Buying a Car in Australia
Buying a car in Australia is likely to be one of the larger and more daunting investments that an expat will need to make upon arrival. Although this process is not significantly different from that of other Western countries, there are, inevitably, some local idiosyncrasies that must always be negotiated.
In total area Australia is on par with the continental United States, but with less than a tenth of the population. Consequently, a vehicle is often a practical necessity due to the vast distances in between populated areas. Only in some limited cases, such as in urban areas with good public transport, is going without a vehicle a good idea, and limitations to recreation and personal travel can be significant. Transportation is often the first, and most important, purchase a new resident can make (after accommodation), and will have a major impact on any temporary Aussie’s experience while ‘down under’.
Finding a car for purchase in Australia
The first step in any vehicle search is knowing where to look. Whether buying old or new, due to Australia’s large geographic land mass and often sparse population density, the Internet is the best place to begin a search. Various websites provide opportunities for both dealers and private sellers to list their inventory with prices, photos and details.
The digital marketplace also allows buyers a certain degree of price comparison and transparency, and thus buying a car ‘sight unseen’ is not uncommon. If this choice works, there are even often transportation options for delivery.
As in many other countries, car dealerships tend to locate themselves on the outskirts of central business districts due to the large lot sizes required to accommodate a large stock of vehicles. Although this often results in access challenges, a dealer with large stock provides greater options. The best plan is to use the Internet for research, and then arrive at the dealers with a plan, details on the cars one is interested in on their lot and a virtual guarantee of getting a good deal.
Buying from a dealer versus a private seller
Typically great deals can be had by purchasing a vehicle privately, but for the new Australian resident a dealer might be the preferable option. Dealers handle registration paperwork, roadworthy certificates and often include warranties that cover the purchaser for a period of time after driving away. Having said that, a private vehicle sale can result in getting much more ‘bang for one's buck’, giving the new car owner a vehicle that might have otherwise been out of their price range.
For those more mechanically inclined, a private car sale might not be intimidating, but a purchaser must be ready to attend to all paperwork required to complete the transaction. Be sure to receive a roadworthy certificate, receipt of sale and a valid registration. The Vehicle Identification Number can be checked online at carhistory.com.au for a small fee.
The process of buying a car in Australia
Expats should expect to pay more for a vehicle in Australia than in, say, the United States, but know also that negotiation is an important part of the buying process; a point that applies to those buying from a dealer and those buying from a private seller.
Both types of sellers will often be willing to haggle over the final price of a vehicle. As a useful rule of thumb, one should consider opening the bidding by knocking at least 10 to 15 percent off the marked price when beginning the negotiation.
Dealers in Australia also often raise the marked price ‘on the lot’ from the published price on the Internet, so be sure to bring along a printout of the car one is interested in, and negotiate from the online price. They will also often “sweeten the deal” with additions, like cruise control installations, roof racks and other optional equipment.
It’s also useful to know that purchasing a vehicle in rural Australia often results in the cost being higher than in metropolitan areas; although, with the advent of the Internet this trend seems to be diminishing. All things considered, don’t count out rural car yards, a dealer in a rural setting might be more willing to work for one's business than a dealer in a larger car yard with a plethora of business on their doorstep.
Advertised car prices and those costs quoted by a private seller do not include several surcharges, such as registration transfer fees (for a cars bought through dealers) and stamp duty.
Stamp duty is a government tax and varies based on the state in which one registers and the cost of the vehicle. The Internet hosts an assortment of calculators and tables allowing a person to approximate the cost of stamp duty, be sure to incorporate these additional costs into the eventual cost of the vehicle, as they can, and do, amount to a significant sum.
Registering a vehicle in Australia
Once bought, a vehicle must be registered. Vehicles are registered in their owner’s state of residence, and are overseen by varying state agencies. One does not need to register a vehicle in the state in which it was purchased.
- Victoria - www.vicroads.vic.gov.au
- New South Wales – www.rta.nsw.gov.au
- Queensland - www.tmr.qld.gov.au
- South Australia - www.transport.sa.gov.au
- Western Australia - www.transport.wa.gov.au
- Tasmania – www.transport.tas.gov.au
- Northern Territory – www.nt.gov.au/transport/mvr
- Australian Capital Territory - www.canberraconnect.act.gov.au
Registration requirements vary between the states, but generally involve identification documents (passport) and a driver’s license (be sure it is an English language one or an international driver’s license), receipt of sale and a roadworthiness certificate.
Beware any car sale that does not include a roadworthy certificate. Most advertisements will actually itemise when the current certificate expires, such is their importance. Without one, any purchase may result in considerable expense – as there may be large improvements that need to be made in order for the car to pass inspection.
Registration will also require a permanent address within Australia, which sometimes makes an advance purchase difficult; however, international companies and hostels often assist with the establishment of a postal address for such situations.
Car insurance in Australia
Insurance must also be maintained for any vehicle on Australia’s roads, and like any developed nation, Australia has an advanced insurance market with multiple options available.
One can expect to pay between 600 AUD and 1,000 AUD annually for a comprehensive insurance policy. Claim-free periods are awarded with reductions of the annual premium but, as in other countries, expect any claims to be accompanied with substantial increases in one's annual payments. Third party insurance is available for owners who are not concerned about the loss of their own car, and is a requirement by law. It is a legal offense to operate a vehicle without the appropriate insurance and stiff fines await those willing to risk it.
Financing a car in Australia
Alternative and worthy options to the traditional purchase or lease exist within Australia, and expats in the midst of negotiating an employment package should take these into consideration.
Many companies provide a "novated lease” for employees through their salary sacrificing benefits. This ‘lease’ is essentially a three-way agreement between an employee, their employer and a financing company. It allows the employee to pay for the cost and operation of a vehicle before tax, thereby lowering the employee’s taxable income.
Besides the income lowering factor, the cost of operation under such a lease includes maintenance, fuel, repairs, registration and insurance - making this opportunity very attractive. The responsibility of such an opportunity lies with the employee, however, and needs to be followed up with a company’s human resources department.