How to buy a new car

Follow our buying guide to make sure you get the best deal on a new car.
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01.Do your homework


June is one of the best months for buying a new car. There are a number of end-of-financial-year deals on offer, and the after-effects of the global financial downturn mean you may be able get a good price for your trade-in. Provided you do your homework and negotiate effectively, you can save thousands of dollars. See our Cars section of the website for lots of useful tips and advice on everything from avoiding useless car extras to the latest ANCAP figures on car safety ratings.

Beware of dealer tricks. By selling you an extended warranty, for example, car dealers can get up to 67% of your premium as commission – which goes to show what poor value these extras can be. Follow our eight buyer road map rules to ensure a smoother journey towards getting a great deal:

  1. Research, research, research
  2. Trade-in or private sale
  3. Go for a test drive
  4. Make sure the price is right
  5. Beware the compliance plate trap
  6. Be wary of extras
  7. Arranging your finance
  8. Finalising the deal

Research, research, research

Once you’ve decided on the type of car you want, jump online to find out which particular models suit your needs. Start with the manufacturers’ websites or check buyer guides in car magazines and newspapers. Read as many reviews as you can of the model(s) in which you’re interested (though bear in mind that no review comes without bias), and look out for reliability surveys.

In particular, look for: 
Safety credentials As well as ABS brakes and driver and passenger airbags, look for electronic traction and stability control, and side and curtain airbags.table

Fuel consumption  and environmental credentials  Of the 20 top-selling new cars in Australia (August 2009), the Toyota Yaris, Volkswagen Golf and Hyundai i30 are the only ones with a five-star rating for their environmental credentials. The rating is based on the best rated model; for more information, see Also, check fuel consumption figures displayed on the yellow labels attached to the windscreen of new cars. Be aware, though, that while the label allows you to compare between different cars, official fuel consumption is determined in laboratory tests and how much fuel you will actually use under normal driving conditions is likely to be higher.

Potential resale value Recent trends indicate that vehicles with good safety and fuel efficiency credentials are performing increasingly well for resale value – see or for more information.

Car insurance costs Consider these as well as the initial cost of buying the car. We asked insurance company GIO to quote annual comprehensive car insurance premiums for similarly priced cars, and found the premium for the Hyundai i30 was $50 cheaper than for a Toyota Corolla. You can save even more by getting quotes from a range of insurers. Our car insurance survey found average price differences per year between $440 to $1500, just by shopping around.

Warranty  New cars come with a manufacturer’s warranty of up to five years, and even 10-year warranties are available for some components of the vehicle. Increasingly, many new cars also come with roadside assistance and set-price servicing.

Model cycle The life cycle for models varies between manufacturers, but typically there are minor updates every two years while major updates come about every four or five years. With 4WDs, these periods tend to be longer. Check the models you’re interested in via a website such as to determine how long they have been in production. The longer you have to trace back, the greater the chance a new model is imminent. Buying a model that’s about to be superseded, especially by a new-generation vehicle, will give you a point of leverage with the dealer, as its resale value will suffer with the arrival of the new model.

- Article co-authored by Fraser Stronach



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