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New Car Buying Guide | Tips | CarShowroom.com.au

By Brad Leach -  12/12/09

HOW TO CHOOSE YOUR NEW CAR

Shopping for a new car can be a very daunting process, particularly if you’re a first-time car buyer.

The amount of available information may seem overwhelming, but taking some time to talk to people you trust and learning as much as you can online will leave you better equipped when you walk into the showroom.

For most people, the key to choosing the right car is prioritising the essentials - working out what you need from your new car, rather than simply what you want. Reliability, fuel economy and safety features will become more important than aesthetic considerations in the long run, and the more you know about the options available and how they can make your life easier, the happier with your choice you will be.

Here is a quick guide to help you get started.

Choosing the right car for your use

Finding the car that best suits you comes down to determining your individual needs. Since there are many aspects to be considered, approaching them one at a time might help you get a clearer idea of what you need from your new car.

Factors such as where you live, your environmental concerns, how many passengers you will regularly have or how much equipment you transport can all have a bearing on your decision, as well as the all-important question of how much you are willing to pay to purchase and maintain your car.

Working out what your specific needs are and prioritising them should give you the tools you need to choose the right car for you.

How many seats should your new car have? How many doors?

Deciding how many seats and doors your new car should have will be primarily determined by the space and ease of loading you require for transporting people or equipment.

For instance, many singles or couples without children will find that a three or five-door hatchback will fulfill their requirements in these areas. Hatchbacks have two rows of seats and a small load space accessible through the back door. While a three-door hatchback can offer sportier look, five-door cars are easier to load when taking passengers, and tend to have more comfortable seat belts. The Volkswagen Golf and Hyundai i30 are among the top-selling hatchbacks in Australia.

Generally, small families will find that they are better suited to a sedan, most of which offer roomier seating, four doors for easy loading and a large storage boot. Australia’s most popular sedans include the Toyota Camry and Honda Accord.

Larger families might opt for a five-door, seven-seater vehicle, or “people mover”, which features three rows of seats to accommodate extra passengers. SUVs, such as the Holden Captiva or Toyota Prado, feature the option of a fold-down third row to create more storage space.

Are you a country driver or city driver?

Where you live and work can be a significant factor to consider when deciding what kind of car you should be driving.

For those who do most of their driving in urban areas - which can involve inching along in traffic, squeezing into parking spaces and winding through narrow city streets – the comfort, size and maneuverability of a vehicle will be important. Your car should ideally be compact, with a tight turning-circle and good driver visibility.

Good options for city drivers are hybrid cars, which feature stop-start technology. This means the engine automatically switches itself off when the car is sitting idle – at a stop light or in a traffic jam, for instance – greatly increasing the car’s fuel efficiency. Australia’s best cars for city driving include the Toyota Prius and Honda Civic Hybrid.

For people who do a lot of driving on country highways, the risk of breaking down in the middle of nowhere will make reliability a high priority, and good fuel efficiency will help ease the cost of long journeys. The Toyota Corolla and Mazda3 are among Australia’s most reliable and economical cars.

Country drivers who spend a lot of time on difficult dirt or gravel roads may want to look into investing in a sturdier vehicle with off-road capability, such as the imposing Land Rover Discovery or Toyota Landcruiser.

What difference does fuel type make to your new car?

Choosing a new car may involve developing an understanding of the main fuel types available, and deciding which you prefer to use. Each has its advantages and drawbacks.

Unleaded petrol is the most readily-available fuel type, which makes it quick and easy to fill up. With oil reserves drying up, however, petrol is becoming increasingly expensive, and it produces more greenhouse gases than other fuel options such as diesel and LPG.

Diesel is 30% more fuel-efficient than petrol, which means you will spend less money on fuel. While diesel creates more carbon emissions than petrol, it contributes less to global-warming because your car uses less of it. However, diesel is a major source of particle matter emissions, which are linked to cancer and respiratory disease. On top of this, diesel is generally more expensive than petrol, and the cars that use it tend to be more expensive than their petrol equivalents.

Ethanol is made from corn and grain, which means that it is renewable, unlike oil. On the negative side, ethical concerns have been raised regarding using food sources to power cars while many in the world are starving. Ethanol is also less efficient than the other fuel options.

Liquefied Petroleum Gas (LPG) generates between 10-15% less greenhouse gas emissions than petrol and less particle matter emissions than diesel. It is less expensive than both, and Australia has an abundant supply. LPG is not as fuel-efficient as petrol and diesel, however, and LPG engines are likely to be more expensive and not as responsive.

How much should you pay for your new car?

