by Scott Pape -
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.
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 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 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.
Tread Your Own Path!
Use our handy Car Loan Calculator to work out if you can afford a car loan.
Photo: http://www.flickr.com/photos/shutterhack/2481372103/
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4 comments
Any chance of a photo of your new vehicle Scott
Dear Scott, I agree. We would always advocate for fiscal responsibility in purchasing a vehicle. At the same time, I must speak up for car dealers. At Swan Hill Toyota we provide a service to happy customers, and we sell at a a fair price and a modest profit. The hilux/Prado/Landcruiser is an essential tool for our farmers, and we are pleased to be assocated with the Toyota product. We also do a lot of good in our community – recycling that profit into employment opportunities for 20 locals and supporting the local economy, events and causes. I thought, as a local yourself, you might buy your next hilux from us!! What will the trade-in value of the Triton be vs the hilux in 5 years time? Regards, Rebecca Parseghian, owner, Swan Hill & Kerang Toyota.
Many years ago, I sold used cars.
I also subscribe to the “buy the cheapest car that your ego can afford” philosphy and have saved myself tens of thousands of dollars simply by not buying another car until the last one is dead.
There is a practical tip to go with that: Always buy old cars with low kilometres.
My car before last, was an 18 year old Toyota Corona with only 95,000 on the clock. It was immaculate and lasted another ten years. Not bad for a $5,000 dollar investment. I ended up gifting it to a friend who was a single mum and she finally retired it last year at 31 years of age (the car, not her).
My previous car was an 8 year old Toyota camry sedan that I bought for $11,000 and which had only 45,000 on the clock. At the same time a friend bought a three year old corolla with nearly 100,000 KM. It cost nearly $14,000. The Camry was immaculate and lasted me until earlier this year, when it was written off in an accident. But I was paid out $7,500 because of the car’s condition, despite it now being 14 years old.
My current car is a 16 year old Ford Fairmont wagon (so the golden retriever doesn’t dirty the back seat…), which has only 100,000 on the clock and cost a mere $5,500. Again, this vehicle is immaculate and drives like new. I expect it to last me at least 10 more years of very comfortable driving.
With each of these cars, I have spent almost nothing on maintainance, beyond regular servicing. They simply had not done enough KMs on purchase to have accumilated all of the wear and tear on components that leads to major faults and expensive running repairs.
The second bit of advice that I would offer is to not buy a new car within the first two months of looking unless there is an urgent need to purchase, or you find something that is obviously a steal (an RACV check or similar will most often tell you if there is something fishy…).
The reason for this is that if you are patient and wait, you will eventually find a car that is priced so well as to make the purchasing decision for you. There are periodic bargains out there, due to rushed sales, deceased estates and a variety of other factors, such as clueless owners. If you take your time, you will be able to snap up one of these and potentially save thousands.
Finally, expensive foreign cars from exotic locations have similarly expensive foreign parts from exotic locations. Also 4WD vehicles are complicated beasts with much that can go wrong. Maintainance on exotic cars can be surprisingly expensive, so unless you want to have to mortgage the dog, keep it simple and drive a regular, fairly common car that won’t spring you for $1,000+ repair bills everytime something minor goes wrong.
Lease Cars? I can’t find out any information on your site about whether they are worthwhile. I am driving a 1996 Toyota Prado a bit beaten up. Wondering how I get that newer second hand car as this one has cost me alot of money this year…..Can you help with information about Car Leases. SgFleet is the one my company is aligned with. Thanks Sarah