When buying a new car, the list price is only a starting point – it’s essential to factor in running, warranty and car insurance costs to know what you’ll really pay.
1. Know what model you are after but be flexible with the specs
Car dealers love buyers who have no clear idea what type of vehicle they are after. A good salesman can steer the buyer around the showroom and sell them a vehicle that has the best financial incentives for the salesman. Sales managers don’t like stock that hangs around too long, either, since its costs them money in terms of floor plan financing so not surprisingly they may be very keen to shift slow-moving models.
You can make this work in your favour if you know the exact make you’re after and the dealer’s stock controller had a brain fade and ordered a bunch of cars with weird colours. If you’re flexible with the specification level, colour and options, you could walk away with a better deal in financial terms than you would if you ordered a vehicle that’s not in stock.
2. How much are you ultimately paying? Manufacturers list price (MLP) or Drive Away?
There’s a big difference. Drive Away includes dealer delivery, registration and insurance, and is a much truer indication. Let’s use the Mitsubishi Mirage ES, an Australia’s Best Cars category winner as an example that has a MLP of $11,990. Indicative Drive Away pricing increases the cost of the Mirage up to $14,352.
Most drivers are opting for automatic transmissions and in the Mirage’s case that’s an extra $2000. If you don’t like white you need to add $550 for the remaining five colour options. Add $370 for comprehensive insurance and the $11,990 Mirage is closer to $20k than $10k and that’s without any extras.
3. Compare your price with another dealer
How new is your new car? Even if you are buying the ‘2015 current model’ buying in the early part of the year could mean that it was built in the previous. It doesn’t become an issue until trade in time, where the valuer will price it as a 2014, potentially losing you thousands of dollars.4. How much will it cost to keep your new steed in the drive?
Capped price servicing is becoming the norm but it is subject to variation and excludes items like brake pads and rotors, considered wear and tear items.5. How extensive is the brands dealer network?
It’s especially important in rural areas where if there is no dealer you may need to travel long distances for service and warranty.6. Take a proper test drive, not just a lap around the block.
You need to check things like seat adjustability and comfort, vision forward and rear and general ergonomics. Once you sign on the dotted line and drive out of the dealership it’s almost impossible to return it.7. Beware the extras trap
Many new cars in the showroom will be loaded up with extras or packs, and the temptation will be to go with them. On some premium brands the average spend on extras can be around $7000, that’s fine if you’re aware, but it could be a trap for some on a tight budget.
Compare finance deals offered by the dealer with other forms of financing. Just like housing loans there’s a multitude of options available to the consumer. NRMA car loans can help you with this.
8. Start your research with us
The NRMA has a long history of providing motoring advice and reviews on all types of vehicles and combine nationally with other state clubs for the Australia’s Best Cars awards program. You need to do your research if you want trustworthy after-care for your new car.
Our car service centres are a great place to start, the centres are authorised to service new cars, stamping the log book and upholding the manufacturer’s warranty.
