AE 401 – Interview: How to Buy a Car in Australia with James Buchan
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Today’s episode is the second half of the interview with James, my mate James, who was talking about cars in episode AE 393 – Interview: Rev-heads, Car Accidents, & Car Culture in Australia. So, James is back today, and he’ll be giving you guys tips and tricks for buying a car in Australia, what you need to know about searching for cars online, when you go and see the car what you should do, what you should look for under the bonnet, and then the process of getting that car bought and putting it into your name.
So, remember there will be a 5-10 minute lesson in The Aussie English Classroom that focuses on this episode. You will get a listening comprehension quiz asking you questions about what you hear as you listen to that excerpt, and you will also have an in-depth vocab list about all the more complicated vocab used in there. So, if you want to upgrade your English, if you want to learn more about Aussie English, then definitely sign up to The Aussie English Classroom.
Anyway, guys, without any further ado let’s get into today’s interview episode on buying a car in Australia with James. And to take us in, I thought it would be appropriate to play the sound of some V8 Supercar Ford and Holdens from Bathurst. Check it out.
I guess switching gears again.
If we now talk about purchasing cars and selling cars, do you remember the first car that you went and bought, and what it felt like to be, you know, a young Australian kid getting your first car? What was the process like to?
So, the first car I think I actually bought with my own money was a Toyota Soarer. It was a one of the V8 ones, so, they called that a UZZ31. This is an interesting one and I think this will be good for the podcast, because I made some mistakes buying this car, and hindsight and wisdom I would be able to inform a purchaser now a lot better, but I guess, you’ve got to go out there, you’ve got to make mistakes. Much the same as anything in life, you’ve got to learn. That crash, for instance, that we talked about earlier. Sometimes you need to make a mistake.
So, I went and saw the car, and everything looked alright, I guess, when you’re young and you’ve got a pocket full of cash and you see an object, you think well, yeah, you know, it’s it looks good, and I guess, you get carried away with the emotions in purchasing it. You know, I’m going to buy this. This is going to be me. I get to roll around in this. This is really cool. In my case, it was this V8 Soarer. It was packed full of leather and technology. It had like the TV screen, the touch screen. It had a really good stereo in it. (It) had a set of wheels on it. They were really heavy and they weren’t staggered, but they were a set of wheels, and to a young person that was pretty cool.
So, we went up and we just sussed it out, and it was a really warm sunny day, and everything was working. The air conditioning was working. The car was driving nicely. The owner had informed me that he just put a new battery in it, and I didn’t really think of… I just thought, well, you know, that’s a good thing, you know, a new battery. And I said, yeah, no, I’ll buy this car. And I think I paid $7,300 for it. And we had the paperwork. So, we got that from Vic Roads. So, you sign the paperwork, and then… so the owner of the car will put his initials on it, you put yours on it, and that basically transfers the ownership from their name to yours, which you would then take to VicRoads.
So, I purchased this car, and I remember, it took maybe about a week. So, I had a test drive first, came home, decided that I liked it. And then, (I) came up to Melbourne about a week or two later to pick up the car, and that was fine, and I drove it back out of Melbourne, and on the way down to Geelong I got a little message on the TV screen in the centre of the car, and it said an alternator… battery not charging alternator, alternator not charging battery. Like, okay, what’s that? Anyway, the closer I got to Geelong, the more systems started to shut down in the car. I’m thinking, well, this is not great.
Anyway, as it turns out, the design of that particular engine the 1UZ had the alternator above… had the power steering pump just above the alternator. So, what would happen is the power steering pump would leak and drop all its fluid onto the alternator, which would kill it. And so, when the alternator wouldn’t charge then it would just drain the battery. So, when the owner said I’ve just put in a new battery of course the car is going to drive fine with a new battery. You’re not going to know. So, perhaps I should have checked under the car for any, I guess, like puddles or any drips, look at the engine bay perhaps with a torch to see if there’s any moist damp wet spots. I didn’t do any of that. I just got carried away, because I thought that everything was working and playing with the buttons and the technology, didn’t really… didn’t really check to see what else might be broken with it. So, that was… so, on the second day that I had the car in my ownership. I then had to take it down to an auto electrician and get the power steering pump replaced, and get the alternator replaced. And that was a really expensive exercise. That was at least $600-700. And I haven’t budgeted for that. So, I regret that.
