Buying a car: creeping costs to keep an eye out for

Whether you’re trading up, trading in or buying your first car, it’s important to understand the costs associated with buying a new car - both before you get behind the wheel and after you’ve hit the road.

While the amounts may vary depending on where you live, here’s our checklist of the nine things to consider when splashing out on some new wheels

1. Purchase price

This is the most obvious cost of buying a car, but it’s usually not the only one. If you’re buying a second hand car privately then the price is likely to be lower than a similar car would be at a dealer, but it may not come with the peace of mind of being serviced before the sale, or accompanied by a dealer warranty. Sometimes these things can be worth paying a little extra for and may save you money in the long run.

2. Vehicle inspection

If you’re buying a second-hand car, either from a private seller or a car yard, it’s often a good idea to have a mechanic give it a once over to make sure there are no unwelcome surprises. They’ll generally check things like the engine warnings, accident damage, tire life and more to make sure you know the condition of the vehicle that what you’re buying. Spending some money on an inspection at the outset could save you thousands down the road.

3. Personal Property Securities Register check

This is a very small fee (just $2 if you do it yourself online!), but a very important one. Searching the Government's Personal Property Securities Register before you buy a second hand car will tell you whether the car has a security interest registered against it. A security interest means the car could have money owing on it and could be repossessed from you even though you've paid for it. It’s a good idea to do this either the day before you buy the car, or on the day of purchase to make sure that the information is as up-to-date as possible, and it could prevent you buying a car that is either not the seller’s to sell or is not able to be driven on the road.

4. Registration fee

Every car needs to be registered in order to be driven on the road. The registration fee is payable to the state Government that the car is registered in. Each state has a different way of calculating the rego fee - in some states and territories it is based on the size of the engine, while in others it is based on the weight of the vehicle. ¹

Most second-hand cars will already have some rego left, which means that you just need to transfer the rego to your name. Again, the fees to do so are dependent on the state,

Some states will also require a safety certification for older cars - in NSW this used to be known as the ‘pink slip’ but is now called the ‘eSafety check’ (and is required for light vehicles older than 5 years).

In Victoria, a Certificate of Roadworthiness shows that your vehicle’s safe enough to be used on public roads. It is required whenever a vehicle’s sold, if it’s being re-registered, and to clear some defect notices. To find out the requirements in your state and the costs involved, check your State or Territories Government website.

5. Stamp duty

When you buy a new or used vehicle you may be required to pay stamp duty costs when you transfer the vehicle into your name.

Most States and Territories have an online calculator which can help you estimate the stamp duty cost for the transaction. A link to the NSW stamp duty calculator can be found here.

6. Insurance

Finding the right insurance for you can be tricky if you haven’t done it before and some of the terms are bewilderingly similar. There are basically four types of car insurance to be aware of:

1. Compulsory Third-Party (CTP) (known as a ‘Green Slip’ in NSW and the ‘Transport Accident Charge’ in Victoria ) is a requirement across Australia before a car can be driven on the road. Its purpose is to protect any person that you might injure while driving. It doesn’t cover you for damage to other peoples’ vehicles and property, or your own. In some States and Territories, CTP is included in your registration fees. Check your State or Territory’s Government website for further information.
2. Third-Party Property is private insurance which covers damage to other people’s vehicle or property if you’re liable for it, but not damage to your own vehicle.
3. Third-Party Fire and Theft adds on coverage for your vehicle in specific circumstances (if it is stolen or set on fire) and can be a good choice if your car is not parked securely overnight.
4. Comprehensive coverage not only covers damage to other people’s property, but also covers damage to your own vehicle.

We’ve partnered with Allianz Motor Insurance to offer you a discount of up to 10% on your first year’s premium when you buy new car insurance online.* Find out more about the great range of features and see how you can tailor your cover to meet your needs you can visit our website here. 

7. Roadside assistance

Roadside assistance provides help with minor vehicle breakdowns like a flat battery or flat tyre. Repairs are frequently performed on the side of the road, or they will tow your car to a nearby garage if it can’t be fixed where it is. The cost will depend on the level of cover you choose.

8. Ongoing maintenance

A car is a complex machine and, like all machines, parts will wear and eventually get worn out. Maintenance of any car is essential to ensure that parts don’t get so worn out that they cause permanent (and expensive!) damage or jeopardise your safety.

Regular maintenance includes changing engine oil, rotating tyres to ensure they wear at the same rate and replacing ‘wear and tear’ items like brakes, brake pads, clutches, windshield wiper replacements, headlight bulbs, etc.

While a brand new car may include a warranty, this usually only covers repairing or replacing defective parts due to poor workmanship or a manufacturer error and doesn’t cover regular servicing costs.²

9. Car loan repayments

If you’re not buying your new car outright, then the rate of your car loan can make a big difference to how expensive owning a car feels. 

Qudos Bank offers competitive variable interest rate car loans from $10,000 to $150,000 with flexible terms - you can choose the length of the loan and how frequently you make your payments. Find out more at our website here and use our car loan calculator to see how our low interest secured car loan can help you take the road to freedom.

_{Article published March 2021}