Buying a New Car
If you’ve chosen the car you want and researched it thoroughly,
you’re ready to start visiting dealerships.
Get written quotes from several dealerships in your area,
leaving the one nearest you until last - some manufacturers offer
financial incentives to dealers on any sales they make to locals,
so they’ll try extra hard to secure your business.
Act confident and calm in your dealings with salespeople – even
if you don’t feel it – and make it clear that you’ve done the
preparation and know what you’re talking about.
Make all the important decisions before you go, including your
price limit, any options you want, and how you plan to insure and
finance your car.
Test driving
First, make sure you understand what your legal liability will
be if you have an accident on your test drive. Focus on the
comfort, handling and power of the car.
A good test drive lasts about 20 minutes, over at least 10km,
including some rough roads, bends, highways and stop-start driving.
Do a U-turn and parallel park to test the car’s steering and
visibility.
Remember to stay composed – the dealer might decide they can
boost the price if they see you get excited.
Should I haggle?
The simple answer is yes. Salespeople are trained to extract as
much money from you as possible, so the first price they give you
will invariably be inflated. If you’re nervous about haggling, take
an experienced friend or make room in your budget to engage a car
brokering service to do the job for you.
If you’re going to do the deal yourself, use the internet to
find out the car’s invoice price so you know exactly what the
dealer paid for it and how much profit they stand to make.
Focus your negotiations on the ‘drive away’ price – the total
amount you pay, including all extra charges – so you don’t get any
nasty surprises.
A handy tip: salespeople will be under the most pressure to meet
their targets in the last week of the month, so this is a good time
to do your serious negotiating.
This year’s model or last year’s?
Buying last year’s model at a discounted price after the current
year model is released can be a good way to save money.
Keep in mind that this decision will impact the resale value of
your car, so the discount offered to you should be significant
enough account for this. If you think you’ll be upgrading your car
pretty quickly, it’s probably not worth it.
If you plan on owning the car for around six years or more,
depreciation will be less of a concern, so an older, discounted
model might be a good option for you.
What options should I choose?
Options are extra features that don’t come as standard with the
car. Certain options – like a tow bar or fog lamps – may be
necessities for some drivers, while others will add a little
luxury, such as alloy wheels or navigation systems.
Prioritise your needs over you wants here, find out the costs
and factor them in to your overall budget. You should make firm
decisions before you get to the dealer, and include the price of
options in your overall negotiations.
Should I buy an extended warranty?
Most cars now come with a standard three-year warranty and
satisfactory kilometre coverage.
You can choose to buy an extended warranty from most
manufacturers and insurance companies, which will cover you after
the standard warranty expires. Your dealer is likely to offer to
organise one for you, but be wary – always read the fine print.
Extended warranties – particularly those offered by dealers – can
have strict requirements and claim limitations.
Take the time to weigh up the costs and benefits, and if you do
decide to extend your cover, include the cost when negotiating the
‘drive away’ price.
What extra charges can I expect?
The advertised price of your car is unlikely to include certain
extra expenses, like stamp duty, registration and number plate
fees. These charges are compulsory, so you need to make room for
them in your budget.
Another extra expense you can expect is the dealer delivery fee,
which is the amount charged by the dealership to prepare and
deliver your new car. You might find there’s some wiggle room here,
so include this when negotiating the overall price.
The dealer will probably offer other extras, like rust-proofing
and paint protection. Don’t bother with these – they’ll probably be
overpriced and most new cars don’t need them.
What paperwork should I bring?
All you really need to bring is your driver’s licence and a way
to pay for the car.
If you want to show you’re really serious, it’s a good idea to
bring some evidence of your research with you, including purchase
quotes from the internet and other dealers (for both the car and
for any options or extras you’ve chosen), as well as invoice price
figures.
What will I have to sign?
Once you’re ready to go ahead with the purchase, you will be
asked to sign an ‘agreement for sale’ document. This is a legally
binding contract, so read it very carefully before you sign!
Check that all costs (including extras and fees) are clearly
itemised, and that there are no blank spaces anywhere in the
document. The car colour and accessories you’ve chosen should be
recorded, as should the car’s delivery date.
When should I arrange insurance?
You are responsible for your new car from the moment you
complete your purchase and drive away, so you should sort out
insurance before the sale is finalized.
Most insurance companies will offer temporary insurance (often
called a ‘cover note) to protect you while you arrange permanent
cover.
Compliance and build dates
Before you accept ownership of your car, check the build and
compliance dates (these can be found on plates fitted to the
vehicle.) The build date indicates when the car was manufactured;
the compliance date shows when it cleared customs.
While the compliance date legally determines the car’s model
year, the build date is the important one when it comes time to
sell. A car advertised as this year’s model may already be a year
old according to the date of manufacture – the extra year will have
an impact on its resale value.
If you’re looking to buy the current year model, don’t accept a
car with a build date from last year unless you’re financially
compensated.
