Where is the best place to buy a car?
Should you get your next set of wheels online, from a dealer, at an auction or through a private sale? Find out here.
Key takeaways
- Compare all car buying options - dealerships, private sales, auctions, online and demo models - so you can match the process to your budget and lifestyle.
- Always inspect any used vehicle carefully and run a history check to protect yourself from hidden debt or mechanical issues.
- Factor in financing - interest rates, fees and charges can make as much difference to affordability as the purchase price itself.
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.
Quick comparison of places to buy a car
| Dealership | Online | Private sale | Auction | Demonstrator vehicle | |
|---|---|---|---|---|---|
| Cost | More expensive | Potentially cheap – freedom to negotiate | Potentially cheap – freedom to negotiate | Cheap | Cheaper than standard new car |
| Speed of purchase | Depends how much you shop around | Can be time-consuming | Can be time-consuming | Very fast | Fast |
| New cars available | Yes | Yes | No | No | No |
| Used cars available | Yes | Yes | Yes | Yes | Yes |
| Test drives | Yes | Yes | Yes | No | Yes |
| Ease of purchase | Easy | Varies – depends on the seller | Varies – depends on the seller | Easy | Easy |
Find out more about each place of purchase
New car dealership Used car dealership Online Private sale Auction Demonstrator vehicles
Buying a new car from a dealership
If you're chasing that shiny new-car smell, your first stop will likely be the local dealership. Every major brand has one scattered across Australia, so it's just a matter of turning up and booking some test drives.
The big drawcard of buying new is peace of mind. New cars are mechanically sound, come with a clean history and are far less likely to break down. No dodgy service records, no past damage, no hidden finance.
Of course, peace of mind comes at a price. You'll pay more than you would for a used car, but you'll get the latest features, a warranty and the exact options you want.
The catch? Dealing with sales staff. Car salespeople don't exactly enjoy a reputation for honesty, so expect a few hard sells and questionable tactics every time you step into a showroom.
- 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
For many buyers, the first stop is online. You can browse thousands of new and used cars without leaving the lounge, making it an easy way to compare options and prices.
The biggest perk of buying a car online is convenience. You avoid sales pressure and can narrow down your shortlist before heading out for inspections and test drives.
The catch? Listings don't always match reality. Some sellers may be less than trustworthy, so protect yourself with a pre-purchase inspection, a history check and by confirming there's no finance owing.
- 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 buy, keep these tips in mind to make sure you get the right vehicle at the right price:
- Compare your options. Don't just look at the sticker price. Compare fuel efficiency, servicing costs, warranty terms and resale value as well as features and inclusions. Small differences up front can add up to thousands over the life of the car.
- Get an independent inspection. If you're buying used, a qualified mechanic can spot hidden problems like engine wear, flood or accident damage or odometer tampering. An inspection may cost a few hundred dollars but could save you from a very expensive mistake.
- Check the paperwork. Always check the car's history report, confirm the VIN and make sure there's no finance owing on the vehicle. If you're buying from a dealer, read every clause in the contract and ask questions about fees or conditions that aren't clear.
- Know your budget. Factor in more than the purchase price. Stamp duty, insurance, rego and ongoing running costs can all stretch your budget if you don't plan ahead.
- Don't rush. Cars are a big financial commitment. Take your time to compare, test drive more than one option and walk away if something feels off.
If you're prepared to research and shop around, you'll be in a much stronger position to find a car that's reliable, good value and right for your needs.
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How we picked theseFinder Score for car loans
To make comparing car loans even easier we came up with the Finder Score. Interest rates, fees and features across 200+ car loan products and 100+ lenders are all weighted and scaled to produce a score out of 10. The higher the score, the more competitive the product.
Compare other products
We currently don't have that product, but here are others to consider:
How we picked theseFinder Score for car loans
To make comparing car loans even easier we came up with the Finder Score. Interest rates, fees and features across 200+ car loan products and 100+ lenders are all weighted and scaled to produce a score out of 10. The higher the score, the more competitive the product.
Frequently Asked Questions
Sources
NSW Fair trading, https://www.fairtrading.nsw.gov.au/cars-and-other-vehicles
Personal Property Securities Register, https://www.ppsr.gov.au/
Picture: Shutterstock
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