In the year ended March, more than 22,000 New Zealanders migrated to Australia, joining the 500,000 Kiwi-born folk already there.
Of those 22,000, most will want to have the comforts and convenience of home, including a car. However, one of the disadvantages of emigrating is that people can find themselves in situations which look similar to home but which can be very different, sometimes expensively so.
Savvy, Australia's leading financial comparison website outlines here what emigrating Kiwis need to be on the look-out for when buying a car in Australia.
The aftermath of the pandemic and resulting supply chain problems has disrupted the supply of new cars. The resultant leap in the price of secondhand vehicles has also hit the market, as has the global shortage of microchips (vital components of cars, as well as for computers and mobile phones).
Waiting lists for new cars have stretched out to 18 months in some cases, according to Savvy CEO, Bill Tsouvalas, so people are hanging on to old cars longer. Savvy's 2021 Car Ownership Costs report found used car prices had jumped to 37 per cent above the pre-pandemic high in February 2020. Meanwhile total car sales in November 2021 fell by 15.3 per cent over the previous year, highlighting how the supply shortage has activated the law of supply and demand – increasing prices.
"We've seen in recent months some cases where customers were paying a premium for in demand used cars," he says, "as they didn't want to wait for months for a new vehicle to arrive." Some hard-to-get prestige vehicles, such as top of the range Teslas, are attracting prices more than the owners paid for them – because wait times have blown out so much, pre-ordering has stopped.
So here are Savvy's 'super seven' tips for buying a car in Australia:
Know your market – Tsouvalas says: “Used cars are holding their value better because there are fewer cars entering the secondhand market. It’s a seller’s market; finding good deals can be hard.” The best way to ensure the best deal is to do due diligence on car finance and explore your auto loan options. If buying privately, check the Personal Properties Security Register to see if there’s any money owing.
Know what you want – Identify your budget and get it straight in your mind about why you need a car and what you will use it for. Be analytical – don't forget insurance and running costs. Fuel prices are horrendous right now and there's no sense in buying a costly car, but having to eat instant noodles every night. It may be you don't even need a car; Australian public transport is pretty good.
The fuel decision – do you go petrol/diesel? Or a hybrid? Or a full electric vehicle (EV)? Australia's federated structure means incentives for electric and hybrid cars differ between states. Rebates of up to A$7500 apply to new and used EVs and FCEVs (Fuel Cell Electric Vehicles. Hybrids and EVs have lower running costs – so crunch these numbers to arrive at your best choice (the New South Wales Government has a helpful and comprehensive Car Buyer's Guide).
New or used? So prices of secondhand cars are up. As well as doing due diligence on a car, seeking the best finance with the most favourable interest rates can make a real difference in your payments and the final cost of your car. If you're looking at a new car, it is often well worth considering a demonstrator – close to new, they can be heavily discounted and are often backed by manufacturer and dealer warranties. There are a number of websites you can use to search new or used cars Australia-wide, such as Car Sales or CarsGuide.
Essential vs "nice to have" – Don't be tempted by all those mouth-watering optional extras, especially if you're financing your vehicle. Don't bother with extras like a protective coat, dash mats, extra tinting or other sparkly things that add to the dealer's profit margin. Financing "nice to haves" drives the cost up substantially, especially over a full 48 or 60-month term.
Beware of dealer finance – Essentially, all you are paying for is the convenience of signing up there and then – as opposed to shopping around. Prices and deals vary but you could end up paying $1000 or even more than you should. You may come across dealer finance offers of 0 per cent, which seems appealing, though you may end up paying more in the long run. In this situation, you don't always have an option of negotiating much off the regular retail price (RRP), nor desired extras due to often inflexible terms.
Compare, compare, compare – Compare car loan options to make sure you're getting the best loan available, according to your credit profile. Carefully consider car loans based on the comparison rate. Think about monthly repayments and the impact on your budget. Longer loan periods mean a more affordable repayment, though cost more in interest repayments in the long run.
If time is of the essence, then a product with rapid loan approval and the option to borrow 100 per cent of the car’s value may be important – depending on your individual circumstances. Those good at saving may prefer deals with no early exit fees. That’s why using a car finance broker is a smart play. They give side-by-side comparisons of different lenders and let you choose from a range of loans you can qualify for. For more information, visit: Savvy.com.au