Finance - General Advice: Buying a Car
For many students a car is their first major
acquisition and represents an important decision in life - a decision
that requires careful consideration and another necessary evil -
money.
So you have decided that you want to buy a car,
either your first car or you would like to upgrade the one you have.
Like most students you don't have a lot of money so a new car is
probably out of the question.
There are still several options that you can
consider. These include; licensed traders, private sales, and auctions.
Firstly, you need to decide how much you can
afford (Refer to Budgeting section.
It is important to remember that the purchase price is just the starting
price of calculating the cost of a car. You will need to allow money
for associated costs, which include transfer fees, stamp duty, insurance,
running costs, maintenance and servicing.
Once you have decided whether you can afford
to buy and maintain a car, you will then need to decide where you
are going to purchase it from.
1. Licensed Motor Car
Trader (LMCT)
Buying through licensed traders may be more
expensive but it offers you greater protection:
There
is a cooling-off period
If
the car costs more than $3000, it will be covered
by a Statutory Warranty. This means they must
repair any faults during the warranty period
so that the car is in a reasonable condition
relative to its age.
You
will have a Clear Title, guaranteeing nobody else owes money
on the car.
2. Private Sale
This is buying a car directly from the owner.
It is often cheaper than going through an LMCT. The weekend newspapers
and the Trading Post contain lists
of cars for private sale.
With this method of purchase you generally have
less legal protection. For instance, there is no cooling-off period,
the car is not covered by a Statutory Warranty, and it is your responsibility
to ensure that the vehicle has a clear title. You can however cover
yourself in these matters by doing your research. The RACV or the
Office of Fair Trading are great places to start.
3. Auctions
Buying a car at a public auction is similar to
buying privately. In addition, with most public auctions it is
not possible to test-drive the car or even
start the engine. So if you are thinking about purchasing at an auction take
care. If possible, take a motor mechanic or someone who knows a fair bit
about cars and have the car inspected prior to the auction.
While buying a car at an auction can be cheap,
you need a great deal of experience to avoid buying a troublesome
car. Also payment is required in full on the day of the auction or
the following day.
So before purchasing any vehicle do your research
carefully before you hand over any of your hard-earned dollars.
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