Monday, 9 April 2012

A short guide to buying a budget car in New Zealand

Buying a second-hand is never easy and this is can be especially challenging when you're doing it in another country! Apart from having to get used to the terminology and requirements for ensuring your vehicle is legal to drive (road tax, owner registration and vehicle road worthiness), there's your list of ideal requirements, knowing when to spot a lemon or bargain which looks too good to be true, and the slight awkwardness in trying to agree an asking price with the person your buying from.

To begin with, I think the most important thing to point out is that the car market is completely different to other Western countries. Unlike it's bigger brother Australia, New Zealand doesn't manufacture it's own cars so be prepared to shop around for a lot of Japanese imports including Subarus, Toyotas, Nissans, Mitsubishis, etc, although you can get Holdens or Fords as well as a limited range of European makes.

The majority of cars for sale are automatics with large engines - I haven't found a particularly good reason why the cars don't have gear sticks but my preference would be for a manual car. New Zealand doesn't really do small city cars either and most of the budget cars that are advertised for sale will be either station wagons (estates), sedans (saloons) or vans.

The vehicles at the lower end of the price range are in need of some TLC and will have some sort of minor damage to the body work, whether it's a dent or two in the body, some scratches, some faded paintwork or maybe even a new bonnet or door. So, it is worth lowering your expectations as you'll be paying more for cars which are essentially older and have done a lot more miles - I'll go into more depth further on.

For example, back at home £900 GBP (or $1,680 at the time of writing) would have bought us a 1.2 litre Renault Clio (2000) with 98,000 miles/157,715 km on the clock. This included a 12 month MOT, one month's worth of road tax and it had been owned by three previous owners.

Our beloved Renault Clio which we had to sell before the trip

Having been to New Zealand before and used the InterCity coaches flexi-pass to get us around the North and South Islands, we decided that we wanted to buy a car second time round as it would open up more possibilities to see parts of the country that we wouldn't have been able to get to by coach.

Having resisted the urge to buy a car as soon as we arrived in Auckland, we held off for a couple of weeks to get a feel for what kind of motors would be within our budget and then we looked at the following cars:

Option 1: Holden Ballina (1995)

The equivalent of the Vauxhall Corsa in the UK, this car had 193,000 kms on the mileometer (or the odometer as it's known here), a 1.4 litre engine, licence ("rego") valid for a month and a half, and WOF due in 3 months. The asking price was $1600 ONO.

The main issue was the loose exhaust pipe, which rattled against the underside and made a lot noise with four passengers in the car on the test drive but it didn't have a hole anywhere else in the pipe.

A small car of this age is almost a rarity but you can see the superficial damage in the bonnet

 Option 2: Toyota Cynos (1992)

A sporty little 2 door coupĂ© with a 1.5 litre engine, 240,000 kms on the odometer, licence valid for a month and a half, and WOF due in 6 months. The asking price was $1800 ONO.

There was nothing obviously wrong with the car based on a visual inspection apart from a bit of wear and tear on the driver seat and a bald tyre on the front passenger side, otherwise it was a smooth ride.

This is the best photo I could find of a Toyota Cynos not too dissimilar to the one we looked at
Photo courtesy of hytam2 from flickr licensed under a Creative Commons Attribution 2.0 License.

Option 3: Mitsubishi Lancer (1996)

A popular seventh generation Lancer with 1.5 litre engine, four doors plus a boot, 202,000 kms on the clock, licence valid for a month and a half and WOF due in 6 months. This asking price was the most expensive of the three cars we'd seen at $2200 but there were no major problems that we could find having taken the car for a test drive.

This car was owned by a local who had it for just under 4 years
Presented with all three choices which one would you choose? This isn't a trick question as there's no right or wrong answer but based on our experience we went with option 3, having put both the Mitisubishi Lancer and Toyota Cynos through a pre-purchase inspection. This is a vehicle inspection which is a useful way of finding out the condition of the car you're potentially buying as it gives you all the facts when you're making your decision. A pre-purchase inspection can cost anything between $25-$100, depending on where you get it done and how thorough an inspection you want the garage to carry out. We paid $35 each for our checks at a local independent garage and neither of the owners of the two cars had any objections to having the check done, plus were both happy to take their cars to the garage of our choice. However, it is was the findings of the pre-purchase inspection which largely informed our final decision.

On paper and on the test drive, the Toyota Cynos seemed to be a perfectly decent car, but when we took it to the garage the inspection found a whole host of problems, which would have potentially cost us in the long run such as; a large crack in the top of the radiator water tank, oil leaks around the cambelt, problems with shock absorbers and the tyre on the front passenger side was definitely not road worthy - this would have failed the car on it's next Warrant of Fitness test.

