So, the moment has finally arrived! You have saved enough (or if you were lucky had a little help from your family) to buy your first car. Congratulations!
It’s an exciting time but regardless of how well-prepared you are, buying your first car can bring a certain level of uncertainty. To help reduce this, here’s a series of tips to help with what is often one of the first big ‘adult decisions’ of your life.
What do you want?
There are several brands of car available in New Zealand and each of them has their own unique features. Firstly, decide what type or brand of car you want. Is it a brand you trust? What do you know about their track record for producing safe and reliable cars?
Are you looking for a car that makes a fashion statement or a functional vehicle without the bells and whistles? Remember that your first car will likely need to be reliable and affordable – not something that will cost a fortune to maintain.
What shape do you want; station wagon, hatchback, coupe or sedan? Try and keep it practical and think about where you will be doing most of your driving. Just because you want to head down to the mountain once a year doesn’t necessarily mean you need a 4-wheel drive station wagon! Size matters and as a rule of thumb, the larger the car the more expensive it’s likely to be to run and maintain. Perhaps a small hatchback may actually be the right move?
Unfortunately, according to statistics from NZTA you are most likely to have a crash during your first 6-12 months of driving. So, make sure you consider safety; does the car have driver side airbags, side-impact bars? You can check out the number of ANCAP stars, the more stars the safer the car.
What is your budget?
It goes without saying that the more exotic the car, the more expensive it will be. However, budgeting for your first car goes beyond how much you are willing to pay for the car itself. It also involves how much you are willing to spend on insurance, repairs, and maintenance. Classy, exotic or late model cars typically cost more in all these areas, so you need to plan your budget with that in mind.
Think about whether you’ll need to make a deposit. If you are buying from a dealer you will likely need to make a down payment to secure the sale. If you are going down this route, try and save at least 10% of the value of the car you intend to buy. While you may be able to get a ‘no deposit’ deal, this will often incur a higher interest rate.
It’s also worth bearing in mind the resale value of your car. Many vehicles hold their value a lot better than other cars. Factors that influence are likely to be the same as the ones you use when making your decision; the reliability of the brand, the demand for the brand and of course the condition of the car itself.
Do your research
Roaming the web has made car research much simpler. Make a folder and save bookmarks of the cars you like to compare. Sites like TradeMe and AutoTrader have thousands of cars listed online that can be used as reference points, even if you intend to buy from a dealer.
Car dealers can themselves can be a wealth of information, they are familiar with offering advice to first-time car buyers. Be wary though, a lot of that advice may be influenced by the possibility of a sale and the associated commission.
Talk to family and friends, it’s not unusual to have a family friend or mechanic who knows a little about cars. By all means listen to their advice, but make sure to cross-reference this with your own research.
While you don’t want to act on your first impulse, there will come a time when you need to finally make a decision. Too much information and research can lead to ‘analysis paralysis’. At that point don’t second guess yourself too much.
The ‘Once Over’
If you like a car make sure give it a good ‘once over’, and trust your instincts. This is not a full pre-purchase inspection but will help you decide if you want to invest further time and research and possibly money into checking the car.
Check for rust, discolored paint that may be hiding damage from an accident, check the suspension by pressing down hard on each corner of the car (if it bounces more than once it can be a sign that you need to get the suspension checked). Check under the hood that the oil level is normal and that the radiator fluid isn’t a rusty color. Take a look at the battery and make sure that the diodes aren’t encrusted. Find out when the cambelt was last replaced. If it’s going to need replacing it can be expensive.
Check the mileage. At 300,000 kms the car will be worn out and tired and more likely to cost more each year to keep roadworthy. If you can try and pick up a car with fewer than 150,000 kms on the clock.
If you spot anything that doesn’t look good or it just doesn’t ‘feel right’ don’t be afraid to walk away. There are plenty of other options out there.
Test-Drive the car
So far, you’ve decided on a brand and know your budget. Fortunately in New Zealand – as with almost everywhere else – car dealers tend to be located in the same general area. This means you can book multiple test-drives at different dealerships, so you can compare similar vehicles back to back.
A good idea is to take the car for an open road test-drive. This way, you can find out how the car performs. This is often more to get a feel for whether you like driving the car and to spot obvious problems rather than identify any mechanical problems.
It goes without saying that unless a member of your family is a mechanic, you should check it has a recent Warrant of Fitness (WOF). A WOF is a regular check that shows the car meets every safety requirement. It’s recommended that your car has a WOF that has been granted within 30 days or less, although you can still opt for a car that has an older one or even none at all, the seller has to state this clearly before completing the transaction. The WOF will cover details such as the condition of the tires, lights, brake system, safety features and general roadworthiness of the car. More information on WOF can be found at the New Zealand Transport Agency Website.
The pre-purchase inspection
If you don’t know a lot about cars a pre-purchase inspection is a very good idea. The AA offers a pre-purchase inspection for a fee of between $149 (members) and $169 (non-members). The inspection will include several elements that are not covered in a WOF check. It may be tempting to try and save all your money for the car itself, but an AA check can save you a lot of money and avoid a lot of heartache in the long run. Learn more about pre-purchase inspections at the AA.
Deal with the paperwork
This is one of the most important processes when buying your first car. After you’ve made a decision and agreed on a price, the next step is to complete the paperwork. Will you be making an initial deposit to secure your car, or, can you afford to pay the complete amount upfront?
You’ll need to complete an MR13C form, stating details of the car and seller. You might also need to fill in a MR13B (or Notice by Person Acquiring Motor Vehicle form). This would require your New Zealand’s Driver’s license and a passport photograph. You’ll also need to sign the purchase agreement, which contains all the information about the car. If you’re buying a second-hand car, the change of ownership can be registered on the NZTA website.
Before you hit the road, it’s important to get your car insured. It wouldn’t do to have your new car damaged in an accident, vandalized or stolen without insurance to fall back on. There is a range of insurance options, from the most basic that covers you for liability when you’re involved in a crash (that affects someone else), to one that includes fire and theft, or a policy that offers more comprehensive cover. Check out State Car Insurance for a quote and more details.
What else to know
Your first car should be able to meet the ANCAP safety requirements. Nowadays, it’s unusual to find anybody buying a car without modern safety features, such as ABS and airbags. However, these features don’t necessarily mean your new car will meet the required ANCAP safety rating.
There are various budget cars that have good safety ratings, from three stars to high performance five stars. For instance, a Toyota Yaris 2005 to 2011 has a three-star rating. Meanwhile, the Honda Civic 2006, Honda Accord Euro 2003, Volkswagen Golf 2004 and 2007 Subaru Impreza are used cars that fall under the three to five-star rating spectrum.
If you are buying a used car privately, it will be a good idea to look up the history of the car before completing the deal to check that the previous owner has no outstanding payments on the car. A history check will also show if the car has had any legal issues or any previous complications which will affect your insurance and driving record.