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The steps of buying a car in Australia


Laine Gordon

By Laine Gordon

5 min read

If you're on the hunt for a new vehicle there are plenty of steps to take to make sure your savings account doesn't take an unnecessary hit.

From warranties and insurance to choosing the right vehicle for the job, make sure you consider every aspect carefully before committing to a car loan or maxing out your credit card. Here are the simple steps to follow when buying a car.

Start with research

This is the easy part — if you know what you want. You should consider your driving habits and needs. Are you a single person, driving to the train station and occasionally the shopping mall? Or are you part of a large family that drives all over town on the weekends? As you can see with just these two examples, very different vehicles are required — so don't just go on looks.

Once you've figured out what type of car to look at, compare the stats online to see which makes and models provide better fuel economy, safety and other features. Of course, you do want to drive something you're proud of, so we take it back — looks do count a little bit.

Get on the hunt

Once you've decided what you're looking for, you need to choose the method of car purchase you're most comfortable with. According to the New South Wales government, when buying from a dealer you have a lot more legal protection than if you buy from an individual or at an auction. This can include guarantees that there is no money owing on the vehicle and that it hasn't had flood or hail damage.

Buying a car privately can unearth some great deals, but you will be much more reliant on your own knowledge and experience without those guarantees in place. If you're unsure of whether or not you're capable of doing this, take along a knowledgeable person that you trust. You can also have cars checked by mechanics at your own cost.

Get your finance sorted

When buying a car, most of us don't have the cash just sitting in our savings accounts, so a personal loan or car finance becomes necessary. When you buy from a dealer, they can offer you finance and insurance, but you aren't under any obligation to use their products.

In fact it pays to shop around, according to Matt Burgess, finance director at 360Finance.

“The number one tip is to definitely shop around for the best rate, preferably before purchasing a vehicle. The rate offered by your bank or the motor dealer may not necessarily be the cheapest rate or the most suitable product for your personal situation,” he said.

You can conduct your own car loan comparison and choose the finance that offers you the best deal and most suits your circumstances.

Sort out the fine details

Once you're sure that this is the right car for you — and before you sign anything — make sure all of the details match up with legal records and that the car is good to go. This is particularly important with private sales. Each state has different rules and regulations, so make sure you brush up on these, especially if you've recently moved and are unfamiliar with the local legalities.

For example, Queensland has safety certificates that should be in place when the vehicle is sold, and Western Australia allows transfer of vehicle ownership between individuals online.

Every situation is different, so make sure you find out what is applicable to you and your circumstances.

It's important to understand the finer details of your car loan and how they apply to your needs, too, adds Burgess.

"Make sure you structure the loan taking into account things like, how long you are likely to keep your vehicle so as to avoid unnecessary fees and charges," he said.

"For instance, taking out a seven year loan might reduce your minimum monthly repayment, yet most car finance products are fixed rate loans and paying that loan out after three or four years may lead to expensive early payment fees and charges." 

Once you know you have everything on the level and your finance is ready, you can start thinking about negotiating on the price and the extras.

Get ready to drive away

Owning a car comes with all sorts of responsibilities that you need to make sure you're ready for. Aside from stamp duty and other taxes that you need to pay, you should also make sure that you have sufficient insurance in place when you drive off the lot.

The last thing you want is to pull away in your nice new car, only to write it off in a freak accident on your way home. That sinking feeling in your stomach will only be second to the sinking feeling your savings account will experience.

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