Buying a new car
If you’re planning on buying a new car, here’s some things to consider:
- Know your budget and what you want from a car (size, use etc.);
- Arrange finance (if applicable)
- Check the contract conditions
- Understand there is no cooling-off period
- Check the warranty conditions
- Insure your car
- Conduct pre-delivery checks
When you buy a car from a dealer, you will be asked to sign a contract of sale. The contract is a legally binding document, only sign it when you are sure you want to buy the car.
Before signing the contract, make sure it shows the:
- total cost of the car;
- trade-in amount (if you are trading in another vehicle)
- delivery date
- special contract conditions agreed to (if any e.g. a subject to finance clause).
For the contract to be binding, it must be signed by you and the dealer. You can withdraw from the sale at any time before you both have signed the contract.
The dealer must give you a copy of the contract at the time of signing.
If you need to cancel a contract to buy a car, you may be asked to pay ‘pre-estimated liquidated damages’ (PELD). The maximum amount of PELD a dealer can charge is five per cent of the total purchase price.
Learn more about cancelling a contract with a dealer.
When you buy a car, you have certain rights known as consumer guarantees.
If a dealer sells you a car that does not meet these guarantees, you have the right to seek a ‘remedy’ to address the issue. Remedies can include a refund, repairs, offering a replacement, or compensating you for any decrease in the vehicle’s value.
A new car will usually be covered by a manufacturer’s warranty, and the dealer may offer an additional extended warranty.
Extended warranties typically promise to repair product defects under specific conditions. They are an optional inclusion usually offered to enhance the appeal of the sale and are not a substitute for any statutory warranty under the Motor Vehicle Dealers Act.
Learn more about warranties when buying a car.
There is no cooling-off period for car purchase contracts in Western Australia.
There are many ways you can finance a car:
- Pay for the car outright;
- Get finance through the dealer;
- Take out a regular car loan; and
- Get a novated lease through your employer.
Make sure you understand the terms and conditions before you agree to any finance contract and it is worthwhile shopping around for the best deal. Some businesses may encourage you to take out a buy now pay later loan on top of your personal loan. You should not feel pressured into paying more than you can afford.
Before you agree to buy a new vehicle, conduct a few pre-delivery checks to see if it is in good working condition and the number plates and vehicle identification number (VIN) match the registration paperwork.
Learn more at car buyers checklist.
Take out insurance before you drive your new car home. More advice on insurance is available on MoneySmart’s choosing car insurance.
Try talking to the dealer to resolve any issues. State what the issue/s is and how you would like it resolved. Sample text is available on the sample letter to a car dealer page.
If you are not happy with their response, contact the Consumer Protection Contact Centre on 1300 30 40 54 or by email for further assistance.
If you’re unable to resolve the dispute, you can lodge a complaint with Consumer Protection.
Electronic vehicles (EV)
Most of the ‘what to look out for’ advice when buying a car applies to buying an electric vehicle (EV), such as doing your research and always test driving the car. These tips are specific to buying a new EV:
- Talk to other owners of EVs – find out what they like or have trouble with.
- Learn about the different types of electric cars and hybrids.
- Learn about the kilowatt-hour.
- Think about range and battery life.
- Check the warranties – each feature of the vehicle may have a separate warranty for example, manufacturer services, battery, vehicle and dash device.
- Understand the difference in service and repairs for EVs eg tyre wear, system upgrades, who is licenced to repair/service an EV.
- Factor in charging method and time.
- Learn about the basics of plug-in car chargers and on-the-go charging.
- Maximize your eligibility for EV incentives.
Share this page: