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Brad Leach - 12/12/09
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.
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.
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.
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
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.
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
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
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
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.
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
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.
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.
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
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.
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
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.