There’s a few things in that I unpack, I guess. So, for the listeners who are moving to Australia or currently living in Australia what kind of advice would you have for them from start to finish for purchasing a car? So, I guess starting with: where do you look and what do you look for?
So, there’s perhaps two main websites you could look for cars in Australia. Carsales.com.au, which is generally pretty good. Look, if you want to go to a dealer, you can, but you have to be prepared to pay their markups. They’ll be making a profit on it. Although, if you buy from a dealer, you’ll get some kind of warranty or recourse if something is to go wrong. So, buying a car secondhand inherently carries a little bit more risk if you do it through a private sale.
So, carsales.com.au, though.
That’s right. Yeah. So, that’s where generally that I would look. You’ll see if a car has… you can check out its specifications, its photos, there’s the owner’s contact information. And that’s one way of buying a car. It’s slightly perhaps a little bit more above board. And then, if you wanted to buy like a slightly cheaper car or you’re willing to sift a little bit… sift a little further through the website, you could use gumtree.com.au. I don’t think they’re searching or the way that the website is built is perhaps as good as Carsales, but you can find a car through there, and they can be another option.
And what would you recommend the car come with, or the kind of specifications, I mean, any other bonus sort of tips there for the kinds of cars you want and what you want to come with when you purchase one?
So, the first and foremost, really, you need a registration and roadworthy certificate. Roadworthy certificates, they’ve become a lot harder to find.
And harder to get.
And harder to get. A car these days, generally, if it comes with a roadworthy certificate, it generally means that it’s an alright car. You know, you’d need to get it checked out, obviously, and perform your own checks, but you can be assured at least that it’s been to a workshop and that they can guarantee that the tyres are good, the brakes are good, the steering is good, that you’ve got good wiper blades, there’s no oil leaks, just that basic kind of stuff. In the past, they were a lot easier to forge, but the Victorian Government has since been clamping down pretty hard on workshops that are hand handing out dodgy roadworthiness. So, they are a lot harder to find and get. And as a result, you’ll see a lot of cars for sale second hand without a roadworthy certificate.
And look, some of these cars can be an absolute bargain. If you’re willing to do the work, and let’s say, it might only need a set of tyres or set of brake pads. I guess, if you’ve got A. the time, or you’re B. mechanically competent, go ahead do that, but you really have to suss the car out and to know that it’s going to be okay, and then you’ve got to have the time as well to run around getting these things or to get them fitted, and how much is your time worth? Are you working? Are you studying? If you are, then you might not have the time to be able to go ahead and do these things, in which case you could pay a place to do this, but again, that’s going to cost a little bit of extra, and for all of the extra that it may cost you or for how much your time is worth, it just makes sense to get a car with a roadworthy certificate.
And you can kind of get caught and a bit of a trap, right? If you get on without a roadworthy, you’ve got about 30 days with the changeover in your name to get a roadworthy on it before it can be changed into your name. And so, however much money it’s going to cost to change the car, to fix the car, to repair the car, to get it into your name, you’re going to have to fork out…
…and pay for before you can legally drive it around or get insured and all of that, right?
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That’s right. So, a couple of years ago now my brother and I bought a Ford Falcon it wasn’t AU, and it was ex-taxi, the benefit of an ex-taxi is that you know that it’s been maintained. This thing had 700,000 kilometers on it.
To the moon and back.
My brother and I, we were looking for a car. We needed one kind of quickly. We sussed out one car and the owner said to us, “oh, look, it’s good, it’s got an exhaust on it”. We liked the look of it, but he said the gearbox is broken, one of the gears is broken in it. The car can’t do above 80 kilometers an hour. And I guess, when you’re travelling to the outback and you’re travelling large distances, Australia’s a big country, you kind of want to be able to go a little bit more than 80km/hr. So, for us, that was a no go.
