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Buying Your First Car – 9 Important Steps

Buying your first car? Follow 9 important steps to find your dream car at the right price and protect yourself include inspecting, negotiating and paperwork.

Buying your first car can be an exciting time but just remember that when you’re buying a car for the first time and especially if you’re buying a used car from a private party it’s important to be in the driver’s seat and be in control so you can get the facts about the car first.

But unlike buying a used car from a dealer where you get guarantees and warranties, buying privately can be a risky business. This is why you should be armed with a good checklist and know what to check when buying a second-hand car.

Doing so can help you be more certain you’re actually getting the car you want at the price that’s right. To do this you need to ask the hard questions like the most important one below.

The reason we call them the hard questions is because they give you the facts and the facts are what you need to use to make your product decision and negotiate with so you pay the right price.

Table of Contents

9 Steps To Buying Your First Car Navigation Menu:

  1. Choose the right vehicle for you. Understand your needs and wants.
  2. Know your budget. Establish affordability and how you’re going to finance it.
  3. Research vehicles. Where to review, compare and appraise vehicles.
  4. PPSR report. How to check Personal Property Securities Register for free.
  5. Contact the seller. Important questions to ask seller.
  6. Inspect vehicle. Download free buying a used car checklist and follow action steps.
  7. Negotiate price. Trade price formula and closing window strategy to get best price.
  8. Protect yourself. Download the free buyer’s and seller’s receipt forms.
  9. Before you drive off . Important checks for both seller and buyer to do.

As you can see this is a complete A to Z guide on how to buy a used car including free used car buying tools designed to make your used car shopping experience faster, safer and more enjoyable. Even if you know nothing about cars you can still follow the steps and take action.

Choose The Right Vehicle For You

By now you probably have an idea as to what make and model cars will fit your needs and want like safety, security, fuel consumption, running costs. If you don’t have a dream car or a wish list, you need to start doing some brainstorming by asking yourself these questions,

  1. What do I want my next vehicle to do for me/wife/husband/kids/family/dog etc.?
  2. Is my next vehicle for business or pleasure?
  3. If business, what percentage?
  4. How do I want to use the vehicle on the weekends?
  5. How long do I intend to keep the vehicle?

Know Your Budget

When setting your budget it’s best to know the absolute maximum amount that you can afford and no more! If you are financing the vehicle don’t let the interest rate be the only deciding factor know the maximum amount you can afford weekly or monthly. Also if you’re buying from a private seller don’t forget to include:

  • Registration
  • Stamp duty
  • Transfer fee costs (Contact your local authorities)

The other ongoing cost that a lot of car buyers forget is:

  • Maintenance
  • Car insurance

Tip
Try to organize your finance before inspecting vehicles as this can:

  • Save you time because you know exactly what you can and can’t afford
  • Allow you to act quickly when you do find the right vehicle
  • Help you negotiate a better deal confidently

Guide To Researching Vehicles

In Australia visit these sites:

Check PPSR Report

Before you go to inspect the list of cars on your shortlist do a PPSR check to see if the vehicle you’re thinking of buying is:

  • debt free
  • not stolen
  • not written off

The best way to check is to do a free PPSR check and get the official Personal Property Securities Register (PPSR) report for free.

What To Say When You Contact The Seller

After finding a vehicle you’re interested in it’s now time to make your first contact with the seller to see if the vehicle fits your needs and wants 100% and is worth inspecting by asking some fact-finding questions to find out about the seller’s ownership, wants, needs and motoring habits.

All questions start with “Wh” or are open-ended questions as opposed to “Yes” or “No” questions. This forces the seller to reveal as much information as possible and for you to gather the facts.

List of questions to ask the seller:

  1. Is the vehicle registered and how long for?
  2. Do you have the necessary inspection papers required for transfer of ownership?
  3. Will it meet a roadworthy inspection?
  4. How long have you owned the car?
  5. What have you loved about the car?
  6. What have you disliked about the car?
  7. Where did you buy the car from?
  8. Why are you selling it?
  9. Has it ever been damaged?
  10. What condition is it in?

