Deciding to buy a car is a big step in life. If you have decided to get yourself a new ride (or your first ride), then, congratulations! Now, you must be very excited about owning a cool looking vehicle, smelling that fresh car smell, and hearing the hum of your new engine and chassis. There is nothing quite like the experience of riding in your first car. However, before you fantasise about all the fun you’re going to have with your new vehicle, keep in mind that you have to go through a lengthy car buying process.
So before you impulse buy yourself a new metal steed, take a deep breath and do your research. Your excitement might die down as you are presented with a mountain of paperwork, line and dealer tricks.
The Car Buying Process in 8 Steps
There are some great months for buying a new car like June, during the end of the financial year, or December, for the end of the year sales. However, if you want to get a great deal all-year-round, here are the things you need to do:
- Do your research
- Check the features
- Check the fuel consumption
- Research about trade-in and private sale
- Test drive the car
- Check if the price is right
- Be mindful of the compliance plate trap
- Check the details and extras
- Manage your finance
- Seal the deal
That is pretty much the summary of what you need to do, but if you need more details on each step, then read on.
1. Do your research
Start by thinking of what make and model you want for your car. You should care about more than just how it looks. Make sure that the car you buy suits your needs.
2. Check the features
Every car has its own advantages and disadvantages. One of the most important things to check is a car’s safety features. Look for information about the safety of new cars in the event of a crash.
Look at how a car did on a frontal-offset, side-impact, pole, pedestrian and whiplash tests. These are all part of the extensive and internationally recognised testing regime.
What else should you check in relation to a car’s features?
- You should check the potential resale value. If your car has excellent safety features and it is fuel-efficient, then it should still land a good price for resale.
- You should check for car insurance costs. Keep in mind that some additional accessories or features are not covered by standard insurance unless you indicate it.
- You should check the warranty. This may not be an actual feature that makes your car look good or helps it perform better, but it is something good to have in case you run into some problems with the performance of your car.
- You should determine the model cycle. The life cycle for car models differs from one manufacturer to another. But, usually, it takes two years to push out minor updates and four to five years for major updates.
3. Check the fuel consumption
Another factor to check before buying a car is its fuel consumption and efficiency. Usually, the fuel consumption of a car is on a yellow label displayed on the windshield. It typically has an energy icon or label that is similar to the one you see on big pieces of appliance like a washing machine. The label should indicate a car’s fuel consumption in litres per 100km and its carbon dioxide emissions. Generally, the lower the numbers, the better it is.
4. Research about trade-in and private sale
Now, if you currently have a car, you have other options apart from buying and selling your current vehicle. You also have the option to trade it in. Here are the things you need to think about when making a decision regarding this matter:
- A trade-in has less paperwork than selling your car. It is convenient and straightforward in that sense.
- If your current car is in demand, then there are better chances of making an excellent trade-in deal.
- Keep in mind that having your service records and receipts can help in securing a better trade-in deal.
- You need to present your car in a clean and tidy condition, whether you want to sell it or trade it in.
- You can get more money by selling your car privately compared to accepting a trade-in deal.
- Selling your car privately may take more time than just trading it in.
5. Test drive the car
Now that you are done researching the kind of car you want to get, it is time to start visiting dealers for test drives. If you are doing this on your own, then it is part of the car buying process to set aside some time for testing the car of your choice from one dealer to another. You can get yourself a car broker if you want to skip these steps. Here are some tips for test drives:
- Try to use a route of your choice instead of one chosen by the dealer.
- Do not rush, take as many times as you need. Drive in different kinds of road and traffic conditions.
- Check if the demo car has the same specifications as the car you want to buy.
- It helps to have a friend during test drives. They have a different perspective, therefore, a different opinion about the car.
6. Check if the price is right
Do not say yes to the first offer that you get. Keep the following tips in mind:
- You should at least have three dealership quotes to compare.
- Do not get pressured by the dealers. Even when they say that the deal is only good for that day, resist with all your might.
- When you receive the quote from a dealership, make sure that they give you an all-inclusive, drive-away price that includes dealer fees, stamp duty, registration, and so on.
7. Be mindful of the compliance plate trap
Pay attention to the car’s compliance plate as it may not be the same as the build plate. This is usually the case for cars manufactured overseas. The compliance plate only states when the car was approved for sale in Australia, not the build date. For instance, a car may have a May 2015 compliance plate even if it was built in early 2013. Meaning to say, the car is not actually a 2015 model but a 2013 model. Not knowing this detail may lead you to buy a 2013 model for a 2015 model price.
8. Check the details and extras
Dealers will always try to upsell. Once you have agreed to buy a car, they will offer you other things like floor mats, window tints, leather seats, fabric protection, rust proofing or paint protection. When you are in the zone for buying things, you might end up caving in. While most of these extra accessories may be worth your while, it might actually be better to buy them on a later date rather than buying it on the spot.
Take note of the extras that need to be factory fitted to be covered by the dealer warranty. For example, maybe you should skip rust-proofing because the car will already be rust-protected and problems will be covered by warranty, or paint protection, which is also covered by warranty. If you do need some fabric protection, you can do it yourself by buying a can of fabric protector from the supermarket.
You know what else you need to look out for? Extended warranties. This may sound like a great idea, but did you know that car dealers can get a huge commission of more than 50% of your premium for selling them. It may also be troublesome to make claims on them if something happens.
9. Manage your finance
You need to pay for the car and you know that you are not going to be able to do it in one go. Aside from shopping around for cars and the best deals, you should also shop around for car loans from different lenders. Different lenders have different offers. You can save a lot of money by shopping around for the right loan as some loans are more suitable for your needs than the others.
10. Seal the deal
Finally, seal the deal. Not much can be said about this step. Once you have checked and driven the car, you will know for sure if it’s what you want. Here are some extra things that you can check:
- Make sure that you are leaving with the right model and the right features.
- Do not sign anything until you are completely satisfied.
- Make sure that all the items are filled out on the forms.
- Be careful of placing a deposit unless you have a 100% guarantee it is fully refundable should the deal fall through.
- Last but not least, get insurance for your car.
The Final Takeaway
Car buying is never a simple process. If you have the time and patience for it, you can work on this on your own. But if you want to avoid all the hassle, you can hire a car broker to work on all the nooks and crannies for you. Once you have your sweet ride, you will know that everything that you have so far is worth it.