Advice for Buying a Fairly New Car?

Lajas8 on 11/12/2020 - 17:28
Last edited 11/12/2020 - 17:44

Currently in the process of saving and looking to buy a fairly new car in a few years time.. Car of interest is the current model Corolla ZR hatch (e.g. buy 2019 model in 2023).. Will be looking for something that is only a few years old and has low kilometres etc.

  1. Is it bad to buy demo cars? Some reading I've been doing suggests to stay away from demo cars as they've likely been thrashed?
  2. Is it always better to buy from dealer rather than private seller to be safe?
  3. How many years old should the car be such that it's as new as can be whilst escaping the most significant part of depreciation?
  4. Do people normally save for the full amount of the car or do they save for a portion and finance the rest?
  5. I'm aware that buying end of the month is the best time to buy but are there any particular periods during the year where it's best to buy?
  6. Is the notion of offering 10% off the listed price of the car an actual car-buying principle that everyone adopts in negotiations when buying a car?

Thanks

Automotive

closed Comments

  • Blue Cat on 11/12/2020 - 18:05
    -5

    Advice for Buying a Fairly New Car?

    Don't.

  • salmon123 on 11/12/2020 - 18:17
    +10

    1. Every dealer will have a different definition of what they call a demo. At the end of the day, it's a used car. Some of them have been driven 1000km, some have been driven 10000km. You decide if the discount for a demo is "worth it" for you.

    2. The deals are always going to be in the private sales. If you're buying a 3 year old car with a 5-7 year factory warranty, you'll have some protection.

    3. Covid has caused car prices to spike, both new and used. It's hard to predict where they'll settle. There's various rules people use to derive how much a car should depreciate every year, etc … at the end of the day, there's too many variables to generalize this.

    4. Most people have a mortgage, so they finance the car one way or another. Again, it's a generalization, so make of it what you well.

    5. End of the month buying is a myth. You'll get a bad deal, if the dealer has had a good month. Dealer will run a new promo every few weeks - free automatic, $2k cash back/fuel/gift card, 0% financing. The price of the car will change depending on the promotion. Buy the car, when they're running a promo that works for you.

    6. Also a myth - some brands will discount more heavily than others. Take a look at some forums for your car and see what the "Street price" is when you are ready to buy. You can also check car sales for new car listings, to get an idea of what the "street price" is.

  • spackbace on 11/12/2020 - 18:18
    +11

    looking to buy…in a few years time

    Wow… just wow

    Member Since
    1 hour 5 min ago

    That'll teach me

    • holdenmg on 11/12/2020 - 18:31

      Obviously when people start posting about their next Car before the present date/time, their current ride is a DeLorean.

      • ajas8 on 11/12/2020 - 19:39
        +1

        Current ride is public transport

        • bobbified on 11/12/2020 - 21:00

          That's great! I have to drive myself around, but you have chauffeurs to take you places! šŸ˜

      • SF3 on 11/12/2020 - 21:15

        We might not be driving cars then so could just be nil and void in 2023 šŸ¤«

    • websterp on 11/12/2020 - 18:49

      In 2023 to be exact!

      • holdenmg on 11/12/2020 - 19:15
        +1

        No worries, ask for Marty or Doc.

    • pegaxs on 11/12/2020 - 19:15
      +2

      !reminderbot 11/12/2023 {Check in on how OP went with car shopping}

  • dylanando on 11/12/2020 - 18:42
    +5

    People plan this stuff? I impulse bought my last car

  • Hithere on 11/12/2020 - 18:48
    +6

    I always join a forum and ask randoms before making a significant purchase because I am lacking in confidence and common sense.

    Come back in a few years time, preferably in 2023 OP, the answers will be more up to date then.

    • ajas8 on 11/12/2020 - 19:43
      -2

      Obviously it would make more sense to ask when buying, but I just felt like asking anyways.

  • pegaxs on 11/12/2020 - 19:11
    +4

    *sigh* If only there was another thread on here about buying near new cars…

    • 1: Demo cars are seldom thrashed because sales guys are pretty good at spotting joy riders and most of the time, the sales guy goes with them on the test drive. (And honestly, who "thrashes" a Corolla?)
    • 2: Better from a dealer because cooling off periods, statutory warranties, someone to complain to or complain about to N/V/Q/whateverCAT. Ive found that private sellers want the same prices as a dealer but offer far less in incentives.
    • 3: Up until the next face lift/entirely new model. This is usually about 4 ~ 5 years on average.
    • 4: From my experience in the industry, most people finance if its new or expensive used/demo
    • 5: Two good times to get a deal; Around new MY releases, (around Oct/Nov-ish.) They will look at getting rid of last/current year models. Start of new year, they will be looking to off load vehicles plated as built in the previous year.
    • 6: Depends. If it's a cheap car, like a Hyundai Accent or a Kia Picanto, there a good change that there isn't going to be 10% in it. If its a BMW 3 series, there is definitely more than 10% in it. I always start at 15% off as my initial offer if it's for a new car and happily fall around 10% mark. Less than that, there better be a good reason for it.
    • spackbace on 11/12/2020 - 19:17
      -1

      Less than that, there better be a good reason for it.

