What to Research Before Buying a New Car
Car Research in 2022
Whether you are buying new or used, it pays to do your car research before you shake hands (or elbow bump). Here are some top tips and considerations before buying a car.
Let's get started.
The landscape in 2022
Of course, COVID has had an impact on car prices over the last few years. Used car prices have seen increases by as much as 30% - sometimes even more.
New cars are often subject to extended delivery times, usually several months. Some popular vehicles from big names like Toyota, Mazda and Ford are even longer.
The reasons why car prices are up
- Supply chain disruptions, chip shortages and stock shortages: This means that dealers have less stock available so there’s less need to offer low prices to attract buyers
- No (or less) overseas travel. This has meant Aussies are spending more money on things at home, for example, cars
- New car buyers opting for used vehicles. Some new car buyers are opting for late-model used cars to avoid wait times. This puts more demand on the market, meaning higher prices
Aussies love cars, we have one of the highest car ownership rates in the world, and this also keeps prices up. Some people have reported vehicles getting sold within minutes of being listed online.
Other buyers have found the car they’re looking for sold while they’ve been on the way to view it.
What car research do you need in 2022?
This is an important question to avoid common car buying mistakes. Buying a new car can be an emotion-charged decision, but by taking these steps, you can choose a car that's both highly satisfying to own and also practical for your lifestyle.
Start by listing out the things you'll use the car for. If you rarely leave urban areas, you may not need a 4WD, for example.
A good idea is to start paying attention to other cars you like on the road. Try to get the brand logo and even the model and do some Googling.
Furthermore, finding the segment(s) that suits you is a big help, for example, an SUV, ute, hatchback or crossover.
Here are some questions that can help when doing car research
- Do you often park in tight spaces?
- Do you regularly carry passengers?
- How often / do you plan to do road trips?
- How often do you tow a trailer or carry large cargo?
- Will it be parked (kept) in a secure location?
- Do you love driving, or just want to get from A to B as economically as possible?
And, the most important question
- Do you feel excited and enthusiastic about the vehicle you’re looking at?
Some people spend thousands of dollars on cars that they’re not interested in. This leads to neglect, expensive repair bills and a lower resale value.
“It gets washed every time it rains!” - Don’t be one of those car owners.
Soon you'll have a shortlist of cars that suit you, and you can move to the next stage in the process.
It’s handy to know the rough numbers before signing your life way.
Here are some common car costs
- Stamp duty (one off payment)
Fuel is a tough one so here are some benchmarks.
- Average fuel economy for passenger vehicles in Australia: 11.1L / 100km
- Average distance driven per year in Australia: 13,301 km
- Average fuel price in Australia (late 2021 / early 2022): $1.72 / litre
Taking the above into account, the average Australian motorist spends roughly $2,540 per year on fuel.
Do a little car research online to identify which of your vehicle options provides the best value for money. Remember to consider fuel economy, cost of servicing, and insurance.
If you are purchasing a used or ex-demo model, it's important to do your car research and find out what the history of the vehicle is.
For a dealer or private sale car, look for the service history logbook and previous registered owners. A vehicle history check, known as a PPSR will give you peace of mind regarding the odometer reading, any accidents, write-offs, reported thefts and so on.
If you are buying a used car, consider getting a professional inspection which you’ll have to pay for, but can save you money (and headaches) in the long run.
No matter the car you buy, safety is paramount. ANCAP provides safety ratings on cars dating back to 1993.
Safety features have grown in sophistication over the last few years. Nowadays, most cars come standard with driver assist technology that offers excellent safety ratings.
Here are a few
- ACC (Active Cruise Control) - maintains a constant distance between you and the vehicle in front. The system will brake and speed up as required
- (AEB) Autonomous Emergency Braking - when the system detects an imminent front-end collision, it applies the brakes
- Blind spot detection / monitoring - warns drivers when there is another vehicle in their blind spot
- Lane departure warning / assist - detects if you drift into another lane and can steer your vehicle back to the centre of a lane
There are many more of these features that make modern cars much safer than older vehicles so do some car research to find out what your next vehicle has.
Resale value and depreciation
Buying a new car with less depreciation means you'll recover more of your original purchase price when it's time to upgrade. In other words, the later the vehicle was made, generally the more money it is worth.
Choosing neutral colours, recording your service history and taking good care of the car's interior and paintwork will also help to retain your car's value and generally keep it sellable.
Reliability and brand reputation
A huge part of selling a vehicle is brand reputation. Buying a new car from a well-known brand makes it easier to resell which is part of car research.
You might get a great deal on a new car from a lesser known brand which can be great, but years down the track when you go to sell the vehicle, how much value will it hold?
Brands like Toyota, Mazda, Ford, VW and Mercedes are popular in Australia and hold their value better than some other brands.
Test drive car research
Before you make a final decision, drive a few different cars to get a feel for how each one handles and feels - and bring a passenger. This is especially important if you are moving from an automatic to a manual, or from a small car to a large car.
You'll quickly get an idea of what you’re comfortable with and imagine it in your driveway.
It’s hard not to get too excited sometimes!
Buying a car
After narrowing down your selection to a few makes and models, get a quick quote for a pre-approval.
In 2022, a pre-approval is ultra important because cars are in such high demand and short supply. A pre-approval means that your finance is locked in before going car shopping so as soon as you find that perfect vehicle for the right price, you can pay a deposit knowing it’s safe to do so.
Some people find a vehicle before getting pre-approved which is a big risk as the finance might not get approved meaning they could lose their deposit and the car to another buyer.
As part of your car research, get in touch with a car loan broker. This way you can find out about competitive car loan options from lenders that aren't a big bank, and find the best car loan for your needs.