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Buying a car is an important financial decision and one that you need to get right. Whether you’re looking for a luxury vehicle or just a cheap drive to get you from A to B, it’s vital that you shop around for the best possible deal.
But should you buy from a dealer, buy at auction, shop for cars online or find a private seller another way? Let’s compare all the options to help you find the best place to buy a car.
If you want a shiny new set of wheels with that “new car” smell, you’ll most likely start visiting local car dealerships. You can find dealerships for all major brands in cities, regional centres and towns right around Australia – it’s just a matter of visiting your top choices to start test-driving models.
The biggest advantage of buying new is that you get peace of mind. New cars are much more mechanically sound than used cars and far less likely to break down. They also have a clean and unblemished history, so you don’t need to worry about servicing records, previous body damage or any outstanding finance from the previous owner.
Unfortunately, buying a new car from a dealership also means paying a premium price. You can get a car with all the latest features, a new-car warranty and any options you desire, but you’re always going to pay more than you would for a used vehicle.
Finally, buying face-to-face means dealing with sales staff. Car salespeople may not have the best reputation for honesty or integrity, so keep an eye out for the dodgy sales tactics some dealers use to prey on unwitting customers. You will also need to deal with the pressure of sales pitches at every dealership you visit.
Peace of mind. New cars are much more mechanically reliable than used cars and you don’t have to worry about their servicing or repair history.
New-car warranty. New cars purchased from dealerships come with the manufacturer’s new car warranty, which can provide financial protection against any mechanical problems for several years.
Latest features and options. New cars have better fuel economy, improved safety ratings and all the latest tech features. You also have the freedom to select any extra-cost options you want.
Trade-ins. You can trade in your old vehicle when you buy your new one.
Pressure to buy. You may have to deal with pushy salespeople and questionable sales tactics.
Expensive. Buying a new car from a dealership can leave a dent in your hip pocket.
Buying a used car from a dealership
A used car may not have the same level of glamour and excitement as a new vehicle, but buying used does allow you to save thousands of dollars. There are also plenty of well maintained used cars that have been regularly serviced and treated with the utmost care throughout their lives, so it’s certainly possible to find excellent value for money.
The trouble is that not all used cars have led trouble-free lives. Mechanical problems, poor servicing history and questionable repairs following previous accidents are just a few of the potential problems lurking just beneath the surface. Dealing with used car salespeople, who have a well-established reputation for dodgy sales tactics and questionable ethics, is another drawback.
Cheaper. It’s much more affordable to buy a used car than it is to buy new.
Plenty of choice. There’s a huge range of choice available to help you find the right make and model.
Warranty. Dealer-sold passenger cars that are less than 10 years old and have done less than 160,000km come with a 3-month/5,000km used car statutory warranty.
Dodgy dealers. Used car salespeople aren’t always trustworthy.
Your car could come with baggage. From a poor servicing history to shoddy repairs following a previous accident, there may be more to your used car than meets the eye.
Older vehicles. Used cars usually can’t boast all the modern features of a new vehicle.
Buying a car online
The first port of call for many people looking to buy a car is online. Through websites like carsales.com.au, carsguide.com.au and gumtree.com.au you can browse thousands of new and used vehicles from private sellers and car dealerships.
The biggest advantage of buying a car online is that it’s extremely convenient – you can compare a wide range of vehicles and prices without having to get off the couch and without feeling pressured to buy. Of course, you’ll still need to visit the seller to inspect the car and take a test drive, but shopping online can remove a lot of the legwork and hassle of comparing your options.
However, one of the problems with online is that the ad you see posted may not match the car for sale when you turn up to inspect it. There’s also no way of knowing whether private sellers that list their cars online are trustworthy and above board, so it’s important to get a pre-purchase inspection, check the car’s history and make sure there is no finance owing on it.
Convenient. Online car sales websites can help you compare an extensive range of makes and models without leaving your house.
Wide range of vehicles. You can compare the prices and features of thousands of new and used vehicles from private and commercial sellers all over Australia.
No pressure to buy. When you browse cars online, you don’t have to deal with the inconvenience and hassle of fending off sales pitches from dealers.
