What's the real cost
Once you've got the car, there are running and maintenance costs to consider. These vary from model to model, so factor them into your budget early on. Get an insurance quote and consult with your repairer to get an idea on service and repair costs.
Set an upper limit to your budget and stick to it.
Make sure the car you love is also the car you can afford. See NRMA's guide on Vehicle Operating Costs.
Negotiating a deal
You know what car you want and you're ready to negotiate. Don't take this step too lightly - you can usually negotiate a lower price than the dealer is asking.
It often depends on how keen you are to buy and how keen the seller is to sell. Used car prices vary widely, depending on the condition of the car, the fitted options, the number of kilometres on the clock and even the colour. Estimate a realistic price, and then offer slightly less.
If the seller meets or gets close to your price, do the deal. If they don't, walk away and look elsewhere.
The golden rule is to keep the seller uncertain whether you're interested in buying that car or another one from someone else. Until the deal is done, the price can always go a little lower.
Don't worry if someone else buys the once-in-a-lifetime bargain you've had your eyes on. Another car is sure to come along soon.
Leaving a deposit
If the seller asks for a deposit, there is no set amount to leave, so pay as little as possible. Make sure you can get the money refunded if the car fails the inspection report. If the reported condition of the vehicle is not satisfactory you can rescind the contract, and the deposit paid must be refunded in full.
Signing a contract when buying from a dealerIn NSW there is no "cooling-off period", however if you arrange finance through the selling dealer there's only one business day. Don't let anyone force you into signing a contract you haven't read or you don't understand. Even if you sign and have a change of mind remember it's still an enforceable document.
Method of payment
Shop around for the best finance deal. We can assist through NRMA Car Loans or your bank. The general rule about borrowing money is: the longer you take, the more you pay. Only borrow as much as you need, and don't over-commit.
Pay for your car with a bank cheque (if possible) so you don't have to carry a large amount of cash around. Get a receipt from the seller. Our print-friendly buyers' kit includes a receipt form. (PDF 999KB/9 pages)
Consider leasing or hire-purchase, particularly if you're in business. You may be eligible to claim some of the payments as tax deductions. Talk to your accountant or business adviser before entering into a lease or hire-purchase agreement.
Trading in your old car
Trading in your car for another is easier in some ways than selling and buying privately but it does have its drawbacks. The main one is that you probably won't get as much money for it. After all, the dealer has to re-sell your car for a profit - and that's after fixing any faults.
Trade-ins can also be confusing. For example, the amount offered for your old car could include a discount on the car you're buying.
Ask the dealer to give you the total changeover price - how much you'll pay to leave your old car and drive away in a new one. When all is said and done, that's the only figure that matters.
Ignore dealers' negative comments, such as: "nobody wants to buy that model anymore" or "your car isn't in very good condition". These are often just sales techniques to get you to accept a lower offer.
If you have time and patience - you could get a trade-in price from the dealer, and then try to sell it privately for more. You might have to wait a few extra weeks to get your new car but you'll keep the dealer's profit margin for yourself.