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The Ultimate Guide to Buying a Car in Perth

The Ultimate Guide to Buying a Car in Perth

Buying a car is a big investment requiring careful thought, realistic budgeting, and patience. 

Check out our ultimate guide to buying a car in Perth so you can browse the market with confidence backed with knowledge. 

What is the process of buying a car in Perth?

Follow these steps when buying a car in Perth so you don’t miss any details throughout your purchasing journey:

  1. Set a budget
  2. Decide on the car type
  3. Look for a car dealer or seller
  4. Inspect the car
  5. Check warranties
  6. Sign the contract

1. Set a budget 

A set budget is essential in buying a car so you don’t go beyond your means. Take a good look at your current income and compare it with the prices of the cars on sale. 

You should also consider factors such as maintenance, petrol, and insurance, as these can greatly affect the real cost of buying and owning a car.

What should my budget be for buying a car?

The rule of thumb in buying a car is to allocate not more than 20% of your income for the entire purchase. If you make $80,000 per year, spend around $16,000 on a vehicle purchase.

This limit is to prepare yourself for costs that continue after you bring the car home such as maintenance and insurance.

Also, be accurate about how much your disposable income is. Establish your regular budget first, which should include mortgage or rent, utilities, groceries, medical expenses, discretionary spending, and other debts.

After subtracting the regular budget from your take-home pay, the remaining amount should be your disposable income for a car.

What are the costs associated with a car?

What are the costs associated with a car

You will shoulder a number of expenses after your initial car payment. These associated costs include repayments (if you bought your car on loan), registration, car insurance, maintenance, roadside assistance, and fuel.

Most of them continue until your vehicle retires, so ensure that you’re earning enough to cover the regular costs.

ExpenseDescriptionPrices in AUD
Car loan repaymentDependent on terms*
We recommend paying no more than 48 months
$128 weekly average
RegistrationDependent on car weight– Recording fee: $10.30
– Light vehicle (not exceeding 45,000 kg): $6.38 – $76.56 per 100 kg
Car insuranceDependent on terms$25 weekly average
MaintenanceIncludes repairs and services$30 weekly average
Roadside assistanceUsually comes in an annual assistance plan$69 – $360 annually
FuelCan be petrol or electricity– Petrol: $69 weekly average
– Electric charge: $11.70 – $28.37 weekly average 

Is it better to get a used car than a new car in Perth?

When choosing between a used car and a new car, you should consider how much you want to spend and your preferred vehicle’s quality. 

A secondhand car works if you want a vehicle for cheap and don’t mind the extra effort you need to inspect and maintain it. On the other hand, a new car is better if you prefer not to worry about damages and need a full warranty.

Used Car– More affordable
– Slower depreciation rate
– Requires more repairs, resulting in higher maintenance costs
– Outdated technology
– Doesn’t always come with a warranty
New Car– Full warranty
– Fewer repair and maintenance costs upfront
– Comes with the latest technologies
– Pricier
– Quicker to depreciate

Used cars are so cheap that prices can go almost 50% lower than new vehicles. Moreover, you won’t have to worry about depreciation since you’re buying an older vehicle; new cars experience a sharp drop in the first three years.

Tips for Buying a Used Vehicle

Tips for Buying a Used Vehicle

It is important to ensure that the used car you’re looking to purchase is still in good condition. You can do this by taking the vehicle on a test drive, hiring a qualified mechanic to inspect the car, and inquiring about the car’s history.

Also, ensure that there are no debts on the vehicle by obtaining its chassis or vehicle identification number (VIN) and checking out the car’s Personal Property Securities Register (PPSR). 

2. Decide on the car type 

After deciding whether you’d buy a brand-new car or a secondhand one, it’s time to determine the specific brand, make, and model to purchase.

How do I choose the right car for myself?

Before looking at the choices available, create a checklist of what features you need for your car. Learn to differentiate these needs from the “would be nice” features and list them by priority.

On top of your list might be 4WD capabilities and ABS brakes. The latter part of the checklist might include a sunroof and motorized cup holders, features that you can go without. 

Also, consider your purpose for buying a car. If you want to drive around Perth for work and errands, you need a different vehicle from one that will help you conquer the Australian Outback.