      Because it's a Fiat 500 that you reeeeeeeally want?

      • pegaxs on 11/12/2020 - 19:23

        I'm saving up for an Abarth now. :D

        Sold the 500 to one of the wife's regular customers at her work when he saw me roll up in it one day to have lunch with her. Made "$500" on the sale, ironically. But now I'm sad and I miss my 500 :( But I have my new work car… a 2019 Mitsi Outblander… meh. No soul. In white. With CVT… and FWD… It's a soul destroying car that just oozes "I've given up on life"…

        • spackbace on 11/12/2020 - 19:29
          -1

          It's a soul destroying car that just oozes "I've given up on life"ā€¦

          Enough about the 500, what about the Outlander? :P

          Those ASX/Outlander CVTs are just woeful aren't they lol

          • pegaxs on 11/12/2020 - 19:50
            +1

            @spackbace: The 500 was soulful. It had vigour. It had life and it talked to me. It embodies the true passion of Italian made cars (ie: awesome to drive, if they stayed running long enough). I don't often get sentimental about cars that I sell, but this Italian lady has my heart all tied up in knots. It feels like I traded in a naughty mistress for a boring housewife…

            And that CVT in the Outblander. Good lord. I like CVT on some vehicles, but they missed the mark so far in my work vehicle. It's super unresponsive. lacks any feeling. Has no notable tune so you can audibly pick what speed you are doing. It doesnt even have the false gears and forget about over taking anything. And the buzz under acceleration… ewww. It isn't so much a transmission as it is a box of angry bees with an output shaft…

        • brendanm on 11/12/2020 - 19:52
          +3

          I'm saving up for an Abarth now. :D

          Have you considered a Peugeot or Renault?

          • pegaxs on 12/12/2020 - 17:39

            @brendanm: I was considering a French car on a budget of about $5k… but then someone suggested I should just up my budget and get a Tesla… Pay for itself in 3 years…

    • savage bargain on 12/12/2020 - 10:56
      +1

      So true about #1 - my family and I have had really good ex-demos.

      In terms of timing, if you can wait, watch ex-demos that fit the timing of #5 above. We tend to get really good deals waiting for a few months to see if any ex-demos sit around after the initial discount.

      (Caveat - I only buy manual/have nil interest in autos, and the manuals I tracked seemed to hang around longer than autos, so maybe that's why it's consistently worked for me.)

  • joshuatan87 on 11/12/2020 - 19:58
    +1

    I work in road safety education, so I'm going to attempt to answer your questions about buying a demo vehicle

    1. Demo cars are essentially used cars but they would have been maintained by the car yard. Comparing to buying it from a private seller, you've got a bit more 'reliability' and reassurance that it wasn't written off or stolen.

    2. It depends on your sales guy and the actual dealer. There are some great dealers out there and not so good ones too. If you do decide to buy from a private seller, consider a $2 PPSR check to see if the vehicle has been stolen, has finance owing on it or has been in a major crash.

    3. Rule of thumb is that everyday cars depreciate as they age no matter how new you buy them. Buying a corolla made recently has better depreciation value than a MG or a Proton. I would also consider checking out howsafeisyourcar.com.au to ensure that the type you want is the safest in its class. People usually don't think about car safety ratings and assume Corollas are good, so make this a priority as well.

    4. I've always bought my own vehicle with my own savings as I know that vehicles depreciate, but this is my own stance. Given the low interest rate released by the reserve bank, and that car loans are still at like 8%, I think any ozbargainer will tell you this is not a good deal :)

    5. Agreed with a previous poster, there is no 'best time to buy' - its all sales tactics.

    6. Buying from a private seller gives you the best chance of negotiating a better price. A dealer doesn't have as much wriggle room - but it all comes down to how generous your salesperson is feeling and how good you are as a negotiator. They may try to add a few extras (like window tint, etc) to sweeten the deal.

    Last but not least, check your contract with a fine tooth comb and bring someone objective with you as well. I know my state has no cooling off period for car purchases, but I know each state is different. All the best with your new car search!

    • ajas8 on 11/12/2020 - 20:03

      thanks appreciate it

    • brendanm on 11/12/2020 - 21:04

      consider a $2 PPSR check to see if the vehicle has been stolen, has finance owing on it or has been in a major crash.

      You don't consider a ppsr, you do it for every car you are actually interested in. I do it before even going to look at the car.

      Also, contrary to popular opinion, it doesn't tell you if it has been in a crash. It tells you if it had been written off. Cars are in crashes and not written off every day.

  • netjock on 11/12/2020 - 20:32
    +1

    2019 in 2023. 4 years into the 5 year warranty. Might be big bills coming for servicing etc.