Once you have decided which new car make and model you’d like to buy, it‘s time to start shopping around for the best prices. Use the internet and talk to friends to help you get an idea of what you should be paying, so you have the information before you walk into a car dealership.

Many websites offer information on vehicle invoice prices – the amount the dealer actually pays for the car. This should give you a good starting point for your negotiations. Unless the car you’re looking at is in extremely high demand, the dealer’s starting price is likely to be well above what you could end up paying.

Once you’re ready to start visiting dealers, you’ll need to prepare yourself to be tough. Car salespeople are renowned fast-talkers, and they will probably try everything they can think of to get you to buy your new car on the spot. No matter what they say, it is important you don’t make any decisions until you have spoken to several different dealers to find the best price. A signed deal will be very difficult to get out of, so give yourself time to take a considered approach.

Most dealers will also try to increase the overall price you pay by talking you into accepting a multitude of ‘add-ons’. The more you know about what you need and want before you enter the dealership, the less likely you will be to be swayed by these sales techniques.

Should I worry about the length of my new car’s warranty?

Most new cars today come with at least a three-year warranty and reasonable kilometre coverage, with some manufacturers, like Hyundai and Mitsubishi, now offering five-year warranties as standard.

Many manufacturers and insurance companies offer extended warranties that cover your new car after the statutory warranty expires. If you are considering purchasing an extended warranty, it is important to be aware of the potential pitfalls.

Your car dealer can earn a commission from each extended warranty they sign up, so they may try to persuade you to purchase on the spot, without giving you time to read the fine print. Many extended warranties have strict requirements, such as servicing the vehicle at specific intervals only at the dealership, and do not cover certain costly repairs. If an extended warranty is offered for ‘free’ or as part of the deal, you can probably expect many claim limitations.

It is a good idea to do some homework to find out what warranties are available for your new car, exactly what they cover, and what actions on your part could void the warranty. As with every step of the car-buying process, it is important to take a considered approach, weighing up the costs and benefits before agreeing to sign anything.

How many new car options should I choose?

There are lots of extra features you can choose to personalize your new car and make adjustments to suit your needs. For some drivers, options like a tow bar or fog lamps might be necessities. Others might want to add a little luxury to their new car with a 6-disc CD player or alloy wheels.

The key is to find out the cost of extras and decide how many you can afford as part of your overall maximum outlay. Prioritise the ones you need over the ones you want, and make up your mind before you walk into a dealership.

Whichever options you choose, it is important to factor these charges into your overall negotiation. While your car dealer would like you to buy options and accessories, ultimately their main concern is selling cars. If you start talking extras after you’ve agreed on the price of the car, you no longer have the leverage to negotiate on their cost.

If you focus your negotiations on the drive-away price of your car, including options, you will end up paying much less overall.

Should I haggle for my new car?

Before you start visiting your local car dealerships, it is worthwhile doing some research online to get a sense of how much the dealer would be likely to make on the sale. Once you take into account how much the dealer paid for the car, as well as any rebates offered to them by the manufacturer, you are likely to find that their starting retail price is somewhat inflated.

Car salespeople are under enormous pressure from dealerships and manufacturers to meet sales targets, so they will be looking to extract as much money from you as they can. For people who find the prospect of face-to-face negotiation daunting, there are lots of car brokering services in Australia that can do the haggling for you.

Those who are prepared to make the deal themselves should ask around and use the internet to find the best haggling tips. For instance, dealership delivery fees can vary considerably, so be aware of these costs and compare, and negotiate on a drive-away price.

Another handy tip is to start your serious bargaining in the last week of the month, when salespeople are under the most pressure to meet sales targets.

This year’s model or last year’s model?

When a new car model is released, dealers often scramble to get rid of older models by slashing prices. Buying a previous model year vehicle after the current year model is released can result in some considerable upfront savings.

It is important to keep in mind, though, that this decision could have a significant impact on the resale value of your car, which might offset your initial saving. Last year’s model is already a year or more old, so its resale value has well and truly started declining before you even buy it.

If you are considering buying a previous year’s model, it is a good idea to check the car’s date of manufacture. Cars carrying last year’s compliance plate are treated as last year’s models, even though they may have been built the year before. The manufacture date is more important when the car is eventually traded in, so you should ask the salesperson to show you the date stamped on the build plate.

Despite the decline in resale value, buying last year’s model may still be a good option for many. If you plan to keep your new car for more than six years, for instance, then depreciation will be less of a concern. Whichever way you go, the key is to make sure you understand the options and figure out your needs before you make any decisions.