Top 10 Tips When Purchasing a Car

With winter fast approaching, the conditions on the road are becoming dangerous. So making sure you have the right car for the job, is essential. For some of us, our newly bought 2016 Hyundai IONIQ with an ANCAP safety rating of 5 stars might be fine, but for others, their not so reliable 1990 Mitsubishi mirage might not cut it. Yes, sometimes we need to make a change and put ourselves into the market of purchasing a new vehicle. Whether it be an old reliable runner or a classy top of the line head turner, we are bound to go through several cars in our lifetime, so we need to be OK with letting go.

We understand that purchasing a new vehicle is a big decision, so that’s why we have composed a top 10 list of things to do or at least take into consideration when purchasing a new or used vehicle.

Approach the buyer with money up front

Having cash on hand gives you a massive advantage as saying no to that can be tough for some sellers. If you can save up and make the payment yourself, then that’s great! But if you are in need of a vehicle sooner rather than later, then getting yourself a pre-approved car loan could be the tool for you. Having the finances first would give you more bargaining power, and for another bonus, you would find yourself getting cheaper rates and repayment options if you go to your local credit union rather than a car dealership.


Take a friend with you to inspect the vehicle

The trouble with used cars is the fact that you don’t know what’s happened to the vehicle in the past. Determining a vehicle’s past then becomes even harder to know when you have no idea how a car works, meaning you have no idea on what dangers to look out for. So if this is the case, make sure you bring a friend along who knows their stuff. Whether it be a friend, a family member, or someone you work with. As long as you have someone there who can ask the questions you wouldn’t know to ask or inspect the areas you never thought was an issue, you should be good.

Have a checklist sorted to assist with inspection

Can’t bring a mate? Well, make sure you read up on what to look out for yourself then. There is a lot to cover, and well you don’t have enough time to go pick up the trade and become a qualified mechanic. For an excellent checklist, we recommend the one supplied online by  NZ Transport Agency.

Understand your budget

When it comes to purchasing a vehicle, we will all set a budget and create a limit on how much we are willing to spend. Different people have different needs so realising how much your needs might cost, is crucial. If you are after a new off-road toy, then you will set your budget quite high as you will need extra room to cover any additional accessories or expected damages you might receive. If it’s a new car, you might get away with just the asking price. However, if it’s a used one you’ll need some extra money put aside for unexpected repairs you might need in the future.


There are plenty of fish in the sea, and there are even more dealers. Don’t be afraid to haggle the price and try to get it lower, as a seller/dealer knows that there are plenty of other vehicles out there for you. The amount the seller is asking for, is most likely well above what they would take. Don’t be fooled by the big sticker slapped on the windscreen or the price the private seller asked for in the post. They expect a bit of negotiating so go for it. This is where having your pre-approved car loan and cash in hand comes in handy.

Don’t mention trade in’s until the end of negotiating

OK, this follows on from our last point of negotiating, but don’t mention the fact that you are also willing to trade in your vehicle until you come to the end of your negotiating. We say this as most dealers will have a set point where they don’t wish to go below, however, if you inform them that you intend to trade in your current vehicle as well, their lowest price point might take your vehicle into, consideration and they might not go down as low. To put it in perspective;

The dealer’s asking price could be $14,000 but the lowest they might sell for could be $11,000. You tell them up front you wish to trade in your vehicle and they offer you $1,000 for it, the lowest they might go down to could be $12,000, meaning they still result in their $11,000 revenue. If we withhold from telling them until the haggling goes down to $11,000, we then can offer the trade in, and the vehicle goes for $10,000 saving you a whole $1,000.

Please test drive

This tip is straightforward, and most of us do take vehicles for test drives, but just in case, please take the car for a ride before you purchase it. You need to assess its comfort levels. But also if it is a pre-owned car, you need to see if it still runs well. All sellers/dealers shouldn’t have an issue with you test driving and well, if they do, it’s probably a sign that you shouldn’t be buying that vehicle.

Do your research

Whether it be on the vehicle or the dealer, find out what you are dealing with and what to expect. You should know the average going price for the model of car you are looking at purchasing. You should know its common faults, regular issues and areas of concerns you should expect. You should know this, so you know where to look as well as what questions to ask. Also if the car in question is a pre-owned used vehicle, having a quick look on sites such as CARJAM will allow you to check the vehicle’s history and see if it is stolen or has any ongoing payments needed for it. Research is critical so make sure you do it, find out about the sellers too, as any history you uncover could give you an idea of what to expect in the future.

Be careful of any contractual extras

It pays to read the fine print sometimes when getting into contracts with dealerships. Some dealers will pile on accessory after accessory, extra after extra, just to bump up the cost of the sale and improve their monthly figures. Be wary of this and stay alert to any extras they offer as some of them will get you into locked in contracts. Contracts like extended warranties that force you into using only their dealerships for services, or hidden upgrades or paint protectors that get added on after you make the purchase. Just say no to these extras as most of the time you won’t need them or can get them cheaper elsewhere.

Distinguish what you need in your vehicle

Be real with yourself and figure out what you need and not what you want. Sure getting an exotic sports car might be fun, but getting home and having your wife and three kids staring at you wondering how they are all getting to sports practice tomorrow won’t be. Determine what you or your family needs in a car and go after that. Is it a people mover? A cheap runner? Or a tiny hatchback so you can find a park in town? Figuring out what you need and sticking to it will help prevent you from making any impulse decisions that you will regret later down the road.

We hope you found our tips on purchasing a car helpful. If you have any questions about getting a pre-approved car loan, check out our website or take a look at our

Loan calculator where you can get a kick start to planning your financial future.