The complete guide to buying a used car in New Zealand
If you’re buying a second-hand car in New Zealand, you’ll probably want to find the best deal you can. But you’ll also want to avoid buying a lemon. Nobody wants a car deal that leaves a sour taste in their mouth.
Choosing the best type of car for your needs
Before you start looking, it can be a good idea to think about what you really need from a car. Getting this right could save you a lot of money in the long run and ensure your car works well for you and your lifestyle.
For example, if most of your driving will be to and from work or around town, you might be better off with something that’s economical to run and easy to park, rather than a big SUV for the few times you might go camping.
If you regularly transport children, carry bulky sports gear or tow a trailer, then you might need a car with the space and power to match. People who drive long distances on the open road every week often like a car with cruise control. And if you tend to park on the roadside in a city, you might feel more relaxed if your car isn’t too upmarket, perfect and expensive to repair.
Everyone’s lives are different, so the idea is to focus on what you really need in a car, rather than what you might want.
Finding the best models for your type of car
Once you’ve settled on the type of vehicle you need, the next step might be to make a shortlist of the best makes and models in that category. To decide which ones suit you best, you can look at things like safety ratings, upfront cost, running costs and how well they hold their price.
A good place to start is the New Zealand government’s website, RightCar.govt.nz. This lets you select things like vehicle type, safety rating, fuel type, manual or automatic, engine size and so on, you can find out more on RightCar here. You can then sort your list by driver safety or fuel economy ratings, adding vehicles to a saved list as you go. There’s also a more detailed page on each vehicle that includes information like its annual licencing fee.
Reading independent reviews
A number of publications write comprehensive reviews of cars, particularly the newer models. One way to find them is to Google the name of a model you’re interested in. To get New Zealand reviews add the letters ‘nz’ to your search term. Chances are you’ll come across review sites like Driven, Autocar, Autotrader, Stuff, NZ Herald or Drive Life. For overseas reviews, check out the Top Gear website. The reviews you find can help you prioritise or narrow down your shortlist of possible cars to buy.
Finding which models you prefer
Armed with a shortlist of cars that suit your needs and rate well for the features that are important to you, it’s time to start looking. That means visiting car yards that have the models you’re interested in, but with no intention of buying yet. Making a list of the things you want to check and keeping a note of the outcomes can save you time and help make your final decisions easier. Everyone’s checklist will be different, however here are some ideas to consider:
- Luggage space dimensions - will your suitcases, sports gear or pushchair fit in easily?
- Driving comfort - are the seats comfortable to sit in, is it easy to get in and out, can you reach the controls easily?
- Rear seat comfort - is there enough leg room and head height for the passengers you’ll carry?
- If you have small children, are there easy connections for your car seat, is the rear door opening a good size for loading and unloading littlies?
- Driving safety – do you have good all-round visibility while driving, does it feel safe to drive, accelerate well, stop easily and handle uneven roads? How does it feel while cornering?
Setting yourself a budget
To set a car-buying budget, many people look at two areas - immediate cost and ongoing expenses. The immediate cost will depend on whether you pay cash upfront or go for a finance option. If you’re considering finance, be sure to focus on the total cost of payments over the term of the loan. This can be a lot more than the cash price, and by the time you’ve paid it off, your car will have lost a lot of its value. The newer the car, the more value it will lose each year. Cars that are about seven years old sell for roughly half their new car price.
Apart from the initial cost, it also pays to choose a car that you can afford to keep running for the years to come. Regular ongoing costs to consider include fuel, vehicle licensing (rego), insurance, parking, WoF, servicing and repairs, tyres and road user charges if you choose a diesel. Some of these costs are the same for all vehicles; others (like fuel use, servicing and tyre prices) depend on the type of vehicle.
Once you have your budget sorted and finance arranged, you’ll be ready to shop with confidence and grab a good deal if you see one. Good deals usually sell quickly, so being ready to react quickly will help avoid disappointment.
Deciding whether to buy from a dealer or privately
A dealer will probably charge more for the same car, but you get some protection in return - if there’s a problem with the car during the warranty period you can get something done about it. This might involve fixing the problem, replacing the car with an equivalent one or giving you a refund.
If you buy from a private seller, they have no obligation to do anything about problems that arise after the sale. You’ll have to fix them yourself.
Buying from a private seller
Here are some of the risks to be aware of, so you can take steps to avoid them.
- The car may have done more kilometres than its odometer says.
- It may have expensive problems that the seller is not telling you about.
- It might be stolen, which means you could lose it and potentially be charged with receiving stolen goods.
- There might be money owing on it and the financer could repossess the car to recover what is owed.
Here are some tips you might consider when buying from a private seller:
- Take someone with you who knows about cars and has good common-sense.
- Meet at the seller’s home, so it’s clear they don’t mind you knowing where they live.
- If buying from Trade Me, look for verified sellers and people with positive reviews from previous sales.
- Keep a copy of their advertisement and ask them to confirm any other details by email.
- Before buying, check the car out on a site like CarJam. For a small fee you can get a comprehensive report on a car’s ownership history, whether there’s money owing and a market valuation. The government’s PPSR website also lets you see if there’s any money owing on the vehicle and the NZ Police website lets you check whether it’s stolen.
Finding a genuine car dealer
All motor vehicle dealers in New Zealand have to be registered, either as a company or an individual. You can check if someone is a registered dealer for free. Simply go to the online Motor Vehicles Trading Register and enter their name or address.
To check on a dealer’s reputation, you could search online for customer feedback on platforms like Google and Facebook. You could also ask friends and family about car dealers they would or wouldn’t buy from again.