Note: In some states and territories in Australia to enable the transfer of registration from the seller to buy the seller require the vehicle to have a completed mechanical check in accordance with relevant vehicle transfer authorities. Without this, the transfer may not be possible.

What To Inspect When Buying A Used Car

The most important hard question to ask the seller is, “Have you put back what you have taken?” or put simply “Have you had the car serviced regularly?”. 

When the seller feels they need to be the salesperson and sell you their car, they usually want to tell you how wonderful the car has been for them and that they have been everywhere in it. 

That’s ok, but what you want to know is, what will the car do for me if I buy it, and the only way to know this is by asking for the logbooks/service books and/or maintenance receipts.

I want you to stop thinking that you are buying a second-hand car but instead, you are buying unused kilometres. You see a car isn’t any good to you if it has no unused miles left. The car may look great but underneath there is nothing left in other words it’s all been used. So when you hear the seller say “it’s been a great vehicle, we have been everywhere in it and we’re only selling it because we just don’t need two cars anymore.”

  1. You can look the seller in the eye and ask, “Have you put back what you have taken?”
  2. Then stop talking! And wait for the seller’s response.
  3. The seller’s response is likely to be, “what do you mean?”
  4. Let’s dive in deeper and I’ll reveal the power behind this question.
  5. What you are really asking the seller is,
  6. “Have you put back the kilometres that you have used” in the way of servicing the vehicle.

What Does A Service Really Mean?

When looking at the service and repair history you are trying to verify whether the seller has had the vehicle serviced on a regular basis and what repairs and/or modifications have been carried out.

A service does 5 things to the vehicle:

  1. Keeps the engine clean, protected, improving efficiency and longevity
  2. Keeps the vehicle safe by replacing serviceable parts
  3. Identifies early signs of trouble
  4. Keeps the vehicle reliable and economical
  5. Improves the re-sale by putting back what the user or seller has taken

The Vehicle Doesn’t Have A Service History

Then wait for the seller’s response. It’s important you get some explanation as to why there is no service booklet or company invoices showing repairs/servicing because whether the response is true or not you are collecting more facts which are bullets to fire at the negotiating table to lower the price.

If the seller can not supply any documentation like the vehicle’s service booklet or an invoice that shows, the company, date and miles that the service or repair was carried out then there are NO FACTS. In this case, the vehicle fits in the major service categories.

Three Types Of Service Costs:

  • Minor service generally costs $100 to $200 and involves replacing engine oil and oil filter.
  • Intermediate service generally costs $200 to $350 involves replacing Engine oil, Oil filter, air filter fuel filter and spark plugs.
  • Major service generally costs $350 to $600 involves replacing engine oil, oil filter, air filter, fuel filter , spark plugs , brake fluid and coolant.

How To Understand The Service/Log Book?

You are looking for the service history which shows the miles, types of services or repairs carried out and by whom. The logbook is usually stamped by an authorized repairer. Also, look on the windscreen for the service sticker displaying when the next service is due.
The owner may have additional invoices as well. The invoices give more detail as to what was carried out and by whom so ask for them too.

You need to establish if there is a pattern to the service intervals like every 6 Months/5,000km, 12 Months/10,000km or whatever interval is recommended by the manufacturer.

What you don’t want to see is a service history that shows longer than recommended service intervals for that particular vehicle.

Important Note:
A vehicle that has been serviced regularly or showing an interval pattern like every 12 months or 10,000 kilometres is far better than a vehicle that shows no pattern.

What To Check When Inspecting Service History?

Look for regular replacement service items that have been replaced and the date they were replaced on. Here is a list:

Engine oil

is important to prevent premature engine wear. If the engine oil is used beyond the specified period, contamination causing greater friction of metal parts in the engine occurs. A regular engine oil change is important for the future life of any engine.

Engine oil filter

is usually done at the same time the engine oil is replaced.

Air filter

is important because it maintains the inside of the engine by keeping it free of dust, insects and pollutants. Clean air is one of the things your car needs other than fuel.