3. Look for a car dealer or seller

Once you’ve locked on the car type you want, consider looking for dealers, auctioneers, and private sellers who offer the vehicle.

Tips for Buying from a Car Dealer in Perth

Tips for Buying from a Car Dealer in Perth

Buying a car from a dealer is advisable if you want some help with the paperwork, as they are willing to do the task on your behalf.

That said, you as the buyer should have full control over your purchasing decisions or risk being swept away by sweet and convincing sales talk. Here are some tips to keep you grounded.

  • Familiarize yourself with car pricing. Understand the difference between the invoice price (the amount the dealer pays the manufacturer) and the sticker price (manufacturer-set retail price).

The aim is for you to pay for the car at an amount as close to the invoice price as possible.

  • Visit multiple dealers. Check out at least three dealers and ask for a quote from each. Pick the dealer with the lowest quotation and see if the other dealers can price match. 
  • Be flexible. Don’t let the dealer know that you badly want that particular car. They can leverage that fact to pressure you into buying the vehicle, sometimes at a price that’s not the best value for you.

Allow flexibility by opting for a different color or doing away with some features. The goal is for you to save as much money as you can.

  • Don’t get swayed by low monthly repayments. Most car loan terms are stretched for up to seven years, creating the illusion that you’re paying less each month. But the interest rates say otherwise.

Try keeping the loan term shorter, ideally repaying within about three years. Doing so will help you save in the long run.

Can I negotiate car dealer prices?

Negotiating the car price with a dealer is doable, but you have to be well-prepared if you want to succeed in getting the best value. 

We recommend that you visit the dealer when you’re already certain about your chosen vehicle. This way, your transaction will be more focused on negotiating the price.

Also, focus on getting the total purchase price and try negotiating with that as your basis. You don’t want to refer to the monthly payments, as they don’t show the actual cost of buying the vehicle.

If you already have financing, withhold the information at least up until you’ve managed to negotiate a lower price. After all, many dealers won’t agree on a cheaper price tag unless the financing will be through the dealership.

Tips for Buying a Car at an Auction in Perth

Tips for Buying a Car at an Auction in Perth

Another way to purchase a car is by transacting with dealer-auctioneers. It’s quite a popular option since you can get reliable cars for cheap. 

But since cars sold in auctions come “as is,” you risk ending up with a vehicle that’s not worth even the affordable price.

What should I know before buying a car at an auction?

You should know that buying a car in an auction means you’re subjecting yourself to a rapid-fire environment and that you can get swept away by the thrill of it. That is, of course, if you come unprepared. 

Fortunately, you can equip yourself before joining in the fun of bidding.

  • Consider watching other bidders first. Go to a few auctions and observe how the bidders do it before participating yourself. 

These visits can teach you a lot and can help you pick up strategies you can use and suspicious behaviors you need to watch out for.

  • Check the prices. Know the true worth of the car you’re aiming to buy and bid using that price as your threshold. Also, avoid going over your budget when you’re already bidding! 
  • Know the car’s condition. Your target vehicle should come with a full condition report and a roadworthy certificate. Walk away if the auctioneer does not have either of these two. 

What are the disadvantages of buying a car in an auction?

One of the disadvantages of buying an auction car is that a test drive is not often possible. You risk obtaining a vehicle that has problems you can’t determine by just looking, which can incur expenses on repairs. 

Relatively, you can’t return the car once you bought it, even after finding out that the vehicle is in bad shape.

Also, buying a car from an auction has a lower resale value, so it isn’t practical if you’re looking to sell your vehicle later.

Tips for Buying a Used Car Privately in Perth

Tips for Buying a Used Car Privately in Perth

Buying a used car privately is certainly cheaper than getting one from a dealer. But with affordability comes risks including the vehicle not being covered by a statutory warranty, money owing on them, or being stolen.

One way to clear your doubts is to do a PPSR check to learn a bit about the car’s history.

4. Inspect the car

Buying a new car means less worry about its driveability, but the same is not applicable to used cars. If you’re set to purchase a secondhand, dodge a lemon by following some of these tips.

Tips for Pre-Purchase Vehicle Inspection in Perth

One convenient way to inspect a car before buying it is to hire a qualified mechanic. That said, it won’t hurt to educate yourself on the hows of an inspection. 