So, we went and sussed out this AU Falcon in Templestowe. It was an ex-taxi, it was owned… it had been owned by this Greek guy, and my brother just looks at me and he says, do we go ugly early, James?. And I said yes, David we do, because you know what? We could spend a long time trying to suss out which cars are good, you know, sorting out if one has a roadworthy or a rego or does it… or if it’s maybe one of the later versions. But everything about this, I guess, it ticked most of the boxes for us. So, we decided that that was going to be a good buy.
That car had no roadworthy, but for our purposes we were only using the car for a weekend. We had it sort of like a little cheap car holiday.
So, we went up to the Outback in New South Wales. So, what we did was we purchased this AU. It didn’t need to have a roadworthy, because we were able to… we’re only going to be using it for a weekend. So, we were able to transfer the ownership of the vehicle into our name and we were able to get an insurance cover note that would cover us for those four days. At which point, once we returned, we would cancel the cover note, we’d sell the car.
And that’s exactly what we did. However, if you want to keep a car to use to go on holidays, to go on trips, you have 30 days, at least last time I checked, before you can get that… 30 days in order to get that roadworthy certificate, and get that into your name, and get the car registered and insured, and off you go.
So, I guess, taking it through the steps: get on either a Carsales.com.au, which you recommend first and foremost…
It seems to be a little bit more above board.
…and you can get it from dealers or private sellers…
…or you can go to gumtree.com.au, and also sift through that, but it requires a bit more work.
It requires a little bit more work, and I think the way that Gumtree’s website sort of laid out as well, I was searching for cars there the other day, and I set my range and I set my price, I typed in the model of car I was looking for, and I set it most expensive to least expensive, but I still got ads, because people want to lease their cars through there as well, and you can… you can weed that out in Gumtree, but it’s just a little bit more effort.
I guess, the benefit of gum tree though is that it’s free.
So, when you’re advertising a car there it’s free, whereas Carsales you’ve got to pay.
Hence the ads on Gumtree.
Alright. So, you’ve gone to Carsales or Gumtree, you found a car that you’ve liked, that looks good. Try and find one that does have a roadworthy certificate and rego on it already for as long as possible so you don’t have to renew that rego in the next week and for another year, ’cause the longer the rego the better. Alright, so you got those things down. Then obviously you want to contact the seller through one of these websites and just say, g’day, I’m just interested in purchasing your car. Do you have anything to add with regards to bartering and the price of the cars? Would you just walk up and be like, here, BAM! There’s what you’ve asked for? Or would you suggest aiming a little lower? And if so, how far is okay below the price they’re asking?
So, what I like to do is I like to go and suss the car, look at it. Have… knowing a little bit about cars, if I can see that something’s an absolute bargain already, and that they’ve already reduced the price enough, I’d like to use a little bit of intuition. Sometimes I can see that it’s a bargain, and you can say, alright, I’m not going to… not going to try and get any money chopped off the price here. it’s already a bargain for what they’re selling for so I just turn up with the cash nice and quickly, and get the deal done. Whereas, I guess, sometimes you might like to… the price that the seller has listed you can see as a starting point and try and negotiate them down a little bit. I like to… if it was me and I was selling a car, I would… let’s say, I want $7,500 for it, I might list it for like $8,200 knowing full well that when someone comes in and wants to buy the car and barter it, I’ve got a little bit of room to move. So, I’m happy to let the cargo for say $7,500 whereas I’ve listed it for $8,300. So, that’s the spot where I’ll let it go for.
However, if I’d just left it… advertised it for $7,500 that the buyer would want to come in and they would want to knock some money off it. So, they might be able to go in… they might want to knock it down a little bit more. So, I guess, you’ve sort of got to shift around and do a little bit of a dance in order to agree on a price. That’s always a good idea to try and negotiate if you can.
