• Car lots vs. Private sales
• What should I be thinking about when buying a car
• What’s the best I can get for my money
• Car Insurance
• Extra: My responsibilities (WIP)
• Extra: Maintenance (WIP)
Whether you’re 15 or 30 – buying your first car can be a daunting task. Not only for those that have basic knowledge on cars but even to those enthusiasts that buy every copy of New Zealand Performance Car or Fast Fours magazine that hits the shelf.
You’ve been saving for months and months, maybe your parents are buying you something for your birthday or maybe you’ve just come into that trust fund that has been waiting for you. But what do you buy and where should you buy?
Car lots vs. Private sales.
It has long been argued what is best to buy from, a car yard or a private sale? Really, when it comes down to it each has their Pro’s and Con’s and none is better than the other, just be aware of what’s out there and what you can encounter.
Expensive Cars – Quite often car yards are more expensive however some yards you may find the odd diamond in the rough just waiting for you. Remember don’t let the stickered price put you off, even with a dealer you can negotiate the price.
Salesmen – Beware the salesmen, this is sometimes exaggerated but not a myth. Some car yards have excellent sales people, but others can have very pushy sales men who may not sell you the car you want or can really afford. Remember what your set budget is, and if he isn’t asking you questions he isn’t really helping you.
Tip: If you’re younger, take a parent with you that has a clear head for saying no as some sales people can be quite pushy.
Financing – Car yards are excellent for offering finance on your vehicle making it easier to afford that car which is just a bit more than what you can afford in cash but is a real bargain. But remember, always check on what the interest rate is, who the finance company is backed by and also obtain a final figure on the cost including interest before signing any documents!
Extra’s – If the car is financed through the car yard, the finance company will require insurance on a secured loan; take this as an opportunity to see “what the yard can do for you”. Also if you’re paying a premium for the car, enquire about mechanical insurance for the 1st year, don’t be shy to check the service history and if required soon ask about a service, new tires, cam belt, etc… Reputable car yards get a very good rate on these type of extra’s and will often not cost you an extra cent but you have to ask!
Fault Cover – A huge win for buying a car from a Car Yard is the assurance that if there is something mechanically wrong with the car, this will be covered by the vehicle dealer. Buying from a Car Yard, some yards may provide some sort of mechanical warranty. While this isn’t a common occurrence (unless for an additional fee), be assured the car will be covered by the Consumer Guarantee’s Act – should the dealer fail to take action to resolve any issues a claim may be filed with the Motor Vehicle Disputes Tribunal. You may find more info at Consumer Affairs: http://www.consumeraffairs.govt.nz/c...les/index.html
Cheaper Cars – Generally as a private seller is just trying to make their money back and not run a profit, you will find advertised prices cheaper. Again if you don’t believe the price is right and the person can go cheaper, negotiate, however this is not a car yard. Give them a realistic figure, do not try and buy a Ferrari for the price of a Corolla or you will soon be burned with what could have been a good deal when the seller has had enough.
Cash talks – Car yards don’t mind financing as if anything they can generally get away with having you buy additions you may or may not want, however when it comes to private sales – cash talks. A good way to bring the price down on a buy is to offer cash then and there; this makes your offer that much more appealing and you may get away with quite the bargain.
“Lemon” Checks & VIR’s – When browsing cars, you may check basic information on the cars history via http://carjam.co.nz for info such as Odometer readings, WOF/Reg. When purchasing privately, always complete a VIR report (http://vir.co.nz) or similar, to obtain the full history of the vehicle. With this you will want to pay particular attention to:
1. Ownership of the Car – is the person selling the actual owner (ask for ID before handing cash over)
2. Security on the Car – does the car have money owing on it from a secured loan?
3. Car’s history – does the Odometer match, is the WOF/Rego current
If you’re a serious buyer, also have a check completed of the vehicle to ensure it is in expected mechanical & structural condition. Have an inspection completed, such as the AA Pre Purchase Inspection: http://www.aa.co.nz/motoring/buyings...s/default.aspx
What should I be thinking about when I buy?
There are a few main things you will have to think about when purchasing your car.
1. Do you actually need a car right now? A car can be a huge financial burden, so always insure you
infact need a car or should you only want it – that your financial situation is ok to do so.
2. The purchase price of the car – what can you afford? (we’ll talk about this one more later)
3. Can I get insurance for the car – if so can I afford it?
4. Can I afford the petrol to run the car? How many km’s will I be travelling
5. Can I afford to have the car serviced regularly?
What’s the best I can get for my money?
There is a huge variety of cars out there and what you can get really depend on how deep your pockets are, and what you’re after. There are plenty of cars out there so your best bet is to jump on the likes of http://trademe.co.nz or http://www.autotrader.co.nz/ and see what is currently available for your price range – however we will run through some of the ranges below.
As a general rule though – think of what you’re prepared to spend, now take 20-25% of that total away, this is how much you have to spend on your car. The remainder will go towards your insurance, maintenance & other running costs of owning the car for the first year.
Remember: there is no perfect first car – buy what you want and are happy with. If you’re intimidated by driving, then feel free to go for a lower displacement front wheel drive car; if you’re more comfortable then go for a more expensive, faster car. The choice is up to you!
In this bracket, be looking at FWD (front wheel drive) and/or small capacity engine cars (under 2L), there is a huge array of cars that fall into this category as they’re generally cheap to maintain, light on fuel economy & cheap to insure. This will include cars such as:
Honda Civic / Integra
Toyota MR2 (AW11) / Corolla
Mazda MX5 / Familia
Nissan Pulsar / Skyline (GTS)
This opens you up to a much larger selection of cars, you can start looking at higher performance FWD cars (VTEC Honda’s), and other RWD/AWD vehicles including forced induction (turbocharged) or higher capacity engines.
R32 Skyline (GTS25 & GTST)
Holden Commodore (while available in the cheaper range these are harder on the gas)
Honda Integra/Prelude VTEC
Toyota Levin / Celica
This brings you into the enthusiast selection of cars, those who want to make cars a lifestyle more than a simple A > B. This range opens you up to higher performance cars including big displacement and/or larger turbocharged engines. This range will also allow you to buy a newer , sleeker model car even if performance isn’t a factor.
Subaru WRX STi / Legacy B4
Nissan R33 Skyline GTS25t / R34 Skyline 25GT / S15 Silvia (S-Type) / S14 Silvia (S-Type)
Toyota Levin BZ-G / Celica GT-4 / Altezza
Audi A4 Quattro
VW Golf GTi
Honda Integra Type-R / Civic Type-R
When choosing a car, you must always take into account car insurance. Just because you can afford a car, doesn’t mean that the world thinks you’re ready to have it! Always check with insurance companies prior to purchase on if you can be insured for the car.
Always check who the insurance company is backed by, and their strength rating as an insurance company – the most preferred being those backed by IAG (http://www.iag.co.nz/) such as State, NZI, NAC, etc….
Due to being your first car, you will most likely find the following restrictions:
1. Restricted or less & under 20, no forced induction cars
2. Under 25 & first car, very strict on “high risk” cars
3. Restricted or less, strict on high displacement engines
There are a few things you must also take into account when costing out your insurance:
1. My premium, how much will I pay each month/annually?
2. My excess, how much will I pay if I have to claim?
3. Does my restricted/learners licence increase my excess?
4. Does my age increase my excess?
5. Do I need 3rd Party, Fire & Theft (RECOMMENDED MINIMUM!) or Fully Comprehensive?
6. Do you offer any extras I need such as Window Cover & Roadside Rescue?