Car is large expense

One of the important decisions while achieving financial independence is about car purchase. Obviously you can get a bicycle or scooter and you might get away with the majority of the car related expenditures, but sometimes you just need or really want a car. And considering that by our estimate in our family, car related cost exceed 10% of all our expenditures, it is major financial decision. I am in no mean professional or mechanic, but I have purchased or helped to buy quite a few cars in my life (which included very extensive research). Here I would like to share what I believe worked to get the best value vehicle.

New or used

First decision would be if to buy new or used car. Here I will focus on the used ones as these purchases are more compatible with financial independence discussed at this site. Before deciding on brand and size, we should consider the brand origin. As we live in Australia my experience and research says stick with Japanese made vehicles if possible. Next choice might be Korean Kia and Hyundai where the companies made huge progress with the quality, looks, safety and economy in last decade. Here in Australia Korean cars have up to 7 years warranty so while buying used car let’s say 5 years old, you are still getting balance of 2 years new car warranty which is great for peace of mind.

For me only Japanese or Korean at the moment, please

From my point of view value for money (lower price range) the best reviewed brands here would be Toyota, Subaru, Mazda, Kia, and Hyundai. According to my reading I would always avoid french, italian, english or american brands due to their perceived reliability issues. I would not even consider any asian brands (except of course mentioned korean and japanese), where except reliability problems you might encounter even basic safety issues. There are some potential exemptions as highly prized Ford Fiesta and Ford Focus and in Australia well liked German brands. It seems though that German brands in Australia might not be always that reliable and servicing plus spare parts might not be the cheapest too. Their best selling points in my view are fashion and luxury which are not considered at all at this post. Obviously I like good looking cars, but it is not necessary to be made in Europe for the car to have a good looks i think.

Size

Size of car. This will be single most important thing for the car economy, safety and how easy it will drive in tight city streets or large open roads. If you would like an all rounder I would suggest mid size vehicle as Toyota Corolla, Mazda 3, Huyndai i30. If you like something good for majority city driving, low fuel consumption and easy parking you might want to go for Mazda 2, Toyota Yaris, Kia Rio or Honda Jazz.

Please keep in mind that if you would like to maintain flexibility each of this cars should seat 5, have 5 doors and should come in hatchback version where you can fit in even larger objects. I took a fridge few times in 3 door hatch Suzuki Swift. When you lay down rear seats then there is plenty of space which can be used while doing some home renovation or on long road trips. For extra space I always get roof racks so you can attach further things on the roof including spacious roof box or bicycle.

People movers

I have done bit of research on different types of cars as well. As the top people mover I would recommend Honda Odyssey seating 7 persons with good on road manners, safety and fuel efficiency or for the similar price you can get larger Kia Carnival seating 8 with huge space and seats versatility though fuel efficiency is not that great due to its size.

Softroaders

From soft roaders depending on requested size leader in value for money category would be Toyota Kluger with its reliability, 2 or 4 wheel drive, and up to 7 persons seating. Mazda CX5 or Toyota RV4 are great if you need bit smaller soft roader SUV.

Offroaders

From full sized off roaders best liked would be Toyota Ladcruiser (just look what is almost exclusively driven on remote african roads), Nissan Patrol or good value for money Mitsubishi Pajero. Please note that off roaders are notoriously fuel non economical, with expensive service and spare parts and not the best standard sealed road manners mostly due to its higher center of gravity.

Research

It is always good to have a few potential models you have researched as that gives you more flexibility when one comes up for sale at a good value. Once you roughly know which models you would consider, we should decide on approximate car age and km’s. From my experience I like to buy cars about 2-4 years old when the new car buyer took large financial hit from depreciation but car is still late model with not many km’s driven and less chance of things going wrong. I like when car has less lets say than 60,000 km driven because smaller cars generally last smaller distance than the larger vehicles. Obviously if you can get one with country km’s instead of the city ones, that will be an advantage.

As the source for adds I use carsales.com.au or drive.com.au. Both are good but I find the first one better as you can enter price range, location, km’s, age, and many other requirements for up to 5 different cars you are researching. Then I order list by price and go through it one by one. I prefer to check cars from areas closer to me which are not known for excessive crime from private sellers as opposed from dealers. Another important thing is to prefer vehicles sold by their first owner. Seeing the owner you can often guess if the car had bit hard life and if it got serviced regularly.

Car checks

And what do I check once I find the car I like when I am not mechanic? For peace of mind you can arrange quick purchaser check at your local garage for small fee. I haven’t done that yet but so far I got lucky without lemon. I check many things. First it would be the owner. Then the logbook if the car had regular service. Then I check if all windows have same code and for marks of paint in odd places (inside of mudguards or on windows) to try to exclude chance that the car might have been in major accident. I am usually happy with minor scratches as rust is usually not an issue in Australia and it gives me negotiating power.

Looks

Make sure interior, exterior and engine correspond with the claimed age and km’s. Things like car key, steering wheel or carpets can have signs of major wear while something like only 20,000 kms driven are claimed then be vary. Open and close all doors and boot to make sure it closes well. Test all electronics it works (windows, doors, radio, indicators, every light…), look at (and under) engine for any potential oil leaks. Start it up for any odd rattles and to check no blue smoke comes from exhaust which could be sign of leaking oil into engine. Take it for a short drive and listen all strange sounds.

Test drive

Drive should be smooth, steering wheel should not pull left or right and gears should be changed quietly and easily. If you are not satisfied with anything you consider important or not happy with the owner’s explanation or character walk away. There will be always another one. It is better to waste a bit of time with car purchase then spend plenty of time and money trying to fix the problem. It is good to take someone with you as you will have another set of eyes to pick a potential issue and you will more feel confident negotiating the price. Usually I start negotiating at about 10% under required price if I like the vehicle, and try to bring the price slowly to lowest price seller would be ready to accept. Every saved $500 is great. Obviously make sure that selling person’s name is on transfer documents and check his/her driver licence.

All this advice is only increasing the probability of good purchase. You can buy awesome looking Toyota, one year old from seemingly decent seller after rigorous testing and it still can be a lemon. You can lower that risk but unfortunately you cannot fully exclude it. For that you would have to make new car purchase where the risk is mostly born by the brand but you will pay for it by up to 20% depreciation in the car value on the day when you first time drive it home.

Good luck with the buy.