Which New Car to Buy?
Deciding What New Car to Buy
Here are a few questions to keep in mind when you start:
- Will the vehicle be a first or second car?
- Do you want a manual or automatic transmission?
- Do you really need four-wheel drive? Or all-wheel drive?
- What safety features do you want?
- Do you require a lot of luggage-carrying capacity?
- Will you be doing any towing?
- Will the car easily fit in your garage or parking area?
- How many people do you need to transport?
- What kind of driving do you most often do?
- How long is your commute?
- Is it important that your next vehicle is not too heavy on the fuel?
As a rule of thumb, your total monthly car payments – whether you own one car or more than one – shouldn’t exceed 20 percent of your monthly take-home pay.
If you’re interested, we can help with pre-approved car finance, or a Car Loan Calculator.
Buying a car is more expensive initially and the monthly payments are higher. But at the end of the loan, you will own a car you can still drive or sell.
Other key factors that differentiate buying and leasing:
Advantages of Buying
- If you like to customise your pride and joy, then it make more sense to buy it than leasing it, as you can invest and customise it to the way you want it without having to worry about resell value
- No mileage penalty
- Increased flexibility — you can sell the car whenever you want
Advantages of Leasing
- You can drive a better car
- You can drive a new car every few years
- No trade-in hassles at the end of the lease
Read more about different types of leases here
When considering whether to go for a more upmarket model of a cheaper car make vs. a more basic expensive make, remember that fleet buyers invariably choose the most basic model. When you go to sell, it will usually be much easier to sell the car with the higher spec compared to the more basic, expensive car. Additionally, if you like comforts and conveniences, you’ll appreciate the same choice.
The only exception here are cars for $20,000 and less. Because of the very tough competition around this price point, the model levels for the same car can vary from $19,000 to $25,000. When selling, it can be difficult to get good money for the higher spec as many buyers will take the attitude that he/she can have the same model car new for a very similar price (even though the spec is lower). The point here is that the price difference between the base model and the highest spec is over 30% (because of the low base price).
Did you know that depreciation is almost always a bigger cost than fuel in the first three years of ownership?
Car buyers have been trained to visit local dealerships to find the car they want. In the Internet age, this is a waste of time and money. Visit the manufacturers site and check what options are available. (See Step 10 below).
If you prefer to venture out to the dealerships yourself, be aware of the usual dealer tactics before you become a victim.
Ring a nearby dealership and explain that you are not yet buying – you just want a test drive. The standard trick by the sales person is to invent a reason for having to ring you back. He/she wants you in his/her database and will then ring you daily (or at least every second day) until you buy. In many cases he/she will also “give you a spray” when you buy elsewhere.
Some customers choose to avoid this by not giving out their phone number (e.g. saying it’s a silent number, doesn’t have a mobile and can’t leave a work number). At the test drive, they “accidentally” give the wrong phone number.
The goal of a test drive is to experience – as closely as possible – the same type of driving conditions the car will be used for after purchase. If you commute, drive the car in both stop-and-go traffic and at freeway speeds. This will let you check out the road noise levels and also see how hard you have to push the engine. If you frequently drive into the mountains, try to find some steep grades to climb. Drive over bumps, take tight corners at aggressive (but not dangerous) speeds and test the brakes in a safe location, such as a deserted car park. Get in and out of the car several times and be sure to sit in the back seat, especially if you plan on carrying passengers. In short, ask yourself what it will be like to live with this car for a number of years.
While you are evaluating the car, don’t be distracted by the salesperson’s talk. Turn the radio off — you can look at that later. A new car is a big investment; make sure you spend enough time really looking at it. And then, consider one last thing: your intuition. If you are uneasy about this car, follow your instincts. A vehicle purchase decision is too important (and expensive) to undertake without total confidence.
The sales person will do his/her utmost not to lose track of you. In some cases, he will even offer to go with you to your next dealership to look at another make. The best way to stop this from happening is not to tell him anything about where you are going and leave no phone number.
NOTE: The prices listed on the manufacturer site do not include government and dealer charges.
