being the first owner. By buying used it's possible to avoid the heaviest depreciation. Cars will still depreciate in their latter years, but at a lower rate.
New car buyers can choose the colour of their car, the trim colour, the engine, transmission and other options and accessories, but used car buyers have to take what's available.
New car buyers have the reassuring backup of a new car warranty so they know that if anything goes wrong they won't be up for a big repair bill. Anyone buying from a used care dealer will also have a warranty, but it won't be for as long as the new car warranty. Private buyers don't have any warranty.
By buying used it's possible to get behind the wheel of a better car than you might when buying new. For the cost of a new Commodore or Falcon it is possible to drive a used BMW or Mercedes-Benz.
There is always the risk of buying a 'lemon' when buying used because there is no way of knowing how previous owners have treated a car.
NEGOTIATING WITH DEALERS
It's a buyers market which means you can bargain with dealers for a better deal, but you need to be prepared for the battle.
Do some homework on market values before you go shopping so you know the value of the car you're buying and the value of your trade-in. That way you'll be better placed to barter with the dealer.
Have your finance arranged before you go shopping, but don't tell the dealer. Dealers will often cut the price of a car believing they'll make money on the finance.
Don't settle on the first car you inspect. Visit a number of dealers and compare deals before making a commitment.
Look for a dealer well stocked with the car you want and he'll be more prepared to deal.
Shop towards the end of the month when dealers are looking to get their quotas up.
FINANCING YOUR WHEELS
Few of us are able to hand over a wad of cash to pay for our car, we all need finance for the purchase.
Before you start work out how much you afford to pay, and how much you can afford to repay.
Don't be tempted to use your credit card to pay for your car, the interest rate on credit cards is generally very high.
Shop around to save money.
Finance through dealers is the most expensive, dealers are on-selling the finance to you and they are making a profit on the deal, so cut out the middle man and go straight to the source of the finance.
Banks offer finance at a cheaper rate than the dealers, but approval can take time.
Independent finance companies specialising in car finance often have the lowest interest rates, and some offer fast approvals with an on-line service.
WHERE TO BUY
Buying from a dealer gives you the security of a warranty. By law dealers have to give you a warranty which gives you some recourse if something goes wrong with the car later. To search for new and used dealer cars on carsguide.com.au
click here.
Dealers also have to guarantee ownership of the vehicle, that there is no outstanding finance on it which might complicate matters later. They also have to guarantee the odometer reading.
It's possible to buy cars cheaper at auction, but there are risks. There's little chance to check a car over, there's no chance to drive it, so you take a risk on its condition. The auction environment is not one for the faint hearted, it's fast moving with lots of little nods, winks and gestures for those in the know. Spend the time to visit auctions to become familiar with them before attempting to join in the action. It's a good idea to take along someone with mechanical knowledge to help you assess the cars before the auction starts.
Buying privately can be a way of saving money, but it can be risky for the unwary. There is no comeback with a private purchase, once you've driven away you're on your own. To search for private party cars on carsguide.com.au
click here.
USEFUL CHECKS WHEN BUYING USED
If you're buying a used car privately you should proceed carefully.
Shop around before you spend. Look at a number of cars so you can get a good idea of the prices, average odometer readings and general condition of cars on offer so you're armed and ready to negotiate with the seller.
Ask to see the car's service book and check its service history. It is worth making a phone call to the service agent and ask them about the car. If there isn't a service history walk away.
Check with the RTA to make sure the seller is the owner of the car and that it has a clear title of ownership with no outstanding finance on it.
Have the car checked by the NRMA or other respected organisation who will be able to give you a pre-purchase inspection and report on the condition of the car.
Buy a car with as much registration left on it as possible. That way you won't have to spend a few hundred dollars extra soon after buying it.
Before test driving a car make sure it is insured and that the coverage includes you as the driver.
