Guide to buying a car in Australia as an expat

Contributed by Savvy Finance, 08 March, 2016

Australia is similar to many countries such as the UK and USA – you will need a car to get to most places. So the logical step is to buy a car. Australia has to import most of its cars (after 2017, all of their automobiles will be manufactured off shore) and as such, relative prices are higher than equivalents in the USA, UK and even Japan. Here is a guide to finding the best deal, dealing with regulations, buying insurance and finding competitive finance.


Finding a deal on a car

The two major routes to finding a great deal on a car is buying from two major sources – private sellers and dealers.

You can find privately sold cars in abundance on the internet at a variety of used car classifieds sites such as www.gumtree.com.au and www.carsales.com.au. You can pick up a used car for much cheaper via a private seller, if you are prepared to haggle on the price. Be wary though; the private market is unregulated and there's little recourse if things go wrong.

Dealers are licenced by the government and provide after-sales services and statutory or extended warranties. You too can haggle with a dealer, but it's unlikely you'll find as good a deal compared with buying privately.


Finding finance

Many financiers and brokers such as Savvy Finance will assist expats in finding equitable deals on finance or leases, even if you are not a permanent resident. This option may entail higher interest rates due to your risk profile and lack of Australian credit history.

Another popular option is to take a novated lease. This is an agreement struck between you, your employer and financier.  A novated lease means your employer sacrifices some of your pre-tax pay towards the loan. It also allows you to pay for the operation and maintenance of the car. It reduces your taxable income and is a cost-effective alternative to providing you with a company car. Once the novated lease is up, the employee retains all lease obligations, such as paying off a residual (balloon payment) or starting a new lease.


Regulatory documents and registration

Registration, also known colloquially as "rego" is a mandatory process street legalising your car in all states and territories. You will need:

RWC is a pivotal part of buying a car. If your car does not have one, it is not worth the trouble of obtaining one after the fact. Your car may need thousands of dollars of repairs to make roadworthy.

Most states, registration also covers compulsory third party insurance (CTP) which covers property and personal damage to other vehicles if you have an accident. This is not the same as third party property or comprehensive car insurance, which you must purchase separately.


Insurance

Insurance premiums typically cost between $600 to $1,100AUD for comprehensive car insurance (covers damage to your car and others' property.) You can lower your premium by agreeing to a higher deductible, known as an excess, or getting rid of other features such as roadside assistance. If you enter into a finance agreement, comprehensive insurance is often compulsory.

Tags: interest | Finance | Insurance | Japan | Australia | regulation | services | insurance | internet | tax |

 

 





Articles Archive