Getting an idea about what to check will help you develop a discerning eye and will boost your confidence when choosing from a wide selection of vehicles.

  • Inspect during the daytime. It’s easier to spot scratches, dents, and panel work when you’re looking at the car in broad daylight.
  • Look under the hood. Check the belts for wear and tear, look at the oil by pulling the dipstick and ensuring it’s not blotchy, and check if the transmission fluid has a clear red color.
  • Press and pull dials. See if the buttons or knobs for the radio, air conditioning, heat, and other features are working.
  • Test the doors. Watch out for alignment issues and rust.
  • Check the tire condition. Look at the tires and see if they have unevenly worn-down treads. If they do, the vehicle might have suspension issues.
  • Check the car’s interior. Move the seats and rearview mirror, adjust the steering wheel height, buckle the seatbelt, and test out safety features such as cameras and sensors (if any).

How much does a pre-purchase vehicle inspection cost in Perth?

A pre-purchase vehicle inspection in Perth can go anywhere from $130 to $300. The exact cost will depend on the service provider and the extent of the inspection.

Keep in mind that a pre-purchase inspection is different from a roadworthy inspection, with the latter required annually for registered vehicles in Australia. 

5. Check warranties

Check warranties

There are warranties you can take advantage of when buying a car in Perth, whether you’re purchasing a new or a secondhand vehicle. 

Ensure your car is covered by a warranty to save money on parts and labor should any defects appear within the guaranteed period. 

Even vehicles bought from private sellers can have some form of warranty if the seller chooses to transfer them to you.

What is a statutory warranty on a car in Perth?

A statutory warranty on a car in Perth is a government-imposed warranty that all dealers, especially those who sell used cars, should adhere to. The secondhand vehicles covered by this warranty are those

  • Paid for $4,000 and more
  • Not more than 12 years old
  • Traveled not more than 180,000 kilometers at the time of sale

A statutory warranty requires the dealer to keep the used car roadworthy or serviceable through repairs.

Keep in mind that the defects covered by this warranty are limited.

Covered by the used car warrantyNot covered by the used car warranty
– Seat adjusters, mountings, and seat belts
– Speedometer
– Windscreen wipers and washer (not blades)
– Heater demister and fan
– Engine defects and serious soil leakage
– Radiator leaks, hoses, and fan belts, core damage and blockages
– Defects and oil leaks in gear box or automatic transmission
– Brakes, leaks, and serious wear
– Serious structural rust in the subframe, roof, rocker panels, door pillars
– Doors
– Side windows
– Surface rust- Odometer and fuel gauge
– Stereo, radio, and airconditioning
– Battery
– Light globes
– Tires, wheel balance, and alignment
– Spare tire, jack, and brake
– Damaged or faded paintwork
– Rear demister
– Damaged or thorn upholstery

New Car Manufacturer’s Warranties

A new car warranty allows new car buyers to have some form of guarantee from the manufacturer against possible vehicle issues.

This promise is usually available for a limited period of time and, just like used car warranties, does not cover every possible defect.

How long is a new car warranty in Perth?

A new car warranty (also called a manufacturer’s warranty) can last up to five years or 100,000 kilometers of distance traveled, whichever comes first.

The warranty will include requirements in its terms and conditions that the owner should follow to avoid invalidating benefits. 

6. Sign the contract

Sign the contract

Signing a contract formalizes your car purchase in Perth and binds you with the dealer’s conditions.

That said, you have to ensure that you’re ready to buy that car before you sign the document, as there is no “cooling-off” period for vehicle contracts in Western Australia. 

The only time when you can change your mind is before the dealer signs the contract or informs you that they accept it (but it does not take that long for them to do so).

Before signing, make sure that your and the dealer’s rights and responsibilities are clearly defined in the contract. Also, review the finance clause, terms that describe when termination is possible, and clauses about price increases.

When is the best time to buy a new car in Perth?

The best time to buy a new car in Perth is when deals and sales abound, which usually happen at the end of the financial year, end of the calendar year, end of the month, or when models are updated.

That means you can expect to grab cars for a cheaper price at the end of June, in December, or after you get your monthly payslip.

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