Ultimate new car buying guide

Buying a new car isn’t just about choosing the colour and accessories you love (though that bit is fun). There’s insurance, finance and more to consider.

This ultimate new car buying guide could help you avoid some of the pitfalls of buying a new car, so you can end up with a suitable car for your needs that you’re also happy with.

So, first things first. If you’re going to buy a brand-new car, it’s got to be right for you. To make that happen, here are some things to consider:

It doesn’t matter how fast or good your car looks if you can’t afford to buy it. So, the first thing to do is figure out your budget. Are you planning to pay for the car outright, or were you considering finance? Take a look at our car loan vs dealer finance guide for helpful info on some of the financing options. This could help you decide on a budget.

Once you know your budget, don’t just consider the price of the car. It’s also a good idea to consider the on-road costs to buy the car and how much the car will cost to run. If you’ve got a small ongoing budget, you may need to look for a more fuel-efficient car that’s more likely to be low maintenance or to have low maintenance costs (or both).

Once you know what you can afford, then you can start looking at non-negotiables. What are your must haves?

As a basic example, if you’ve got four kids and a partner, you won’t all fit in a standard five-seat car. So, one of your needs would almost certainly be ‘at least six seats’. You might also need a large boot for shopping and sports gear.

As another example, if you’re pursuing a career as a tradie, one of your needs might be ‘enough storage capacity for your tools’. You might decide to fulfil that need by buying a ute. Or you might decide you’ll need to tow a trailer, and so your car would have to have sufficient power to tow the trailer size you’ll use.

Not all new cars have the same safety rating. If safety is important to you, you might look for the latest safety features or a higher ANCAP safety rating.

Most new cars will be suitable for all areas of Australia. But if you live in an area with specific challenges, such as frequent black ice on the roads or only being able to access your property with a 4WD, you may want to look for a car with features specifically designed for those conditions.

Similarly, some cars are better suited to city driving vs rural driving. If you live in a major city, you might look for small cars that are easy to manoeuvre through narrow city streets. If you live in a rural area with plenty of dirt roads, you might look for a car that’s better designed for driving off-road.

Once you’ve found several contenders that meet those high-priority criteria, you can shortlist cars that meet your lifestyle requirements. For example, if you’re a frequent beach goer, you might look for roof racks to carry your surfboard. If you do numerous road trips, you might want a large boot to fit your luggage.

This probably goes without saying, but if you prefer a specific car make, you may want to prioritise models from a car dealer that sells that make of car.

Most of the information you need to assess these factors will often be in the car buyer's guide. If it’s not, don’t hesitate to ask the car dealer’s salesperson. They should be able to answer questions about all this and more.

Once you’ve got a (hopefully small) shortlist of cars that could be suitable for you, it’s a good idea to test drive all of them. Test-driving each car will help you compare the cars to each other, so you can decide which one feels more comfortable for you to sit in and drive.

Whenever you buy a car, a test drive is always a good idea.

When you’re buying a new car, there can be lots of choice when it comes to car loans. You can choose a traditional car loan, dealer finance or everything in between. If you’re going to go with a car loan, you may want to consider applying for pre-approval to help streamline your car shopping process.

For a detailed guide to some of the different types of car loans on offer, take a look at our car loan comparison page. It’s jam-packed with information about different types of loans and guidance to help compare a range of loans. We also have a dedicated new-car car loan page with additional information specifically about loans for brand new (and nearly new) cars.

If you’re going to be driving your car on Australian public roads, your car will have to meet Australian light vehicle standards rules, which ensure cars on Australian roads are safe and don’t give off too much pollution, for instance.
Car dealers have to make sure the cars they sell meet those standards. But not all Australian car buyers are free to drive any car that meets those standards.

If you’re a probationary driver, some states and territories have placed restrictions on the types of cars you can drive. If you fall within this category, make sure you check the latest advice from your local authority before you commit to a new car.

• NSW — in NSW, P1 and P2 drivers aren’t allowed to drive cars with a power to tare mass ratio of more than 130 kW/tonne, or which are classified as high performance for some other reason. If the car’s engine has been modified, it needs to be approved by an engineer
• ACT — there are no vehicle restrictions for P-platers in the ACT
• NT — there are no vehicle restrictions for P-platers in the Norther Territory
• QLD — in Queensland, P1 and P2 drivers (who are under 25 years old) aren’t allowed to drive cars with engines that have been modified to increase their performance (and the modification requires approval) or which have a power to tare mass ratio of more than 130 kW/tonne
• SA — in SA, P1 and P2 drivers (who are under 25 years old) aren’t allowed to drive cars that have been modified to perform better or which have a power to tare mass ratio of more than 130 kW/tonne
• Tasmania — there are no vehicle restrictions for P-platers in Tasmania
• Victoria — in Victoria, P1 and P2 drivers aren’t allowed to drive cars with engines that have been modified to increase their performance or which have a power to tare mass ratio of more than 130 kW/tonne
• WA — There are no vehicle restrictions for P-platers in WA.

So if you’re a P-plater, be sure to check the car you’re interested in buying isn’t a banned car for probationary drivers in your state.

All Australian car owners have to hold compulsory third-party insurance, which you’ll have to buy when you register your car, either through a licenced insurance provider or included within the registration. The costs vary across the states and territories.

You can learn more about compulsory third-party insurance where you live at the relevant link below:

• ACT
• NSW
• NT
• QLD
• SA
• TAS
• VIC
• WA

Other kinds of insurance are optional, but may give you peace of mind. Car insurance options can include:

• Third-party property insurance — this helps cover damage to other people’s property up to policy limits
• Third-party fire and theft — this adds cover to protect your car if it’s stolen or damaged by fire, up to policy limits
• Comprehensive — this type of insurance adds a level of coverage for your car as well

All policies can be different, so it’s important to review the Product Disclosure Statement (PDS) before deciding on a policy. The PDS includes information about policy inclusions, limitations and exclusions.

Some people may opt for comprehensive insurance when they buy a new car. Depending on the policy and the circumstances surrounding any incident, comprehensive car insurance can help cover the cost of replacing or repairing your vehicle (minus any applicable excess) and that of other property involved in the accident, such as a third party vehicle.

Some policies may also include additional conveniences, such as a hire car while the car is being repaired or the choice to nominate a preferred repairer.

If you own a car in Australia, there are several important things you might consider doing to care for your car if you don’t want its value to deteriorate prematurely and you want to stay safe when you’re driving.

This is not an exhaustive list but is a great place to start:

• Regularly wash your car to remove salt if you live on the coast
• Check your engine oil level regularly
• Check your tyre pressure (this can also impact fuel consumption)
• Regularly check your lights are working properly
• Periodically inspect your battery for signs of damage (leakage), and if you don’t need to drive your car for a while (e.g. you’re on holiday from work), consider going for a short drive once a week to stop the battery going flat
• Change your wiper blades at least every six to12 months, or earlier if you use them a lot
• Periodically check your coolant level

Now, before you go and pick your dream car, you might want to consider that a brand-new car may not be the perfect choice for your situation. For example, some new cars may depreciate (lose their value) more rapidly, and you may be able to get the features you need and want for a lower price if you take a moment to peruse the used car market.

It's always worth weighing up the pros and cons before you make a decision.

If this has piqued your interest in getting a used car, you can take a look at our used car loan comparison page. Or, if it’s reinforced your desire for a brand-new car, our new-car car loan comparison page may be able to help.

Each guide includes information that could help you better understand and compare a range of loan options. It might even help you get that car you’ve been dreaming of sooner rather than later.