Fuel filter

replacement is important because it keeps the entire fuel system clean and free of foreign matter so the correct amount can enter the engine.

Spark plugs

are important not only for engine performance and fuel economy but for other electrical components as well. If the spark plugs are used beyond the specified miles resistance builds and makes the ignition coil and spark plug leads work much harder.

Typical replacement interval depends on the manufacturer and the type of spark plug used. Some manufacturers use a platinum spark plug or a combination of platinum and standard. Platinum spark plugs have a replacement interval of approximately 60,000 miles and standard spark plugs are approximately 30,000km.

Drive belt/s

Are usually external belts with no covers and are located at the very front of the engine in front of the timing belt covers or timing chain covers. The belts connect the engine rotation to drive the alternator, power steering, and air conditioning. There is no specific interval to replace them but to inspect and adjust. A typical drive belt replacement can range from $50 to $150 depending on how many belts.

Timing belt

is hidden behind covers at the front of the engine. Its job is to connect the bottom of the engine to the top of the engine and hence the name keeps the engine and components in time.

The timing belt requires replacement at a specific interval by the manufacturer which is usually around 100,000 km. A typical timing belt replacement can range from $300 upwards. If the belt is not replaced and it breaks or slips the consequences can be very costly as many engines are interference meaning piston to valve contact takes place if the engine becomes out of time.

Note: Not all vehicles have timing belts but a timing chain instead. Apart from adjustments that can be made on certain engines, there is usually no specific replacement interval for timing chains therefore replacement is only necessary when the timing chain tensioner and guides wear making a tinny noise when the engine is idling.

Brake pads/Brake shoes

service life is usually between 40,000 to 80,000 kilometres with the front brake pads usually wearing faster than the rear. Most modern cars all have disc brakes which mean they have brake pads. Most times the driver will hear a disc brake squeal when applying the brakes indicating the pad thickness has reached its minimum thickness.

A typical front brake pad only replacement for most common makes of vehicles is around $150 and a similar price for the rear brakes. European vehicles are much more costly in this area as the brake component materials used are a softer compound. Once the vehicle reaches its second brake pad change usually new rotors or discs are required at around $150 each for one rotor/disc on most common vehicles but much dearer for European vehicles.

Brake fluid

Is a specially blended hydraulic fluid that transfers pressure to the main braking components like the wheel cylinders and callipers. Brake fluid becomes contaminated over time reducing its characteristics and must be replaced at specific intervals depending on the vehicle manufacturer.

Usually, the replacement interval is 2 years or 40,000 km whichever occurs first.
Brake fluid replacement is approximately $100

Coolant

(Radiator Antifreeze/Anti boil/Inhibitor) is a mixture of water and antifreeze (ethylene glycol) which lowers the freezing point of the water in the cooling system. Coolant prevents rust and corrosion, lubricates the water pump, and picks up heat from the engine, transferring it to air passing through the radiator preventing the engine from overheating. The coolant needs to be changed annually in cold climates and every couple of years in warmer climates.

Coolant replacement is approximately $150.

How to check if the kilometres are genuine?

Put simply, check that the cars condition inside, outside, in the engine bay, in the boot and underneath consistent with the age and miles travelled. Average kilometres depending on how the vehicle is used, private use or company use or location, city or country.

Average private use is 15,000 kilometres every 12 months but higher within 12 months if company use. Also if the speedometer shows 100,000 kilometres but the interior has excessive wear, like the seats, armrests and pedal pads then the speedometer may have been tampered with or replaced.

As you can see now a vehicle with a service book or company invoices are important documents to the buyer and the seller.

For the buyer-
It gives you a window into the vehicle history
It gives you a resale tool

For the seller-
It is an important sales tool that is money!

FACT:
If the seller was selling the vehicle to a car dealer without a service history book or Service/repair invoices the seller can lose up to $4,000 in the $20,000 price bracket.

Test drive

Finally, you should take it for a test drive and ask questions about any issues or problems that arise during your test drive. During this time, you should make sure that there are no strange sounds coming from under the hood or when you apply brakes. A test drive can also reveal problems with suspension, steering, braking and other issues related to safety.

