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Question: I'm in the process of buying my first car and it doesn’t seem to be happening fast enough for me! I have money put aside for the car itself, but am finding it difficult to find a car that's 'the one', and in a good condition for my price range. Also I was wondering what else I need to cover financially, such as insurance, registration fees etc. Can you help by summing it all up for me? Ashleigh
Buying a car, especially for the first time can be a daunting experience, as the letter above testifies. No doubt many of you are in the same boat as Ashleigh, so we’ve put together a bumper guide to purchasing a car…
Step One: Research As with most things, preparation is the key. You need to research:
a) Your finances Make up a list of money you actually have and then explore how much you can get from other avenues. Because a car is a depreciating asset i.e. from the moment you buy it, its value generally decreases, a loan for a car, particularly a big loan is not the best form of investment. So try and scrape together as much cash as possible before venturing out to borrow some. Banks offer overdrafts and personal loans - it's worth shopping around to find out what works for your situation. If you're buying through a dealer, they usually offer some form of finance but more often than not it is advisable to investigate through your bank. These loans are generally secured against your car - so if you don't meet repayments, they can repossess your car.
Remember also that you don't just need to factor in the cost of the car BUT also:
Upcoming WOF and Rego
Pre-purchase checks
Insurance
Running costs, Petrol etc
If buying second-hand, any potential servicing needed.
b) The most suitable car for your needs We'd all love a new Porsche, but quite frankly this isn't always practical. Ask yourself the following questions:
Will you buy new or second-hand?
What will you be using the car for? Long distance or just zipping around town?
How many passengers do you anticipate carrying? Do you regularly carry bulky items, like a surfboard?
How much petrol is the car going to be using? Sure a V8 sounds fantastic, but can you afford all the petrol it will guzzle? www.consumer.org.nz has some really good information about fuel economy and reliability.
How safe is the car? The AA has some good data collated about different models and how well they fare in crash-testing. Definitely worth a look!
How important is image?
All of these questions are important and they should hopefully point you in the direction of a few models which you can then begin hunting for. Make a shortlist of makes, models, years, engine sizes, auto or manual, colours and add your price range to the list. Be aware, especially if you're under 25 and haven't been driving for all that long that insurance companies are pickier about their policies and the cars that they'll insure you for at a reasonable price. Any car that has a bit of a boy-racer reputation, has the word turbo anywhere or has modifications is just about guaranteed to have a larger premium.
Step Two: The Search You've narrowed your choices down to a shortlist of say five different cars and have set your price limits - now it's finally time to start looking! There is a huge selection of places set up to help you find your car.
a) Buying new Try the phone book, newspaper or motoring websites for names of dealers or ask around for recommended dealers.
Try your local carfair www.carfair.co.nz (hint, get there super early in order to get the best bargains)
Auctions are also good places to pick up an imported vehicle. Quite a few dealers recommended this option to me - the Asian cars often come with bells and whistles that the NZ made cars don't have as standard options and because generally, the cars were driven less over there, there will be less kilometres on the clock. Try www.turnersauctions.co.nz
It can also be worth investigating dealers as well, because they want to get rid of trade-in models at cheaper prices. Remember to check that they are registered here
The advantage of buying from a dealer is that you have rights under the Consumer Guarantees Act and the Fair Trading Act which mean that you can't be misled about the nature of the vehicle and it must be in a reasonable condition when you purchase it.
Once you start searching it can get a bit overwhelming. To help you keep track of all those different options make a grid to gather details down about each car. Have columns for the make/mode/year/doors, hatch/sedan/wagon, contact numbers and location, asking price, auto/manual, colour, kms, engine size, when the WOF and Reg are due, any extras such as AC/PS/ alarm/stereo etc and previous problems.
Step Three: Purchasing After all of that you've finally found the car of your dreams. An old nana who has used it to get to bowls, had it regularly serviced and kept it in her garage is selling it at a reasonable price - what now?
a) Pre-Purchase Get it checked out! Clarify with the seller that it's ok to get the following things done (if they are hesitant, be suspicious of what they are hiding). All of these services are totally optional, but HIGHLY recommended if you're purchasing second-hand!
Before doing anything, it's a good idea to get a VIR check. One in three vehicles checked has a registered issue of concern. It costs $25 for a 42 point check which picks up whether the vehicle has any police interest, if there's any money owing on it, ownership history, registration details, flood damage etc.
If this all checks out then it's worth getting a mechanical check of some sort done. If like me, you have pretty much no idea what's what in a car then you may need some form of help. This can be in form of a friend who has some idea and can do the check with you - take along a checklist such as the one from the Consumer website to ensure you don't miss something.
However, I would recommend spending the money (generally about $100) to get a trained professional to do it for you. The AA offer this service, as do Car Inspection Services who I recommend. The mechanics either come to you, or you bring the car to them and spend about an hour thoroughly going over the car and produce a report of any damage they find. Money well spent - I was about to purchase a Corolla that seemed to be in mint condition, but only on a compression check was it discovered that major engine work would have been necessary.
b) Buying the car Congratulations are in order when you make it to this stage! If everything has checked out and you're about to make the sale, there are a few more steps before the car is yours. You need to:
Get the vehicle's Certificate of Registration from the seller.
Fill in the change of ownership form (MR13 or MR13B) and hand it in to an LTSA agent (for $9.20) within seven days of buying the vehicle. You'll need to know your full name, date of birth, residential and postal address and proof of this in the form of your Drivers License (or other ID).
Get a 'change of ownership card' from the LTSA to prove to the seller that you've advised LTSA of the change.
c) Insurance Insurance may seem a bit of a nuisance, but in reality it's more of a necessary evil. Most companies offer three levels of cover from third party, third party fire and theft through to a comprehensive option. As with everything, it's worth shopping around because while the smaller policies don't have much difference in price, for my situation comprehensive cover ranged from $750 up to $2900. If you already have insurance somewhere and have a good history, you may register for discounts.
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Buying a car, especially for the first time can be a daunting experience, as the letter above testifies. No doubt many of you are in the same boat as Ashleigh, so we’ve put together a bumper guide to purchasing a car…
You've narrowed your choices down to a shortlist of say five different cars and have set your price limits - now it's finally time to start looking! There is a huge selection of places set up to help you find your car.
After all of that you've finally found the car of your dreams. An old nana who has used it to get to bowls, had it regularly serviced and kept it in her garage is selling it at a reasonable price - what now?
Insurance may seem a bit of a nuisance, but in reality it's more of a necessary evil. Most companies offer three levels of cover from third party, third party fire and theft through to a comprehensive option. As with everything, it's worth shopping around because while the smaller policies don't have much difference in price, for my situation comprehensive cover ranged from $750 up to $2900. If you already have insurance somewhere and have a good history, you may register for discounts.