Mark Hinchliffe wonders what car should young people buy? Simple question, complex answer.
TYPE OF CAR
First, the young buyer needs to recognize what they need in a car.
An apprentice may need a ute or wagon, a uni student probably only needs a light or small car, someone up country would probably be better off in a larger car or maybe even a sports utility vehicle if terrain requires it.
Don’t buy an SUV just because you want to go to Fraser Island once a year. Considering insurance, running costs and fuel, it would be cheaper to buy a small car and hire an SUV for the annual trip.
Exotic cars look great, but are more expensive to buy, fix and run. The more popular the car, the cheaper it will be.
NEW OR USED
Of course, used is cheaper, but is it better?
New cars offer the latest in safety options and they come with sometimes considerable warranties that even include roadside assistance, which can be pretty valuable for inexperienced drivers.
New cars lose about 25 % of their value the instant you drive them off the lot, but that is offset the longer you own the vehicle. And what price can you put on peace of mind?
SHOP AROUND
There are hundreds of car yards in your country. Go and browse around so you get a feel for prices and values.
You may also want to visit a car auction to see how it works and what prices cars go for.
Also research on the internet and in newspapers to compare prices.
WHERE TO BUY
Unless you are fortunate enough to know someone in the car dealer business, private sales will yield the lowest prices. However, there are problems with location, no guarantees, etc.
You could end up with a bomb that still owes thousands to a hire purchase company or could even be stolen.
Note the seller’s driver’s license details and cross-check with the registration details to see if they match.
The vehicle must have a current safety certificate that shows the car meets minimum legal requirements to drive. It could still be a lemon.
Car dealers can be safer, if more expensive.
Some car dealers now even offer warranties on used vehicles, plus they are strictly controlled by fair trading laws, there are cooling-off periods and you have the ability to complain to the Office of Fair Trading if it all goes pear-shaped.
Be aware that some used car warranties will cost extra and that there is already a free statutory warranty on all used cars.
It guarantees free repair of certain defects by the dealer or their nominated repairer, if the defects are found after you’ve bought the vehicle.
For cars less than 10 years old and an odometer reading under 160,000km, the warranty is three months or 5000km, otherwise, it’s one month or 1000km.
Brokers licensed under the Property Agents and Motor Dealers Act can get good prices and will do the legwork for you, but they also charge a commission.
Auctions can offer good deals, but are best left alone by young, inexperienced buyers.
They have no cooling-off period, usually no opportunity for a test drive, possibly no statutory warranty and limited opportunity to inspect the car.
If you want to try an auction, take along an adult who has bought at auction before.
Wherever you buy, take an experienced adult with you and insist on getting an RACQ inspection first. If they refuse, go elsewhere.
Under the Property Agents and Motor Dealers Act, you’re entitled to a “cooling off” period of one business day during which you can take the car for an independent inspection or a test drive.
Never buy online sight unseen, either privately or through a dealer.
HOW TO BUY
Young buyers are probably limited to cash or loan.
Cash can bargain you a good price. Loans can be as good as cash if you source it through a bank and front with the money.
Be wary of finance agreements with car yards or even seemingly independent finance companies. Read the fine print and find out how much the total cost will be at the end of the loan. It may surprise and alarm you. Don’t sign anything without adult supervision.
If you don’t want the car, you must advise the dealer in writing before the cooling-off period expires. The dealer can keep up to $99 of your deposit.
RUNNING COSTS
Buying the car is just the first step in a marathon of costs.
There is stamp duty, insurance, vehicle transfer cost, rego, fuel, repairs, tyres, oil and regular services. Your $11,000 budget might only buy you a $7500 car once you consider all the other costs.
Insurance costs can be saved by a number of factors: being part of your parents’ policy, making sure your driving record is good, participating in advanced driving courses, keeping your car in a locked garage, making no modifications to the vehicle and more.
Cars with bigger engines are not only fuel-hungry but cost more to register and insure.
Petrol-engined passenger cars made since 1986 run on unleaded fuel.
Cars built before then run on leaded fuel, which is no longer to avail. Some will run on regular unleaded, but others need expensive premium and might need a lead replacement additive each fill.
Young buyers should also consider an alternative-powered car such as a diesel or LPG model.
The RACQ website provides an annual survey on the running costs of cars which includes everything right down to depreciation and cost of replacement parts.
SAFETY
Safety should be the prime concern for young drivers who are two and a half times more likely to be involved in an accident.
RACQ executive manager for technical services Steve Spalding said older vehicles were cheaper, but lacked many of the modern safety devices such as air bags, sophisticated crash protection, anti-skid brakes and traction control of new cars.
SECURITY
Immobilizer and alarm systems may add to the cost of the car, but they also tries to reduce insurance premiums.
Most insurance companies will have vehicle theft ratings on their websites, which will also give a clue to premium costs.
Young women, in particular, should look for remote locking and auto locking features which increase personal safety, especially at night.
OTHER FEATURES
This will be up to you and your needs, but be realistic.
Is a good sound system more important than good tyres?
Don’t buy a car for its accessories. Make sure that the basic car is mechanically sound and rust-free before you worry about modifications.
And never allow a salesman or private seller to make an issue of the extra value in the accessories. There is no extra value in an accessory unless it is important to your needs, such as a roof rack to carry your ladder to work.
WHAT TO LOOK FOR
In a car yard, sight the motor dealer’s license which should be clearly displayed.
You have no protection under the law if the dealer is unlicensed.
Also ask to see the Register of Encumbered Vehicles (REVS) certificate to be sure there is no money owing on the car.
If buying privately or through a car yard, check that the vehicle has an up-to-date safety certificate and check the seller’s re-go and driver’s license.
SALES TIP
There is no pressure. There are thousands of cars out there and even the one you have your heart set on is not the only one available.
Take your time, don’t succumb to sales pressure and don’t buy the first thing you see.
BEFORE YOU SIGN
It might be a good deal, look good on the lot and have passed all inspections, but still take it for a test drive. Make sure it is insured first.
Read the contract.
There should also be a notice giving details about the second-hand car, the cooling-off period and the non-refundable deposit, particulars about the previous owner and a notice about the statutory warranty period.
Get a receipt for your deposit.
Don’t be tempted or forced to take possession of the car on the day you sign the contract because you will lose your cooling-off rights. You can take the car for a test drive or an independent mechanical inspection though.
In a private deal, draw up a basic contract including purchase price and date, Vehicle Identification Number and owner’s details (license, rego etc). You’ll also need to organise a registration transfer.
Pay by bank cheque which gives you evidence of payment.
Even with a contract, there is little protection with a private sale.
DONE DEAL
OK, you bought the car. Before leaving the car yard, make sure you have a form stating details about the vehicle including odometer reading and the guarantee of clear title.
When you get home, read the warranty terms and conditions, and read the car’s user’s manual. If there are problems, just take back the vehicle immediately.
If you have further problems, go to the Office of Fair Trading or apply to the Small Claims Tribunal.
The Office of Fair Trading decides minor claims up to $5000.
Claims over $5001 will be referred to the Property Agents and Motor Dealers Tribunal for a decision.
(Information provided by RACQ, NRMA Insurance, AAMI, Office of Fair Trading, carsguide.com.au)