Another good step is never go and see a car at night.
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I guess that ties in with when you go and see a car what are the kind of things you’re looking for? And obviously, you need light to be able to do that. But what basic things can the listeners to this podcast keep an eye out for if they are just buying this car on their own?
Okay. So, obviously, you want to go and you take a look at the tyres. Make sure that there’s enough tread on them. You can see the wear markers and you can just basically use your fingers and put them through the great grooves in the tire to see that there’s enough tread on them. If they’ve got a roadworthy though, they should have roadworthy tread. So, that’s one thing. If you’re putting it into gear as an automatic, if it clunks into gear, that could be a problem with the transmission. You want to make sure that the brakes aren’t squeaking. You want to make sure that there are no leaks.
So, when you lift up the bonnet and you look at it, you want to also look below the car to see that nothing’s dripping onto the ground.
That’s right. Another sort of sign that something can be potentially dodgy is if you don’t inspect the car and it’s already warm or it’s already been running, because let’s say a car might be difficult to start, or a car starts running a little bit, let’s say, there might be like a metal on metal sound, or some kind of nasty noise that goes away once the car has warmed up, that can also be a tell tale sign that there might be an issue.
I think that’s something my dad had always said too. If you’re going to go buy a car, ask them not to start it and drive it that day so that you’re the first person to turn that car on and use it.
Yeah, that’s right. There are some cars that I’ve looked at and exactly as your dad was saying, you turn it on and you hear the car screeching for a while. It you might be a loose belt or a bearing might be gone. That’s that’s that’s a big no no. Well, proceed with caution, I guess, if the cars’s cheap and you’ve got a little bit of mechanical nouse??? about you, you might be able to factor that into the bargaining price.
Okay, gotcha. I guess, yeah and you could use… if you see any of these things, and you think, oh, I still want to take the risk, you can point them out and use that as a bargaining chip in order to lower the price at least a little bit with the idea or their suggestion that you might have to pay some money to then replace or fix this issue.
\Yeah. Another one is that some cars might have a slight oil leak. It could be coming from the sump. It could be coming from the cam covers. It could be coming from anywhere. In which case, let’s say the car has been sitting overnight, it would be dripping. But if the car… sometimes what some dodgy sellers will do is they’ll start the car up and they’ll move it to a different spot where it’s not leaking, and the car will be warm. So, that’s another thing to check out and just to make sure.
Okay. So, you’ve done all of that and you’ve decided, I’m going to pay this amount of money for it, you’ve bargained them down potentially or you’ve decided it looks like it’s in good nick, I’ll give you the whole price that you’re asking. What is then required? So, the seller’s gonna have some forms and what do you need to do with those forms as the buyer?
You can either pick up… sometimes, the seller should have these forms or this paperwork that they need from Vic Roads, which I guess, for those listeners from interstate or overseas Vic Roads is a road transport authority kind of group that organises car registrations.
In Victoria. It’ll be different for each state.
Yeah. So, there’ll be some paperwork from Vic Roads that, as a seller or buyer, you can go and pick up. The seller really should have it on them, but that said sometimes I like to go to Vic Roads and just pick up this paper work, just in case. And, I have a spare piece of paperwork in the glove box of the car when I go to buy it. You’ll agree. The price will be written down on this piece of paper. The seller’s information will be, there the registration of the car will be there. You will sign it. You will mention the price and there’ll be two copies. There’ll be… I believe there’ll be a carbon copy. So, there’ll be one for the seller of the vehicle, and then there’ll be one for the new owner, and… like a transfer form, and that’s what you’ve got to take into Vic Roads, and they’ll process that. You’ll pay stamp duty on that, which is the percentage of the car.
And you have a trick for saving a few hundred dollars potentially.
So, you could save some of the listeners a few hundred bucks if you guys are buying a car that’s at least relatively cheap.
