My generation ( Gen Y) are known as the global generation, culturally diverse; we have mobile careers , we are travellers and basically we don’t like being tied down to long term commitments. So I am not overly excited at the prospects of buying a car. They cost a lot, I could use that money to pay off my HECS debt or go overseas with this money. Besides anything else, it’s dangerous being on the road, according to statistics young people are far more likely to be involved in a road crash than any other age group on the road and besides, public transport allows me to use my ‘i’ stuff and keep connected with my friends and family rather than spending hours on the road concentrating trying to avoid crashing. So, do I really want a car?
Buying a new car has legal and fiscal consequences. Without a full understanding of your rights and responsibilities you could leave yourself open to costly legal battles, fines or end up with a poor credit rating that would have consequences for many years to come. Purchasing a new car requires research, consideration and an understanding of your rights and responsibilities under the law before any contracts are signed or any vehicles purchased.
The legal and fiscal responsibilities include loan repayments, registration, insurance, running cost and awareness of your consumer rights. I will be discussing responsibilities as a responsible consumer and inform you of your consumer rights in relation to purchasing a vehicle.
The guidelines for this research are to following, a budget of $35,000 and then select either a new, 2013, KIA hatchback at $15400 or a used, 2009, Mazda 3 at $12000. The two financial institutions that I chose from were the ANZ bank and the Nation Australia Bank, known as NAB. From this I had to purchase a vehicle as well as making sure I had enough money to maintain the car as well, according to my needs.
Loans for cars are obtained from financial institutions such as banks and building societies. The loan for the purchase and running costs of the car was financed by the ANZ bank rather than the NAB. Both are reputable institutions, however the cheaper rate in combination with investments I already had with the bank made it the better choice . The repayments were compared with NAB with a rate of 13.76% which was more expensive when compared with ANZ’s 12.99%.
The loan with ANZ worked out at repayments of $ 186.12 per week which would total at $9678.24 per year.
The loan taken out is a personal loan for $35,000 not a specific car loan. A secured car loan would have been cheaper as the institution would have the car as security. However I wanted more than the cost of the car so the extra needed to be a personal.
Registration of a car is a legal requirement for the vehicle to be on the road, with dire consequences if this registration is not maintained. The registration allows for common safety standards to be enforced and provides an efficient system to prevent the re-registration of stolen or unroadworthy vehicles .
A car must legally be registered to drive on roads and can be registered for 6 or 12 months. The cost for both cars was $173.80 for six months with a yearly cost of $347.60.
Cars are registered at the Department of Main Roads customer service section.
The following steps are needed to complete registration, a road worthy or safety certificate, a completed registration application form, a compulsory third party certificate if not included in registration, old registration papers, evidence of a vehicles garage address, evidence of an individual’s identification and a means of paying registration fees.
There are two main types of insurances for cars. One is compulsory and the other optional. The compulsory insurance is called compulsory third party insurance and is collected as part of your vehicle registration in Queensland. It indemnifies vehicle owners and drivers who are legally liable for personal injury to any other party in a crash, however the coast of the third part vehicle are not covered.
Comprehensive insurance, covers you and your property in the case of a crash. You can get third party property car insurance, however this does not cover damage to your own vehicle so I decided not to explore the option any further. Two insurance companies were researched, AAMI and RACQ. AAMI ‘s new car insurance calculated to $412.60 per year. This was compared with RACQ, which came to$ 617.20 per year. Insurance can be paid online which is cheaper, or at the insurance companies’ call centre. Used car comprehensive insurance was $441.98 dollars per year. AAMI was chosen as it was the cheapest insurance. It is a reputable company and the terms and conditions of the insurance policy suitable for the car’s requirements.
Running costs are a fiscal responsibility that needs to be calculated into a budget when purchasing a vehicle. The following running costs have been calculated on the cars stipulated in the research guidelines. The new car running costs include fuel at $1357.20 for the year. This was calculated using an average kilometre usage of 15,080 kilometres per year. Servicing came to $ 904.80 and tyres came to $174.92 per year. Cleaning costs were included adding up to $1040 per year. The total running costs for a new car is $3477.
The used car costs were similar with fuel at $1357.20, servicing at $821.86 and tyres $168.89.The costs of cleaning over a year was calculated to $1040 dollars. The total running costs for the used car for 12 months came to $3387.95, making the difference almost negligible.
Consumer rights are the rights that are protected under law for every Australian. Car dealers,insurance companies and finance corporations are legally bound to comply with the terms and conditions of their deals. Consumers and companies are bound under government acts and policies to adhere to the loan, insurance terms & conditions and warranties.
The new car has a warranty which ensures that the dealership should guarantee any faults that occur and are listed on the warranty. If they do not, you have the right to go to the Department Of Consumer Affairs, fill in a consumer complaint form and the department will act on your behalf. The dealership is obliged by law under the motor vehicle dealership act to guarantee a warranty.
Even if the used car that does not have a warranty, The dealership must comply with what was advertised when selling the car or consumer affairs can support the complaint form. If you buy a car privately, there will be no warranty. You should invest in a Vehicle Inspection to determine the condition of the vehicle before you purchase.
You should also check with the Personal Properties Securities Register (PPSR) to ensure that the seller has clear title on the vehicle and that any hire purchase or other loan agreements related to the vehicle have been paid out. If the seller does owe money on the vehicle, it could prevent you becoming the legal owner.
You should also check the registration papers to ensure that the owner is the seller. If the vehicle is unlicensed you need to obtain proof that the seller has the right to sell the vehicle.
The total costs for the new car is $30577.68 with $4422.32 left over. The used car total costs come to $25018.09 with left over money of $9981.91. My budget allows for me to buy both either the used car or the new car with left over money from both. I have decided to buy the new car as it is covered with a warranty and my consumer rights will ensure I am covered if the dealer reneges on the contract.
I also like the peace of mind of knowing that the car is new and reliable. I am not taking on a car that has been used with no guarantee on its reliability.
So after all that; do I really want to buy a car?
I have taken into account the costs and the legal responsibilities of buying a car, including my consumer rights and obligations .So, you know what; I am going to stick with public transport and where I have a lot of rights and no responsibilities, except to pay for my ticket and keep my mouth shut.
Thanks for listening everyone and all the best for making smart choices when purchasing a vehicle.