L2P – Buying Your First Car
Here’s our guide to help you get on the road.
Buying your first car can be daunting. Do you go for your dream car, or something basic to get you going?
How do you deal with all the choices, options and pathways out there? How do you avoid getting that lemon? (What is a lemon, anyway? 🍋)
Where to buy a car?
There are two ways you might buy a car – privately or from a dealer.
Private
- From a friend
- Side of road
- On the internet
Dealer
- Car Yard
- On the Internet
- Newspaper
Buying a car privately may be cheaper and give you a lot of options to look out for.
Buying a car from a dealer could be more expensive, but can give you certain legal protections and they will deal with some of the legal paperwork required to make that car yours.
Whoever you buy a car from, you have the right to check out the car thoroughly to make sure it’s a good car for you.
You should give it a good inspection, take it for a test drive to find out how it feels to drive (and check for problems) and consider having a mechanic check it out for you.
(a mechanic check such as one through RACV https://www.racv.com.au/on-the-road/buying-a-car/vehicle-inspections.html will give you certain guarantees)
If you buy a car privately then by law you will have 14 days to register the sale with Vicroads.
If you plan on driving the car it will also need to be registered – and to do this you will need a Roadworthy Certificate (RWC).
You can get a RWC from any mechanic that is accredited to do so by Vicroads. If the car isn’t roadworthy they will give you a list of things that must be fixed within 28 days. It is much easier and safer to buy a car that already has a RWC. You will then need to pay a transfer fee and an additional duty that is around 5% of the sale price.
You will also want to make sure that the person selling the car is allowed to sell the car – that it isn’t listed as stolen, or the property of a credit company. You can do this at www.ppsr.gov.au
When you buy a car from a dealer you should ask to have all of these costs included in the sale price as ‘on-road’ costs.
The Dealer will also complete all of the paperwork on your behalf, although you should check it all carefully.
The advantage of buying a car from a dealer is that you have a 3 day cooling off period (time to change your mind) and for cars under 10 years old there is a guarantee and warranty included by law. You don’t have these when buying privately.
For more on buying a car check out the information on the Consumer Affairs website: https://www.consumer.vic.gov.au/cars/buying-a-new-car
How much?
First, you need to think about your budget. It’s important to make sure you buy a car that you can afford, and you know that as well as the price tag on the car there are other up-front costs, as well as a few ongoing costs you‘ll need to keep paying.
How much money have you got saved? Do you plan on borrowing money for it? How much money can you afford to repay each month along with all the other costs?
Initial Costs
- Purchase Price
- Mechanic check
- Roadworthy Certificate
- Transfer of Ownership
- Registration
- Insurance
Ongoing Costs
- Fuel
- Servicing
- Toll Roads
- Repairs
- Loan Repayments
- Fines
Once you know your budget – how much money you can afford to pay to get a car, while leaving yourself some money for the ongoing expenses, you can think about the kind of car you are after.
Are you looking for a brand new car, or an older car that you can snap up at the right price? What kind of car do you need?
For your first car, we recommend not buying a brand new car (did you know a new car loses about 30% of its value the minute you drive it away from the dealer?) but something recent.
A car that is less than ten years old has two advantages – it’s less likely to have major mechanical issues coming up, and it is more likely to have a good set of safety features. In Australia cars are ranked on safety with an ANCAP rating out of 5 stars. You should aim to get a car with 4 or 5 stars. See www.howsafeisyourcar.com.au
Smaller cars are cheaper to run and easier to park. Bigger cars will give you more space for friends and family, or if you’ll regularly need to carry lots of equipment for work, study or sport. You should also consider how important to you features are such as air conditioning, cruise control, entertainment systems, and the type of interior.
Servicing & Repairs
Your car will need regular servicing and may need repairs. Consider these costs and try to have money set aside. Lights, tyres and brakes need to be replaced, and your oil changed at regular intervals to keep the car safe and roadworthy.
Toll Roads & Fines
If you are going to drive on toll roads (like Citylink) then either get an account, or make sure you pay within 3 days of driving on it, otherwise you will receive fines and extra account fees. As the owner of the car you can also become responsible for fines that are incurred by your car. If you receive fines in the mail for your car, it’s important to either pay them (if you were driving) or send in the form telling them who was driving (if you weren’t driving) within 28 days.
