Getting A True Bargain Requires Careful Buying
When it comes to buying a new car in Australia, is the car “new” new, or is it just “new” to you? That is to say: are you buying a pre-owned vehicle, or one that just rolled off the assembly-line? Honestly, the best value for your money is going to be a pre-owned vehicle in the $6,550 to $13,100 price range with less than 100k miles on it.
If you set your sites at an average of $9,825 AUD, and three years’ use, you’ll be right where you need to be. Now, granted, this is a generalization. You’ll find that higher or lower prices could describe a better deal. Still, this is about the same range you can expect in America, though AUD currency is about 69% of US currency, in terms of value, as of July 26th, 2019.
Contrast that with a car thats $39,300 brand new. You’re going to average between 24,000 and 34,000 kilometers a year, in terms of “mileage” (metric units notwithstanding). Often warranties in Australia peak around 150,000 kilometers, many at 100,000 or less. That’s just three to five years before the warranty’s up. As well, when you buy a new car, it loses value.
Maximizing Potential Value
Meanwhile, if you get two to three years out of a $6,500 vehicle, that’s 48,000 to 102,000 kilometers. Plus, you can sill sell it if you’ve taken good care of it. You’re going to average $71.50 a week in petrol, that’s $3,718 AUD annually. Average costs of a car annually in Australia is $7,903.50.
Now that average includes insurance, miscellaneous maintenance, and a monthly payment—for one car it’s going to come to about $243.62 a month, on average. That’s $2,923.44 a year. Throw on a $500 bill for insurance and $500 for incidentals, it’s easy to see where the $7,900 figure comes from.
But if you just buy outright, you’ll save about $3k a year over the actual cost of the vehicle. Here’s where the kicker come sin: $3k a year in loans means it takes you 10 years to pay back a $30k new car, if you’re paying in around $243.62 a month. At 24,000 kilometers a year, you’ve put 240,000 kilometers on your vehicle before you even own it.
Also, this doesn’t take into account interest you pay on your car loan, or big repair costs that hit around when your warranty expires 90,000 to 140,000 kilometers before your financing does. In the end, you’ll pay $60k for a car you can only sell for $2k to $5k. Buy used, you can sell for a third of your purchase cost with good maintenance, easy.
Combined Buying Tactics Maximize Value
Spend $6,500 on a used vehicle and get two to three years out of it, and you still have basic insurance, wear-and-tear, and petrol costs, but no loan or interest. Ultimately you’ll save money and have exactly the same utility.
True, a few alterations may be necessary. If the vehicle is everything you need, except it doesn’t have any way of towing, don’t worry–finding a good towbar is easy as clicking the link.
The takeaway is: when seeking to buy a new car in Australia, should ensure your definition of “new” includes pre-owned vehicles, then search through available options to find the best. Don’t go with the first car you find. Line out at least five between $6,500 and $13,100. Fully examine each car inside and out. Ask the vehicle’s history, and why the buyer is selling it.
Buy the vehicle in one lump sum, and plan to get a minimum of two years out of it—that’ll about cover what you would have paid in loans on a new car annually anyway. Do this right, and you’ll save money while getting the most for your resources.
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