Top five things to do before buying your first car

Getting the right car for the right price can be tricky, but it's not impossible.


Your first car is generally your first big financial decision. You can make sure you don’t regret the major purchase by following a few pieces of advice.

  1. Determine your budget
  2. The price of the car only represents a part of the total cost. There are many expenses, both one-time and ongoing, that you’ll need to take into consideration when working out your budget, including:

    • Fuel
    • Registration
    • Stamp duty
    • Car insurance
    • Servicing and maintenance
    • Parking permits and tolls

    Take a hard look at your finances and work out both how much you have saved towards the purpose price and the maximum monthly expense you can afford. Keep that number in mind and don’t go over it no matter how much you love a car.

  3. Do your research
  4. Once you know how much you have to spend, it’s time to do some research about potential cars. Some places to start looking include:

    • Manufacturer’s websites
    • Buyer guides in car magazines or newspapers
    • Reliability surveys
    • Australasian New Car Assessment Program (ANCAP) ratings
    • Fuel consumption ratings
    • Tips for picking a cheaper car
    • Choose cars with a smaller engine
    • Choose manual instead of automatic transmission
    • Smaller cars cost less to insure
    • Pre-registered cars come with chunky discounts (because the dealer is the owner)
    • Petrol vs diesel

    Petrol cars are generally cheaper than diesel when it comes to purchase price, about $2000 – $3000 less. However, diesel cars are more fuel efficient by a third. If you’re going to be driving a lot, the fuel savings can add up and mean that diesel is a cheaper car overall.

  5. Complete safety checks
  6. New cars are obviously more expensive, but also come with peace of mind, as they are protected by warranty. You’ll have more choices with a new car, as well as the latest technology and brand-new mechanics.

    Second-hand cars are much more of a bargain, but also present a risk of potentially buying a lemon. You can mitigate some of the risk by asking the right questions:

    • How long has the seller owned the car?
    • How many owners has the car had?
    • Why is the car for sale?
    • How many kilometres has the car done?
    • Is a full-service history available for the car?
    • Has it been in a crash?
    • Is it usually stored in a garage?

    You should also thoroughly inspect the car. The best way to do an inspection is with an RACQ-approved trusted mechanic. If there are any major mechanical problems, you should avoid buying that car. If there are only a few minor problems, you can use them as leverage to negotiate a better price with the seller.

  7. Test drive the vehicle
  8. You always want to take a car, new or used, for a test drive. You’ll get a feel for how it handles, but you’ll also uncover some potential problems. Bring your friend who’s the biggest motor-head to get some perspective is a great idea.

  9. Read the contract before signing it and keep a copy of it
  10. Never sign an incomplete contract. Always thoroughly read a contract before signing and make sure you don’t sign until you understand everything you’re agreeing to. Read the contract to make sure everything you agreed upon is included.