Tips for buying a motor vehicle
Understanding the right vehicle for you is key, so it’s important to do your research before you go shopping. Knowing your options and doing pre-purchase due diligence checks means you’ll be equipped to make smart decisions.
Before you even start looking, ask yourself the following questions:
What is the main purpose of the vehicle – work, travel, leisure, getting the children around, etc.
What make and model will meet your purpose?
How much can you afford?
Who do you buy from?
Purpose of the vehicle
Understanding upfront what the sole purpose of the vehicle is for, will help to take the emotion out of your decision making. If the purpose is for transporting your children from A to B, then it’s important that the vehicle has enough room for all of your children. That would rule out all small vehicles for a larger family, so you’re going to be less likely tempted by a V8 sports car.
What make and model will meet your purpose?
It’s important to consider a number of factors when deciding on the right make or model:
What type of driving will you be doing - city driving, long distance driving?
What are the safety ratings and how will this affect your insurance payments?
What are the fuel consumption ratings and how will this affect your fuel budget?
Petrol or diesel - diesel may be cheaper to run but requires an ongoing budget for Road User Charges (which could result in fines if this isn’t maintained).
How easy is it to maintain - eg. spare parts?
Average resale value?
How much can you afford?
It’s important to understand your budget before you purchase your vehicle, especially if you're considering a loan. The online application will help to itemise your current financial situation - money coming in and money coming out. You will also need to consider the ongoing costs that come with purchasing a vehicle, such as:
interest and fees on a loan
insurance
licencing fees
warrant of fitness
regular servicing (warranty insurances will insist on this)
maintenance and repairs (regular attention can reduce significant repair costs)
fuel
Road User Changes (RUC) for diesel vehicles
Who do you buy from?
Motor Dealership – buying a car from a licenced motor vehicle trader provides more protection under the Motor Vehicles Sales Act. A dealer must display a Consumer Information Notice (CIN) on used cars which lists: vehicle history, make and model, cash price and if any money/security is still owing on the car from the previous owner. Read more about Motor Vehicle Traders’ responsibilities to buyers.
Private sale – this is a popular option as buyers believe they can negotiate a better deal, however this provides the buyer no warranties or guarantees. Finance companies may have additional lending criteria for private sales.
Auction – this is another popular option, however prior research to understand the value of a car is a must. It is easy to get caught up in the bidding hype and end up paying more than the car is worth. Similar to a private sale, vehicles purchased via an auction have no warranty.
Whether you buy privately, by auction or with a motor vehicle dealership, a pre-purchase inspection should always be carried out before committing to your purchase.
For independent advice, refer to the Consumer Protection site.