We explain the laws governing car sales, tell you how to deal with a dealer and how to decide if a car is worth buying. We’ve also covered reliable makes and included our most recent car reviews.
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It used to be that regular trade-ups of relatively new cars were the smart way to keep yourself on the road without paying too much in maintenance. But our surveys show cars are lasting way longer than they used to before the big repair bills kick in. So when should you buy a new one? Here's our advice.
Run your car for as long as possible
One of the biggest costs of owning a car is depreciation, and the best way to minimise the effect of this is simple: keep your car longer. Around a third of a new car's value will vanish by the end of the third year, and half by 5 years. Thereafter, if it's a good car and you look after it, the rate slows down: by 10 years it will still hold around 20 percent of its value.
If you buy a 5-year-old car and keep it for 5 years, you'll lose a lot less than buying new. You might want to run it even longer. The extra costs of replacing worn items in a well-maintained old car should still be a lot less than the depreciation on a new or near-new car. Shop around to keep repair costs down.
Watch for rust
The big warning sign is rust. Once rust takes hold, the car loses value rapidly and it is expensive to repair. If your car has rust, it could be time to sell.
The good news, though, is that rust is not the problem it used to be. Remember all those rusted-out doors and station-wagon tailgates in the 1980s? You don't often see them now, because factory rust-prevention treatments are so much better.
Don't worry about the odometer
Don't worry about the odometer racking up large numbers. Once it clicks over 100,000 kilometres the distance travelled has less effect on the value. We hear of lots of cars that are still reliable at well over 200,000 kilometres.
Should you buy a new car?
Cars depreciate most during their first few years. That makes buying a new car and selling it after a few years a very expensive exercise. But many new cars can be bought at good discounts from the listed price. If you haggle hard to get a good discount and keep the car for at least 10 years, you will have the pleasure of buying a new car and you can ensure it is serviced regularly - so it should be reliable. Car safety improvements in recent years also means you will have a safer vehicle.
If buying new is not for you, then find a good car that has got past the worst part of the depreciation. But remember every time a car is sold, dealers take a chunk of profit. You pay that. Look for ...
Buy a reliable model
Pick from the models we recommend for reliability. For full details, see our Car reliability report.
How do you know if a car will provide years of happy motoring or spend more time at your local garage? You can start with our latest car reliability survey.
We’ve covered what to do if a car deal goes wrong when buying privately or through a dealer, including how to take a claim to the Disputes Tribunal.
Use our car inspection checklist (99.7 KB) on the car in a well-lit area. The car should be clean and dry, or you may miss defects in the panel work.
The drive should take up to half an hour, again, with our checklist. It helps to have someone with you to assess some of the items on the list.
Make sure you include some speed driving on the motorway or open road, and some hill work for checking the gears and handbrake.
Although fine weather is good for the inspection, rain can be helpful for the drive. You'll give the wipers a better workout, and you might even discover a leak or two.
Most of the time, it's not a good idea to use a mate. If they miss something, it's bad luck.
But if you pay a specialist inspection service or your own garage or mechanic, they are required under the Consumer Guarantees Act to do the job to a reasonable standard according to your instructions. If they get it wrong, you can hold them liable for any losses you incur.
A full pre-purchase inspection will cost up to $120: not much in the total cost of the car.
The car itself is only half the story. There's also a lot of documentation to check, especially if you're buying from a dealer.
Warrant of fitness
Every vehicle sold by a dealer must have a warrant of fitness issued no more than a month before the date the vehicle is delivered to the buyer. Private sellers have the option of selling without a warrant, provided the car is clearly identified for sale "as is where is".
Consumer Information Notice
A dealer is required to attach to every motor vehicle displayed for sale a "consumer information notice" (CIN).
The information that must be disclosed in the CIN includes:
If you buy the car, you must be given a copy of the CIN.
If you buy privately, your car could be repossessed if there are any outstanding debts on it. Use a car history checking service to find out if the car is clear of debt.
If you buy from a registered motor vehicle dealer, you won't be liable for any such debts, unless you were told about them.
The certificate of registration, which you should be shown, lists the current registered owner of a car. This should be the company or person - whether dealer or private - you are buying the car from.
If you're in any doubt about the ownership of a vehicle, call the police. They'll tell you if it's been reported stolen.
If you're buying from a dealer, they must provide you with a written sale agreement and the Consumer Information Notice which you have signed. Don't sign an agreement until you have read and understood all the clauses, particularly those regarding interest rates and warranty costs. Beware of documentation fees charged by the dealer.
Change of ownership
Both the buyer and the seller have to fill out forms available from an NZTA agent (such as New Zealand Post). The buyer pays the fee and is ultimately responsible for the changeover.
If you're selling privately, make sure the changeover really has happened before you release the car. You don't want speeding or parking tickets turning up addressed to you.
Dealer finance is often expensive. You'll probably get a better deal from a bank. If you are a home owner, the cheapest finance you will get is by extending your house mortgage.
With any loan offer, check the time to repay, the monthly payments and the total cost of credit over the term of the loan. All lending organisations must provide this information, to allow you to compare the deals they offer.
If the dealer offers an interest-free loan, check there are no extra hidden fees and that the asking price hasn't been inflated.
Want to know more about the electric vehicle revolution? Check out our trials of different electric vehicles and keep up with what’s happening in the market.
A high asking price
Whether new or used, the dealer’s price is usually only what they hope to get. Aim 20 percent lower for a new model and 15 percent lower for a used car. They’ll expect it. In the current economic climate, dealers will be very keen to sell.
There may be exceptions. Cars are put on “special” from time to time. Don’t expect discounts from these prices. Some manufacturers, notably Honda, have a “no haggle” type of pricing structure. We think you should still try to haggle – just don’t be too surprised if you can’t budge them.
The trade-in deal is a trap
Some dealers advertise minimum trade-in prices: $3150 if you can drive it in the gate, for example. It probably means $3150 has been added into the window price of the cars for sale.
Before you decide on a trade-in, find out how much both cars are worth. Check the ads in newspapers and car sale websites.
Say you want to buy a car with a ticket price of $15,000. The dealer offers you $3000 as a trade-in, so you’ll have to pay $12,000. But if you don’t do a trade-in, you might still be able to knock $2000 off the asking price – after all, that’s under 15 percent. If you then sell your car privately for $4000, you’ll be $3000 better off.
Up-selling is the aim
Seen a really good deal on a basic car? Count the seconds before they start talking about flasher models or add-on extras. Sure, air-conditioning is a worthy addition, but another dealer may have a similar model with it already fitted at a better price. Know what you want, and shop around.
If you buy from a dealer, they are required by law to give you “good title”. But if you buy privately, the car could be repossessed if there are debts on it. Several services allow you to check.
The following services provide car history checks: