Your Step-By-Step Guide To Buying A Used Car

Are you in the market for a used car but are afraid of ending up with a dud? A reliable second-hand vehicle can be a great budget-friendly alternative to a high-priced newer model. But, buying a used car can feel a little bit like making your way through a maze at times, especially if you are new to the process. That’s why we have put together this handy guide to walk you through the steps so you can make an informed decision and drive away with a vehicle that meets your needs and stays within the budget!

Step 1 Figuring Out What Kind Of Car You Need

Before you even start browsing online or visiting car dealerships, spending a bit of time thinking about what you truly need in a vehicle is important to avoid wasting unnecessary time and effort and to avoid being talked into buying something you don’t want. Your starting point on this one is to think about what you will actually use the vehicle for. It might be primarily for the daily commute to work, transporting the kids around their various afterschool activities, weekend adventures for the whole family, or transporting materials for work or recreation.

Whatever the need, your primary use will set clear guidelines for the size and type of vehicle you need (hatchback, sedan, SUV, ute, truck etc.). You will also want to take into account some basic logistics, such as the number of regular passengers and any additional features you might prefer to have (ground clearance, 4WD, parking sensors etc).

Step 2 Deciding On The Desired Safety Features

While second-hand cars may not be up to date with the latest technological advances or most modern features, identifying some of the safety features that are important to you will help provide a focus for your car hunt in a helpful way. What safety features are essential for you?

Think about things like ABS breaking, the number of airbags, Electronic Stability Control (ESC), fuel type/efficiency, parking sensors, air conditioning and visual displays and make a list of your must-haves versus nice-to-haves. You may end up having to compromise on your wish list, but at least you have clear intentions to work with moving forward.

Step 3 Setting The Budget

Now that you have a better understanding of what your needs are, it is time to set a realistic budget. Most people will put effort into settling on the purchase price - but this is not the only factor to consider here. Having a good understanding of ongoing costs like insurance, finance, registration, Warrant of Fitness (WOF), and even potential maintenance costs is probably more important in the grand scheme of things - especially with second-hand cars.

For example, purchasing a vehicle that requires tyres that cost $250 each or has excessive insurance fees might be of concern in the very near future! Some online research into various types of cars that match your needs will give a good idea of what the type of vehicle you are after will cost to maintain.

Step 4 Shortlisting Potential Vehicles

Once you have a clear understanding of your needs and budget, you can start narrowing down your options. You are going to want to start with online marketplaces such as Trade Me Motors, AutoTrader, and local dealerships, plus social media platforms like Facebook can be useful too. Filter using your search criteria based on make, model, year, mileage, price, and location.

Once you have a few makes and models in mind, delve a little deeper into real-world reviews and reliability comparisons with regard to fuel economy, common mechanical issues, safety ratings (ANCAP), and New Zealand-specific context. Websites like Driven.co.nz often have helpful reviews. This will help you create a shortlist of potential vehicles that fit your needs and budget.

Step 5 Choosing Your Preferred Seller

One of the main differences between buying a used car and a new one is that you have different options regarding who to buy the vehicle from. Each has its own pros and cons.

• Licensed Motor Vehicle Dealers. These guys offer a greater degree of consumer protection under the Motor Vehicle Sales Act (MVSA) which means if something goes wrong with your car after you buy it, you may be able to seek recourse through the dealer or expect the situation to be rectified at no cost to you (comes under warranty). However, for this associated risk, their prices will be a bit higher than those of private sellers. Cars must also have no debt before being sold via a dealer, and you should be able to access financing through dealer partnerships and even trade in your old car if you want to simplify the process.
• Private Sellers. Buying directly from the owner is a popular choice for those looking for bargain pricing as it’s usually cheaper than buying from a dealer - however, this is not always the case, so it pays to do your homework! You do have less legal protection when purchasing privately and will need to be more diligent with the appropriate vehicle history and mechanical checks. If you complete the purchase and find something wrong with the car a week later, it is unlikely you will be able to expect the seller to offer any help. Basically, unless the vehicle was intentionally misrepresented, any problems you may come across after you buy it will immediately become your responsibility. Getting a pre-purchase inspection is often the way to go if you want to minimise risks on this one.
• Auction Houses. Buying a car through a dedicated vehicle auction can be a great way to snap up a bargain, with some of the perks of warranties and recourse. This is because the auction house works as an intermediary between the private seller and the buyer. The drawback to vehicle auctions is that they often require on-the-spot decision-making which can be tricky, plus you will need to have done your due diligence ahead of time without knowing if you will be able to purchase the vehicle.

Step 6 Information Gathering And Inspection

Once you have your shortlist of cars, you may wish to contact the sellers and make some inquiries around the service history and any known issues. Also, to arrange an inspection time - never buy a used car without taking a good look at it first! Here is a handy used car inspection checklist for those who aren’t mechanically minded:

• Inspect the upholstery for wear and tear
• Check all the electronics (windows, locks, air conditioning, infotainment system),
• Ensure all seatbelts are functioning correctly
• Look for any signs of water damage or unusual smells (staining/mould)
• Check fluid levels (oil, coolant, brake fluid),
• Look for leaks
• Inspect the condition of belts and hoses
• Check for rust, water damage
• Ensure the spare tyre, jack, and tools are present and in good working order

Step 7 Taking A Test Drive

This one likely gets combined with your initial inspection, you will always want to take the car for a test drive before buying. A test drive is essential to assess the car’s performance and it also helps identify any potential issues (strange sounds, handling issues and more).

Drive on various road types (city streets, open roads, and hills if possible) to get a feel for the car’s handling, acceleration, braking, and suspension. Pay attention to any unusual noises from the engine, transmission, suspension, or brakes. Ensure the steering is responsive and doesn’t pull to one side. And last but not least, test out all of the air conditioning, heating, radio, wipers, lights, and any other features.

Step 8 Checking Out The Vehicle History

Once you have narrowed down your list to the point where you have a couple of serious contenders it pays to do a quick check of the vehicle’s history. This includes looking into whether the car has been involved in any reported accidents, checking for potential odometer tampering, ensuring the car hasn’t been reported stolen, finding out if there is any outstanding finance owed on the vehicle and looking into previous ownership details and any reoccurring WoF failures or registration gaps.

Online services like Carjam and MotorWeb provide detailed vehicle history reports in New Zealand and the Personal Property Securities Register (PPSR) government register allows you to check if there’s any security interest (like a loan) registered against the vehicle.

Step 9 Consider Getting A Professional Pre-Purchase Inspection (PPI)

Now that you have decided to buy a certain car, you are advised to get a professional pre-purchase inspection from an independent mechanic for peace of mind and to avoid costly surprises down the line.

Always choose a reputable mechanic to carry out your PPI, try asking for recommendations from friends or family or search online for local mechanics specialising in PPIs. Your mechanic will be able to provide a detailed report on the car’s current condition, highlighting any existing or potential issues. This report can be quite valuable, particularly if you are planning on negotiating the purchase price down.

Step 10 Negotiating The Price!

Speaking of which - it’s time to start negotiating! Based on your inspection, the PPI report (if you have one), finance options and the vehicle’s history, you can now make a decision on how much you want to offer. If you require a car loan, there are a number of options available, including car finance through private companies, dealerships and banks. What you choose will relate to your personal circumstances (see here for everything you need to know about car loans).

For best results, you should be prepared to walk away. This means you should not get emotionally attached to a particular car if the seller isn’t willing to negotiate fairly. Now is the time to use the information you have gathered to point out any flaws or issues to justify a lower offer. Be respectful but firm when making an offer, and always maintain a polite and respectful attitude.

Finalising The Paperwork And Payment

Once you’ve agreed on a price, it’s time to finalise the paperwork. In most cases, this will include a sales agreement outlining the price, terms of sale, and any conditions (or not if you are purchasing directly from a private seller).

Transfer of Ownership paperwork is also necessary to transfer the vehicle’s ownership into your name (in NZ, the seller is responsible for initiating this process), the NZ Transport Agency (NZTA) website has more information on this (the seller is required to complete a MR13A and the buyer a MR13B - these can both be done online).

And finally, making payment to the seller. For large sums, bank transfers or certified checks are generally safer than cash. Remember to arrange insurance before the pickup day, as you want it to be insured when you drive away!

Congratulations! You’ve successfully navigated the used car market in New Zealand. By following these steps, you can significantly increase your chances of finding a reliable vehicle that will serve you well on the road. Enjoy Your New Ride!

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