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How to outsmart the car salesman and save

In the world of real estate, the oft-quoted maxim of house hunting is “location, location, location”.

But when it comes to buying car – whether it be new or used, through a dealership or privately – the most important principle to adhere to is “research, research, research”.

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“When you are buying a car you are already buying a depreciating asset that you are going to spend money on, so it is very important to get a car in good condition,” says motoring body RACV’s Manager of Vehicle Engineering Michael Case.

“And you do this by doing your homework.”

Here’s what you need to know before you get behind a new wheel:

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It’s not about the bling

According to Mr Case the first step in researching a car is drawing up a budget and assessing what you need versus “what you want”.

“People often make the mistake of wanting a particular car from the get-go which can get them into trouble,” he says.

“A common example is the four-wheel drives. They are designed to be used off-road, and if you don’t use them in the way they were intended then, really, it is a waste of money.”

Pay for it in cash

Mr Case is not a fan of taking out finance to buy a car, either, arguing it makes little sense to plough interest repayments into a depreciating investment that will never give you a return.

“My advice is to save up the cash yourself,” Mr Case says.

Brand new isn’t better

Mr Cash concedes there are benefits to buying a new car – such as no ownership history – but doesn’t think they are worth the cost.

“New cars lose most of their value in the first 12 months, so I always buy a car that is six to 12 months old, with low kilometres,” says Mr Cash, who drives a Holden Calais sportswagon.

“That way you still have some of the warranty in the car, and the car has done most of the depreciating in value by then.”

Check and check again

Once you have a budget in place, and a car in mind, the next step is to run a check on the vehicle at the Federal Government’s Personal Property Securities Register, which costs $4.

ShutterStockThe online search will alert the buyer to any minefields, such as finance owing on the vehicle or whether it has been written off.

Click on the owl to see state-specific advice on buying a car  

According to Investigations Manager from the Queensland Office of fair Trading, Grant Rasmussen, whether you are buying from a dealership or a private seller, you cannot be too thorough in your mechanical checks.

“You want to get the car checked by an independent qualified mechanic,” says Mr Rasmussen.

Most states require sellers to obtain road worthy certificates verifying the car’s condition, but Mr Rasmussen points out this has limitations.

“These certificates only show that the car is road-worthy at the time, they do not tell you if the cam belt, which can cost $1000, will need to be replaced in a few months,” he says.

It is also important to inspect the owner’s manual to ensure it has been regularly serviced, and ask for information about the car’s history.

Don’t rush into the purchase

Once you are satisfied the car is in good condition, it is important to agree on a fair price.

Mr Rasmussen notes that first-time car purchasers rush the process, and often pay too much.

“I recently bought a car with my son, and it took us a few months to find the right car and he found it quite frustrating,” he says.

“In his mind, every one of the cars was worth buying, but I made him take the cars to the mechanic and check whether he could afford them, and, in the end, we got a really good car for him.”

The trick is to maintain a degree of calm and have patience while doing your research.

“Slow it down, step back and take a breather,” Mr Rasmussen says.

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