Competitive prices. The online car sales marketplace is very competitive and the wide range of vehicles available means you can shop around for a good deal.
False listings. You can’t always trust the photos and details included in online car sales ads.
You don’t know who you’re dealing with. There are always risks involved when buying from private sellers, so it’s important to get the car inspected and make sure it is not encumbered by finance.
Private sale
Not all private car sales take place online; you could see a car advertised in the classifieds section of your local paper, or maybe just marked on the side of the road with a “For Sale” sign on the windscreen.
Buying privately potentially allows you to score a great deal. When you find a mechanically sound car with all the features you want, you can haggle all you want with the seller and try to negotiate the best possible price.
However, you will need to watch out for several traps and pitfalls. There is no cooling-off period when you buy privately, and a clear title is not guaranteed. You could potentially be buying a stolen car and you also won’t get a warranty, so you must do your research and get an independent inspection before you buy.
Potential savings. You may be able to find the car you want at a bargain price.
Freedom to negotiate. You can haggle with the seller to try to lock in a better price.
Don’t have to deal with dealers. Private sellers usually won’t apply the same pressure to buy as car dealers.
No cooling-off period. There is no cooling-off period if you change your mind and want to back out of the deal.
No statutory warranty. You don’t get a used car statutory warranty when you buy from a private seller.
Past problems. It’s important to be sure that the vehicle you buy actually belongs to the person selling it and doesn’t have any faults, mechanical problems or unpaid debt attached to it.
Buying at auction
Buying a car at auction is the quickest method available and can let you enjoy significant savings compared to buying from a dealer. Although auctions are generally targeted more at the trade than at private buyers, you can find a great deal if you know what you’re looking for.
You will typically get to inspect a vehicle before bidding but test drives are not available. Some cars come with a statutory warranty and others will not – the auctioneer will announce this before bidding begins – and there is no cooling-off period.
With this in mind, it’s important to do your research ahead of time and keep a cool head when bidding starts.
Cheap prices. You may be able to secure the car you want at a bargain price.
Inspection. You are usually able to inspect the vehicle before bidding begins.
Fast. This is one of the quickest ways to buy a car.
No test drive. You are usually not allowed to test drive a vehicle before bidding.
Can get caught up in excitement. It’s easy to get caught up in the excitement and emotion of an auction and pay more than you want.
No cooling-off period. There is no chance to back out of the purchase if you change your mind.
Buying a demonstrator vehicle
One final option worth considering is buying a demonstrator vehicle. Demonstrator models are usually vehicles that have been used as test-drive cars, but they can also be vehicles used by dealership employees or even used as loan cars.
Because demo vehicles are no longer new, you can enjoy substantial savings compared to the cost of a new vehicle. As they’re often used to show off the best a particular model has to offer, they commonly include a range of top-of-the-line features and extras.
However, just remember that you’re not buying a completely new vehicle, so you should make sure you’re fully aware of the car’s history before you buy.
Big savings. You can save several thousands of dollars if you buy a demonstrator model instead of a new vehicle.
Extras and options. Demo cars often feature a range of additional features and options.
Value for money. Well-looked-after demo models can provide great value for money.
Used car. You’re effectively buying a used vehicle, which means you may not enjoy the same peace of mind that comes with a new car.
History can vary. Make sure you’re aware exactly how the demo model has been used before you buy.
Top tips when buying a car
No matter where you choose to buy a car, keep the following tips in mind to help you find the right vehicle at the right price:
Compare your options. Compare features, inclusions and prices across a wide range of vehicles. Shopping around will help you find the best value for money.
Get an independent inspection. If you’re buying a used car, always get it inspected by a qualified mechanic. This will turn up any mechanical issues and can help you decide whether it’s the right car for you.
Read the contract closely. Always read any contract closely before signing it so you know exactly what you’re getting.
If you’re willing to do your research and shop around, you’ll be able to find a reliable car with all the right features, and without breaking the bank.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Elizabeth Barry is the lead editor for Finder. She has over 10 years' experience writing about a range of topics with a focus on personal finance. You’ll find her writing and commentary in a range of publications and media including Seven News, the ABC, MSN, the Irish Times and Singapore Business Review.
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