Looking at cars imported from Japan
If you’re looking at a car that’s just been imported from Japan, ask to see the auction sheet. While this will be written in Japanese, a box at the top right will have a number in it and a smaller letter beneath. The number represents the overall condition, ranging from 5 for near-perfect condition to 1 for very bad condition. The smaller letter describes the interior condition ranging from A for as-new to D for the lowest grade. Some auction sheets have two letters - one for the exterior and one for the interior. In the bottom right corner of the sheet you’ll see a diagram of the car’s panels with any defects labelled with letters. You can look at the car to see how bad they are or, if you Google ‘how to read a Japanese auction sheet’, you’ll find explanations of the letter codes used. The auction report should only be treated as a guide, as it’s possible for an unscrupulous car dealer to create a digital copy and alter it.
Check there is a Consumer Information Notice (CIN)
Motor vehicle traders (car dealers) must clearly display an A4-size CIN for each vehicle. If they’re selling online, there must be a link to the CIN. This gives you a standard set of basic information about the vehicle, including:
- The total price including GST.
- Whether there is a security interest (money owed) registered against the vehicle.
- The make, model, year and distance travelled.
- The VIN or chassis number.
- Whether it has a WoF and licence (rego) and their expiry dates.
- The registration plate number and year it was first registered in New Zealand.
- The type of fuel it uses and whether it’s subject to road user charges.
For imported cars the CIN must also include:
- What year it was first registered overseas.
- What country it was last registered in before coming to New Zealand.
- Whether it had any recorded damage when it was imported.
If you agree to buy the car, the dealer must give you a copy of the CIN immediately before the sale.
Taking a car for a test drive
Here are some things to consider when looking at a car you think you might buy.
Before you go, Google the make and model to find out about any known faults or defects, so you know what to look for. Viewing a car in daylight and dry weather makes it easier to see everything clearly. If it’s an older car, you could ask the seller to ensure the engine is cold when you arrive, which will allow you to check how well it starts and runs before it warms up.
Before driving, ask to see the service record, then check the warrant of fitness and registration expiry dates. Also check the tread depth on the tyres and look for uneven wear. Look for signs of oil or fluid leaks under the car.
Consider asking the seller to take you for a drive first. This lets you focus fully on the car and how the seller tends to drive. If they accelerate and brake heavily, you might expect more wear on the brake pads. Listen for unusual noises, and use your hands and feet to feel for excessive vibrations.
When it’s your turn to drive, be sure to include some time on the motorway or open road. As you bring the car steadily up to 100km/h, watch for any speed-related vibrations and wobbles. Include a winding section of open road to see if the car handles corners correctly. Test the brakes with continuous gentle pressure, as well as more sudden braking. Find a safe place to turn the car slowly at full lock, both left and right, listening for unusual noises. Drive the car in reverse and try parking it to ensure the all-round visibility is good enough for you.
When you finish the test drive, park the car on concrete so you can check for leaks when you eventually get out. Keep the engine running and check that the heating and air-conditioning work well. Try the stereo, interior lights, electric windows and all other electronics to ensure they’re working. Make sure seat belts are in good condition and operate as they should. Keep your emotions under control by trying to not be overly critical or appear too keen.
Even if you are keen on buying the car, it can be a good idea to go away and have a think. You can discuss it with your support person and see how it compares with other cars you’ve inspected.
Buying the car you’ve chosen
Once you’ve found a car that you’d like to buy, it’s time to agree on a price and possibly get it checked by an independent expert.
Before you agree on a price, it helps to have a good idea of the car’s market value. You’ll probably have a reasonable idea of asking prices from looking at identical cars in similar condition online. But cars seldom sell for the asking price, so don’t be shy about bargaining. You might find it useful to have an independent valuation. This can be done online through the Redbook website. For around $20 you get a detailed valuation certificate based on the car’s year, kilometres travelled and condition. This not only gives you more confidence when bargaining, you can also show the certificate to the seller if they’re reluctant to meet your final fair price. Remember to make your first offer lower than you are prepared to pay, so there’s room to increase your offer if required. If you’re not comfortable bargaining, ask a friend or family member to bargain for you up to your limit. You could also practice bargaining beforehand. Role play time!
Unless you’re a car mechanic, it may be a good idea to have the car independently checked by VTNZ or a local garage. Even if no major faults are found, many people feel the check is worthwhile just for the peace of mind. If faults are found in the check, you can always ask the owner to get them fixed or negotiate a lower selling price.
If you end up buying the car, be sure to arrange insurance before taking ownership. This can usually be done over the phone. It helps if you’ve already done your research to find the best insurance deal for your needs. As soon as possible, you are also legally required to let NZTA know you’ve bought the car. The seller also has to let report that they've sold it. You can do this on the NZTA website or by completing forms and paying the small fee at an NZTA agency. To protect their liability for things like speeding or parking tickets, the seller may want to see evidence that you’ve done this before you pick up the vehicle.
Getting your car insured
AMI offers a range of car insurance policies to meet your needs.
- Full Cover - Covers your car for accidents, theft, fire, vandalism and storm damage. Plus we cover damage to someone else’s car or property.
- Third Party, Fire and Theft - Covers you for fire and theft of your car, plus damage you cause to someone else’s car or property.
- Third Party - Covers you for damage you cause to someone else’s car or property but doesn’t include cover for your car.
- Young Driver Insurance - If you're under 25 AMI will treat you like a good driver straightaway. We'll give you at least a 50% No Claims Bonus when you take out an AMI Full Cover, Third Party Fire & Theft, or Third Party car policy.* If you're 25 or older, you can still get a great rate on car cover.
*Standard underwriting criteria applies. The No Claims Bonus applies to the premium amount excluding any optional covers and it does not apply to government levies or GST.