Buying Right

  Read more Oily Rag articles by Frank and Muriel Newman 

Petrol prices are on the increase again (along with electricity), so we thought it a good time to have a look at ways you can cut down on motoring costs. The biggest cost of all in fact is not the running expenses, but the loss in value of the vehicle itself.
 
Buying a new car is usually not a very smart idea – the lost resale value is simply too great. Buying a used car will for most people be the way to go. There are basically three ways to buy a used car: from a dealer, at auction, or privately (in response to an advertisement, via a car fair, from the side of the road, or online). There are advantages and disadvantages in each approach.
 
Buying from a dealer is likely to cost more, much more, but you do have some legislative protection against being sold a pup. Dealers are bound by the Consumer Guarantees Act, the Motor Vehicle Dealers Act and the Fair Trading Act. That gives you certain rights if things go wrong. Basically dealers must sell cars that will do what the dealers say they will do (e.g. “go forever, mate” or “why, this little baby would climb Mount Everest, no problem”) and are what they say they are (be suspicious if it heehaws!). A dealer must also guarantee clear title to the vehicle. That means they guarantee that no third party has a financial claim over the vehicle.
 
Vehicles sold at auction or privately are likely to be much cheaper, but they are sold “as is where is”. In other words, it is up to you as the buyer to make sure the vehicle is mechanically sound and has a clear title (though some vehicle auctioneers do guarantee clear title). Having said that, the information you get about the vehicle can’t be false or misleading.
 
Check the car out thoroughly first. If you don’t have the know-how to do a thorough check, then have the Automobile Association (or another equally qualified inspection service) do it for you. The defects (and blemishes) highlighted in a vehicle inspection report may also form an excellent basis on which to negotiate a better deal.
 
Having established what you want to buy, do your homework. Check out prices, fuel economy, safety, and maintenance costs (spare parts in particular). All of this info is available from the internet. Ongoing maintenance is a big thing: an older model BMW or Mercedes may not cost a lot to buy, but the repair and servicing costs will be higher. Those wanting a reliable and respectable car to last them a few years should consider no-nonsense, typical, run-of-the-mill, latish-model used cars with a reasonable mileage. Be practical, not emotional.  
 
Give yourself plenty of time to check out prices and negotiate a purchase (say a month). Be prepared to walk away from the deal but leave the door open for the seller to come back to you and accept the offer.
 
One reader writes that they were able to reduce their vehicle costs by replacing (at no additional cost) their two vehicles with one that combined their many needs (safety, four-wheel drive and space) into a single vehicle.
 
K.W. from Romahapa says, “Buy the best car you can afford for cash. Old cars don't depreciate as fast as new ones and sometimes even appreciate in value. I bought an old English car for $505. It still goes really well and is still worth at least $500. I also bought an  old Ford Falcon in Dunedin for $580 and it served the family well for over 3 years including 3 trips to Northland. I've seen several rougher ones for sale on Trademe recently for more than $1000. No computer controlled engine management system, fuel injection, power-steering, abs or traction control, so if it does break down its easy and cheap to fix.”
 
You can share your frugal living tips via the oily rag website (www.oilyrag.co.nz) or by writing to Living off the Smell of an Oily Rag, PO Box 984, Whangarei. The book, Living Off the Smell of an Oily Rag by Frank & Muriel Newman is available from good bookstores.
 
* Frank and Muriel Newman are the authors of Living off the Smell of an Oily Rag in NZ. Readers can submit their oily rag tips on-line at www.oilyrag.co.nz. The book is available from bookstores and online at www.oilyrag.co.nz.