First car buyers guide

Car Tips
Contents

What would be a good first car?

Buying your first car is a milestone within a young driver's life. A number of life lessons are thrust upon you in a short amount of time and for many, this may be the first significant purchase you make.

When buying a first car it is important to consider a few factors:

Your budget and what you can afford to spend

Will you be purchasing a new or used car?

Will you be using your car for personal use only or for work?

What are the on-road costs of the vehicle?

What’s a good car for a first-time driver?

If you are a first-time driver you will want to consider you will most likely hit a few curbs and objects along the way as you are getting your bearings of driving, so you will most likely want to look for something second hand, cheap and reliable. Smaller cars are easier to maneuver and generally pretty cheap to insure.

According to ubisafe’s first car buyers guide  the list of the safest small cars for first-time drivers is as follows

  1. Volkswagen Polo (Feb 2018 onwards)
  2. Kia Rio (Jan 2017 onwards)
  3. Holden Spark (Mar 2016 onwards)
  4. Mazda 2 (Nov 2014 onwards)
  5. Honda Jazz (Jul 2014 onwards)
  6. Honda City (2014 onwards)
  7. Fiat Panda (2013 onwards)
  8. Renault Clio (2013 onwards)
  9. Ford Fiesta (2013 onwards)
  10. Audi A1 (2010 onwards)
  11. Ford Focus (2019 onwards)
  12. Toyota Corolla hatch (Aug 2018 onwards)
  13. Toyota Yaris (Nov 2017 onwards)
  14. Honda Civic (hatch: 2017 onwards, sedan: Jul 2016 onwards)
  15. Mazda 3 (Aug 2016 onwards)
  16. Hyundai Elantra (Feb 2016 onwards)
  17. Mitsubishi Lancer (Nov 2015 onwards)

Of this list the cheapest initial vehicles are the older models which will set you back around $6,000, however, you will need to consider the cost of insurance as well as registration and repairs along the way. A newer car will have less on-road costs while an older car will have more. The below video goes into more detail on these costs.

Your Toyota, Honda, BMW, Audi and Benz brands will most likely cost you more to purchase and have high repair costs and high insurance, however, these cars have better resale potential and will maintain greater value down the track. One of the most sought after first cars is your classic Toyota corolla.

Comparing a Toyota corolla 2007 model and a Ford Fiesta 2013, you will see a similar price point with 6 years apart in manufacture. For a complete guide on the value of each car, you can compare with drive.com.au car valuation services.

Suzuki and Volkswagen, Seat and Skodas are both cheap to buy and cheap to maintain. Seat and Skodas are a cheaper price point, however, as they are newer to the market in Australia repair parts could be less abundant and repair costs slightly higher.

Kia and Hyundai were looked upon in their earlier models as being light and plasticky, however, they come with great warranties and service packages which generally will mean they will have been looked after throughout their life so generally have lower insurance and on-road costs.

Of the American car makers Ford and Chevrolet, Fords have a better reputation for making a better starter car, while your Chevrolet is a higher price point and doesn’t have a classic starter car.

To assess what’s out there you can cross-reference auto classify websites such as carsguide. Ensure you compare your options with private sellers vs dealers, as you will most likely get a better deal negotiating with a private seller directly.

Should I buy new or used?

Buying a new car is a great option if you have the funds to do so. There are many arguments on the pros vs cons of buying new vs used on the web.

One of the biggest pros of buying new is that you know the complete history of that vehicle and have great insurance and warranty in case of any faults, including complete replacement if the car gets written off. However, obviously a new car is more expensive and if you don’t have the finances you will need to apply for a car loan.

A complete list of pros and cons are below:

New
Used
Purchase price
Higher first car price
Lower first car price
Maintenance cost
Negligible during warranty and service plan
Can be expensive and unpredictable
Warranty
Comes with factory warranty
Warranty must be purchased separately
Reliability
High degree of reliability, most issues covered by warranty
Risk of buying a "lemon"unpredictable reliability
Resale value
Stiff depreciation during first three years of ownership
Retains value better over the short term
Safety
Retains value better over the short term
May be missing important safety updates
Fuel efficiency
Retains value better over the short term
May have older, less fuel-efficient engines
Finance
Preferential finance rates
Less favourable finance agreements
Insurance
Higher replacement cost means higher rates
Lower insurance rates due to lower replacement cost


I want a nice first car but I don’t have the money right now

This is a very common circumstance with over 60% of the cars on road in Australia being financed. If you have decided on a used car, get the best loan options with our used car loans matching service. However, you may find the repayments end up being so affordable that a new car is actually in your budget as generally your new car loans will have a lower interest rate so you will be paying a similar amount overall. Compare new car loans to find out.

David Fahim

David Fahim is CarClarity's COO, joining forces with two founding team members that share the same passion of helping customers get the right car loan.

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