On the other hand, the inspection on Mitisubishi Lancer wasn't perfect as there was a small leak in the bottom of the radiator water tank and there were no signs that the cambelt had been changed in the last four years since the previous owner had the car (or roughly every 100,000 kms depending on manufacturer) but at least we knew what we were letting ourselves in for when buying the car and roughly how important these problems would be to fix. It also gave us some leverage to make an offer lower than the asking price (we agreed on $2,000 with the owner).

The Automobile Association (or AA as they're also known as in the UK) is a popular motoring organisation in New Zealand and is a useful starting point for buying a second-hand vehicle. Two of the most common phrases that you'll see when buying second-hand car include:
  1. Warrant of Fitness (WOF) is a test to make sure that your vehicle meets required safety standards and is the equivalent of a MOT in the UK, however it has to be carried out every 6 months once a vehicle is more than 6 years old.
  2. Licensing is often referred to as the "rego" and this the equivalent of road tax. This should not to be confused with Registration, which is when a car is very first registered in New Zealand and issued with number plates. The "rego" can be purchased in blocks of 3, 6 or 12 months. You can find the current fees on the New Zealand Transport Agency's website, which is also a useful source of information for all car-related terminology. 
When viewing a car you should go prepared with some questions and a basic list of things to check. If possible try to bring a friend along as they might spot things you didn't see or offer a second opinion. The following checklist is also a useful guide for things to look out for when doing a vehicle inspection. Some good questions to ask include:
  • Why are they selling the car? Most people will be looking to offload their car as they're leaving the country but if their story sounds a bit fishy then ask a few more questions to see if they're being consistent or have something to hide. Also, check if they're the vehicle owner and not doing the sale on behalf of anyone else. 
  • How many previous owners? Although a perfectly good question ask, don't be surprised if the current owner doesn't know, especially if you're buying from a fellow backpacker as some cars have done the rounds. From our experience not everyone will be able to provide documentation to confirm the vehicle's history but if you can at least get hold of the previous WOF certificate it will provide a brief report with any recommendations for the next test.
  • Has any work been done to car recently?  This gives an indication of what sort of condition the car is in. Has it been in a crash, had some major repairs or had a serious mechanical fault? If it has been repaired, where was it done and are the repairs guaranteed? 
  • When was the cambelt last changed? This is quite a common thing that needs replacing in older cars and can cause some serious damage to the engine if it breaks. If it hasn't been replaced recently then find out when it is due, as they need changing approx. every 100,000 km's. Personally, I think this is an important question to ask as the majority of budget cars will have done a lot of kilometers, more than your average car back at home.
  • Has the car been serviced recently? If the car has been serviced within the last year then you can feel a little more confident that it has been well looked after. This also provides an opportunity for the owner to mention if the oil has been changed and how often it needs topping up. 
  • How many kilometres does the car do to the litre?  It might be a useful thing to know if the car is fuel efficient as petrol costs over seem to be rising and it might be savvy to work out how often you'll be need to fill up the car in order for it to get you from A to B.
  • What are price you willing to sell the car for? This will give you an idea if there is any other interest in the car or whether the seller is prepared to offer a discount. Sometimes it is possible to negotiate a lower price based on the when the WOF and vehicle license are due, or if there is any work that will need doing in the future. You can also offer a cash payment to sweeten the deal.
  • Are you willing to put the car through a pre-purchase inspection? As mentioned before the short-term benefits can outweigh long-term costs if you buy a car which is actually in poor condition under the bonnet. If there is any hesitation on the part of the seller at the thought of an inspection, then you should probably steer clear and looking for some alternative cars to view.
Most importantly, use your common sense. If something doesn't feel right, then something is most likely wrong. The vast majority of owners will be happy to let you test drive the car, especially as insurance in New Zealand isn't a legal requirement, but it is still worth paying for than taking a risk in case you damage someone else's BMW! A good starting point for insurance is the BBH (Budget Backpacker Hostels) policy as they offer very reasonably price third party insurance which can also be extended to cover fire and theft of your vehicle.

Once you've agreed a selling price and exchanged keys, both the buyer and the seller will need to complete some paperwork in order to officially confirm the transfer of ownership. This needs to be done immediately using forms available from a local New Zealand Post shop or online at the New Zealand Transport Agency website. The buyer pays a small fee and is ultimately responsible for the changeover. Also, the car needs to be registered to a physical address not a PO Box. If you don't have a permanent address most hostels won't mind you using their address to get the new ownership documents sent to, as long as you ask nicely.

Hopefully, you will find this post useful as buying a car in New Zealand will open up a whole host of possibilities, but be aware that it's not the same market as at home and sometimes you will need to adjust your expectations.

Last but not least, it is important to remember that the Kiwi's drive on the left-hand side of the road as do the Aussie's. This may sound obvious but it seems quite a few people have been caught out by this. Happy driving!


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