All You Need To Know When Buying Your Next Car

When I was growing up I’d pray that it was my mother, not my father, who would pick me up from social and sporting events. She had the nice car.

Dad, on the other hand, drove a Toyota Hilux, but not one of those gleaming monsters you see CUBs (cashed-up bogans) driving around today. Rather it was a clapped out one-tonner he’d had for as long as I could remember. It was so old it had a factory-fitted wooden tray on the back.

I’d die a slow death when I’d see the clunker coming up the road. The only thing worse was when we’d offer someone a lift home – which, in the stinking summer sun, meant we’d all rub legs as we sat along its bench seat.

Thankfully my mother was not a fan either. Towards the end of the Hilux’s life she would put pot plants in the back and use it as a sort of moveable garden ornament.

Yet my father’s taste (or lack of) in cars has had untold influence on me.

To this day I’ve never bought a new car, and for most of the cars I’ve owned the thought of theft is more of a running gag than a reality.

Yet maybe it’s the kilometres I’ve been racking up, or perhaps it’s that my labrador retriever, Buffett, has slobbered over every inch of my sedan, but I’ve finally decided that it’s time to trade up.

Trading up

Yet I’m no car person, so I enlisted the help of my good mate Sam, who makes his living selling used cars (which is much nicer than calling him a used car salesman).

Barefoot: “Tell me about all the scams you blokes use to sucker people in.”

Sam: “Mate, that’s all a beat-up. The real trouble happens when you buy privately.” (Spoken like a true seller of used cars.)

And so the hunt began.

Supply and demand

In talking to Sam I started to understand that the car market is much the same as the share market – it’s built on the back of supply and demand and influenced by external factors like the Global Financial Crisis and government policy.

When GE Money and other lenders effectively pulled out of financing new vehicles last year, some dealers were forced to flog new stock at a loss. This in turn sent the second-hand car market spiralling down – and canny buyers picked up bargains.

It’s a similar situation with luxury cars. The GFC has seen many a banker lose his bonus and therefore his Beamer, which is usually sold off at auction. (Sam also advises that buying a car at auction is a risky strategy, given that in most instances you can’t test-drive the car and that you’re competing against used car dealers. Enough said.)

Government trickery

The Government has artificially boosted demand for new vehicles by giving small business owners a 50 per cent bonus tax deduction for cars.

Most dealers are run off their feet, yet when this arrangement ends in December you may find they’re more motivated to do a deal.

Still, if you’re like me and you know more about stocks than shocks, the internet has you covered.

Surf the Web

Like most things these days, it pays to kick the tyres in cyberspace before you find yourself slugging it out with Sam and his mates.

So your first port of call should be to the government-backed howsafeisyourcar.com.au, which rates most of the cars on the market in terms of safety, and offers a great overview of the features that have been known to save crash-test dummies.

While you’re on the Net, the next thing to do is go to sites like carsales.com.au and carsguide.com.au (owned by News Ltd, publisher of the Herald Sun), where not only do you get expert reviews but you can get a feel for where the market is.

Car Inspection

When you’ve found your dream machine (or money pit), it’s a wise investment to pay $150 to get a vehicle inspection, just to make sure you’re not buying a Timbercorp.

If you’re a business owner there are tax advantages to leasing (so long as you can keep, or fudge, a logbook). If you’re employed you could ask your boss to include your vehicle in a salary packaging arrangement the next time you review your pay.

Avoid car dealer financing

If neither of these options is available, it’s best to use as much cold hard cash as you can afford. Stay away from dealer financing, especially from outfits like Motor Finance Wizard, who flog horribly overpriced cars under the guise of them being interest-free.

Borrowing money for something that falls rapidly in value only serves to compound your losses.

Yet most of this is common sense.

Steal yourself for the car showroom

What’s not so well known is that most car accidents happen on the showroom floor.

We all know that cars are a dud financial deal, but unless you want to get around on a bus they’re a necessary part of life.

The trick is making sure you don’t end up hitting a financial pothole.

My old man says to buy the cheapest car your ego can afford.

Until the other day I was still no closer to working out which car I should choose. Then by chance it happened.

I pulled up at the lights and Buffett and I had our eyes drawn to the left – through his slobbered, slimy window.

It was love at first sight.

A gleaming, white Mitsubishi Triton ute.

It was perfect – just the vehicle for a city dweller and his horse. Er, dog.

Even better, I’m sure that in the fullness of time it will almost certainly embarrass the hell out of my future son.

And before you buy, check out my money management plan here.

Tread Your Own Path!