    • ajas8 on 11/12/2020 - 22:02

      Yeah good point. So you think it would be better to spend a bit more or a newer year instead of buying older and spending more on servicing etc?

      • netjock on 12/12/2020 - 21:10

        2019 Corolla bog standard is probably $27k right now. Will probably be $20k in 2023. You might as well buy a 1 or 2 year old bog standard than an all optioned up with not much warranty left + big service coming.

  • Keplaffintech on 11/12/2020 - 23:16
    +1

    You can't really damage a car by 'thrashing' it on a test drive. The engine stays warm all day because it's going out for a drive every hour or so. Even if someone floors it around everywhere, the car is designed for that. You'd really have to intentionally try to break the car, and even then what are you going to do?

    The only 'thrashing' you need to look out for on demos are scratches, scuffs, and other cosmetic damage. A demo is not a new car and it's sold 'as is', so look carefully.

    The other downside to a demo is that you'll probably lose anywhere from 3-12 months of your new car warranty, as that ticks away from the time it was first registered, not when you buy it.

    • spackbace on 12/12/2020 - 16:34
      -1

      The other downside to a demo is that you'll probably lose anywhere from 3-12 months of your new car warranty, as that ticks away from the time it was first registered, not when you buy it.

      Not true, ACCC cracked down on that a few years ago. Genuine demos (and I don't mean the low mileage stuff sold on the used car lot), the warranty starts when it goes in your name.

      You lose out on balance of registration though, and capped price servicing starts when it's first licensed

      • Keplaffintech on 13/12/2020 - 20:48

        This is news to me! Aside from this announcement from consumer protection in WA, I can't see any other evidence of this. Can you point me to something in the ACCC?

  • WreckTangle on 12/12/2020 - 08:15
    +2

    Iā€™m looking to buy a fairly new car in 2046. Should i get a flying car or buy a teleportation machine?

    • holdenmg on 12/12/2020 - 09:03

      "Beam me up, Scotty" lol

  • Hithere on 12/12/2020 - 08:44

    Ask the Jetsons.

  • OzHunterNSW on 12/12/2020 - 09:49
    +1

    Demo does not mean demolition derby.
    People "test" drive vehicles for primarily FEEL.
    The days of hanging it out around the streets no longer exists.
    Remember, people have to bring these vehicles back … and they are inspected.
    The moment a vehicle leaves the lot, it depreciates immensely… so buying a demo is an excellent option.

    Buying a vehicle in the rage you suggest privately, forget it.

  • Waltervp on 12/12/2020 - 12:18

    Great to dream, and must have a specific car in your dream. I suggest you try not borrow money for a car, best buy with what you've got to spend. The one time I got a loan was for a 1 yr old Toyota Celica from a dealer when I was young. It was a 5 yr loan and when I sold the car 2 years later I still owed the bank thousands. I didn't like that of course, and never borrowed money for cars again. What I have done since is bought cars with money i had, saved more money, upgraded, saved more money, upgraded… this meant I had a nicer car each year and less costly repairs/maintenance. I would buy cars with newer tyres and longer rego…

    Buying new or demo i find too expensive, so I tend to buy 3yr olds or even older. Then you can afford to drive cars that would be $50k+ new for $15-$20k and you are buying cars you can read reviews about, know what is likely to go wrong, if people were happy with them… so you won't be stuck with a model that turns out to have expensive commom repairs for instance…

    Go to a car sales website and set a few alerts for cars you might like. Say Ford Mondeo Titanium, 2016+ under $20k, 50k kms… or whatever takes your fancy.

    Buying cars is fun! Selling cars is always tough :) Start in your budget! You can get great cars for $10k. Maybe set an alert for cars under $12k, under 100k kms, 2012+, 7 l/100km or better,…. any parameters that you like, and see what pops up.

  • SlartiBartFozz on 12/12/2020 - 16:59

    Demo cars are usually not so much worse than brand new, aside from a little mileage and possibly scratches. You save on waiting several more months for delivery of your vehicle if your chosen colour isn't already in the country, and you might get a good discount of the sticker price, but that depends on your negotiating skills, it's not guaranteed — most dealers will try to sell you a demo for a few $1,000 off the price, but you might be able to get closer 5-10% off the price.

    The important thing to remember when buying a car now (or in the near future) is Europe / UK is phasing out petrol and diesel powered cars over the next decade (varying depending on the country). That will mean a lot of those non-EV vehicles will increasingly be dumped in Australia and developing world, and there will a rapid slump in resale prices of vehicles in the years following. This is pretty much unavoidable, and even if you sell your car at 5yo you will start to see declining value — eventually this may flow back to new car sales prices, but that's not certain. There is going to be a huge shakeup in the car sales industry, what we have seen with Holden, Ford and Toyota is nothing compared to the inevitable arrival of ZEVs and autonomous vehicles, along with a growth in the manufacturer-buyer-direct sales model.

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