That’s right. So, if you’re buying a new car, you’re buying a new Lamborghini, Rolls-Royce or a Ferrari, you’re going to be paying a lot of stamp duty on that. You’ll be paying luxury car tax as well. However, if you’re buying a second-hand car, especially, a cheaper one… for instance, there was a Toyota Soarer that I bought once, and I paid $7,500 for it. However, if the sale price had been listed at $7,500 that we had agreed on, on this transfer for, I would have paid 10% of that for stamp duty that the government gets.
So, you, instantly, when you go and change that over in your name at RACV, not RACV, at Vic Roads*, you have to pay 10% more to them, the stamp duty to the government, to get that car in your name.
…into your name. That’s right.
So, what’s the trick in order to avoid paying the full 10% of whatever you just paid for the car, especially, if you did it in cash?
So, if you’ve done it in cash, which I had done, I… the seller and I both agreed that what we would write down was something like $4,200 or thereabouts. So, it still looks… because, let’s face it, some Toyota Soarers are cheap, because they have been neglected. So, I guess, there’s a price band in which a car can be sold for, and that looked to Vic Roads that would look right. And so, we agreed on $4,200 on paper so that when the time came to hand that paperwork to Vic Roads…
You saved yourself $300 bucks or so.
Correct! By not listing the price as $7,500 but $4,200 instead. Made a lot more sense. There was a friend that had bought a new (Subaru) WRX on the same day that I bought my Soarer, and we were both in VicRoads, and he’d paid something like $30,000 for this WRX, and I remember, he was in a considerable amount of pain, financial pain I should add, knowing what he was going to have to pay in terms of stamp duty, and he was only ever so slightly envious of the fact that I had managed to sort of weasel my way out of a little bit of money.
So, I guess, that leads into the last point before we finish up. We might save selling a car for another episode. But, it’s also factor in how much it’s going to cost to pay for stamp duty, to pay for insurance, and to pay for any other potential repairs that might be needed.
So, if you save up say $3,000, probably don’t go out looking for a car that’s $3,000.
What would you suggest? How much reduce sort of leeway either side would you try and save on the side to pay for those things?
So, let’s say if third party fire and theft insurance, which’ll cover the other party, but not you. Let’s say that at most might be about $300 on say, let’s say a $3,000-$4,000 car, you might want to factor in up to about $500 maybe for any mechanical repairs that might be necessary. As much as we try and avoid any of that stuff when you’re going and buying the car, it might be just one of those…
It could break the next day by chance.
Yeah, by chance. I mean, lightning does strike, and accidents do happen. So, it’s always a good idea that as you’ve said that you’ve got a little bit of extra money up your sleeve, because you don’t want to say, have a budget of $3,000, spend the $3,000 on the car, for the next day for the car to break and you’ve got no money left, no money saved. That’s just not a good idea.
So, save a little bit of extra for insurance. Maybe save an extra say, $500 for an impossible mechanical repairs you might need. Let’s (say), using a $3,000 car as an example, like a Falcon, an old Commodore.
Try and save a bit of money with the stamp duty by first paying in cash, and then asking permission with the seller if you guys can just drop the price a little bit on paper. So, you still paid the amount, but on paper he’s written a lower number.
That’s right. I’ve done the same thing buying a few spare parts on eBay as well, from international sellers, and I think if it’s over a thousand dollars you have to pay GST on it. So, I remember, I bought a new turbocharger once. The seller, I didn’t even ask them, I was willing to pay the GST, because I just thought that that was what I had to cop. However, the seller… they had clearly been through this process before, and they wrote that the purchase price of this turbocharger was only $100 dollars. So, I avoided paying any GST.
That’s a nice a nice little tip for you.
Far out! Well, thank you so much for being on the podcast, James.
Not a problem. Thanks for having me, Pete.
No worries! There’s a lot of gems in there, guys. So, go back and listen and hopefully it’s helped if you end up buying a car, and hopefully, it avoids some headaches.
Alright! See you, guys!
Alright guys, I hope you enjoy that episode with James. Thanks again James for coming on the podcast.
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