Dealer charges usually range between $1,200 and $1,500 (but sometimes exceed $2,000). You then have to add stamp duty on he total price.
Stamp Duty
Stamp duty (also called motor vehicles duty, depending on what state you live in) generally ranges between 2% and 5% of the cost of the car. The “cost of the car” is defined differently depending on where you live. In Queensland, for example, the cost is the recommended retail price of the car, plus accessories (including such things as carpet mats, paint protection, sunroof etc.). In most other states, stamp duty is calculated on the actual sale price of the car.
Stamp duty information can be found here:
Luxury car tax
The luxury car tax is currently 33%. It applies on every dollar above $65,094 (for the 2017-2018 financial year). The fuel-efficient car limit for the 2017-2018 financial year is $75,526. It applies on accessories too, so educate yourself about how you should deal with accessories before you buy. Car dealers make a profit on such items and are keen for you to have it done by them, even though you will pay excessively.
Click here to keep up to date and learn more about Luxury car tax.
Now it’s time to narrow your choices down to one car purchase.
If your choices are similar cars (which is very likely), the prices will be similar. They are most likely competing against each other, and any discounting by one is usually matched by the other.
Testimonials
Don't know how you achieve your prices but it certainly makes a difference, avoids the hassle of dealing with salesmen and has been excellent value for money. Will definitely recommend your services to family and friends.
A.J., Melbourne
Just to let you know that we took delivery of the new Mazda SP23 last night with the customer service from the dealer first class. I would like to take this oportunity in thanking you for your help, professional advice and most important getting me a great deal on the Mazda SP23 that I would never have achieved.
C.A., Perth
We weren't sure what to expect when using this service. It turned out to be one of the cheapest, stress-free and best investments we've ever made! Within a few hours of our enquiry Carbroker.com.au came up with a deal that saved us 13% off the recommended retail price of a new car. Further, by using the advice provided to members regarding the sale of our used car we were able to get $1500 more than any previous trade-in offer in just a matter of hours! This is a fantastic service that in total, put about $5000.00 in OUR pocket - not the dealer's! We'll never buy another new car again without going straight to Carbroker.com.au!
D.W., Sydney
Thanks for the quote. I am kicking my self slightly. In the weekend I went to my local dealer to test drive the car and was offered exactly my spec with 1500km on the clock. 3 months old for $55K (the GMs car). I had to make a call on the spot because another chap was also looking at it. I thought this would be pretty hard to beat so i went for it. If i had waited i guess i would have an absolutely new car and with 12 months worth of rego not 9. We live and learn. Next time. Thanks and regards
W.D., Sydney
A short note to say thanks for the professional and profitable service that you've just delivered to me. Getting the best price from the city and then translating to a country dealer in a small town made it a lot easier. You'd be surprised how many times we bump into each other, and taking the local personality out of the negotiation was much appreciated by both the dealer and myself.
K.P., Armidale
Chris, You are a champ. Your advice on the trade-in worked a treat. I have a buyer at $14,280. A cool $2280 above the original figure! Thanks mate!
B.M., Melbourne
It is a sorely needed service as we have had nothing but stress and grief with the dealers we have approached ourselves.
J.F., Melbourne
I received my new car last week which was the fisrt time I set foot on a car lot during this and it was one of the most painless experiences! I have and will continue recommending your services to all my friend and colleges. Thanks for the prompt, professional service and the huge savings.
C.J., Brisbane
WOW FACTOR!! For the sevice provided, the lovely people that are always a pleasure to deal with and the easy delivery of the new car that I requested - I am an extremely happy customer. I was lucky to stumble across the Carbroker.com.au website and have told friends and family that there is no better way to buy. Chris - thanks for doing a great deal for me in the purchase of the Toyota - saved me thousands of $$$ and found me a beautiful new car. Fantastic website & a lovely person to do business with. Cheers!!
C.S., Rye
All I wanted was to buy a car with no hassle and at a decent price. I was very happy with your service and I will use you again in the future. I guess that says it all, doesn't it?
A.M., Brisbane