Using DIY Checklist When Buying Your First Car

Going car shopping? Grab my free used car buying guide, great for multiple diy inspections so you can narrow down your short-list of potential cars to buy. You see, buying a used car can be overwhelming, but my free ‘Street Smart Tool Kit’ has everything you need to give you the confidence on what to check when out car shopping and how to protect yourself.

Car classified companies like carsales.com.au and car auction companies like Manheim have helped educate car buyers and give them the confidence to buy private sale cars.

They have also been able to do this by making the whole car buying experience easier mainly due to the internet. Their online car buying tools like car reviews, car valuations, car safety ratings, purchase price and general information can come in handy for choosing a make and model and how much to pay. Also, the car loan and car insurance comparison tools let you research and compare before you head out into the marketplace.

But, the downside to buying a used car from a private sale or car auction is that you have to do the necessary vehicle identification number (VIN) checks to know the status of the vehicle and mechanical inspection so you know if the vehicle is in good condition or it’s a lemon.

The good news is, you can download my free ‘Street Smart Tool Kit’ – used car buying checklist, buyer’s and seller’s receipt forms so you know:

  • What to check when buying a used car including test drive
  • How to avoid common selling scams
  • How to keep safe in the transaction

My free used car buying guide is your checklist to finding a reliable car, no money owing, not stolen or written-off. Even if you know nothing about cars and you want to buy your first car or your next dream car from a private seller, dealer or auction you can still do these important checks. Knowing what to check before you hand over your cash is the key to avoiding buying a lemon.

Your FREE Street Smart Tool Kit Includes:

1. 7 Things To Check Before Buying A Used Car

Knowing how to check a used car by having a:

  • Logical sequence that you can follow quickly and easily
  • Good car inspection checklist (see below)
  • Buyer’s and seller’s receipt form you can complete (see below)

can save you time, money, and headaches. Here I show you how in 7 quick and easy steps without getting your hands dirty so you can weed out the lemons, narrow down your short-list (Great for multiple car inspections) to find the best car.

Don’t worry if you know zero about cars because if you follow along and do the 7 important necessary steps you will be buying a car like a professional.

2. DIY Used Car Check Before Buying

savvy car buyers wanting to save money and minimise the risk arm themselves with a good used car checklist which is a must have tool when doing diy vehicle inspections.

The DIY buying a used car checklist (printable) helps you quickly identify the key areas of the car that you need to look at during your vehicle inspection. Also, if you have a shortlist of vehicles say 2 or 3 cars to look at you can use it to find what you think is the best car.

3. Receipt Forms

Having both buyer’s and seller’s receipt forms can help you avoid any misunderstanding and protect you from any car selling scams that may be around.

When it comes to handing over your money it is important to check that the sellers identification (drivers license) details match the details on the registration papers and the all the vehicle identifiers including rego, vin, engine number, make, model, year, colour and any other information on the registration certificate matches the vehicle details.

If you record this information on the receipt form when first inspecting the vehicle it is much easier if you decide to buy the car.

The car deposit receipt forms help you record the vehicle’s identification particulars that you get from the vehicle itself. Then you can check them against the seller’s ownership papers like registration papers, roadworthy certificates or safety certificates, car history reports (PPSR) e.t.c (see below).

You can then use the deposit receipt forms including a copy for the seller to put a hold on the vehicle. I will also include what words/clauses you should add if you want to just hold the vehicle so can arrange for a pre-purchase car inspection before buying.

It’s now time to take a look around the vehicle. Most people think that if they know nothing about cars they can’t inspect a car but this is wrong.

Download my free ‘Street Smart Tool Kit’ which includes action steps, diy used car inspection checklist and receipt forms. It can really mean the difference between buying your dream car or buying a lemon that continues costing you money after you buy it.

Download My Free Street Smart Tool Kit Here

Free Street Smart Tool Kit For Buying Your First Car

Should I Get A Mechanical Inspection?

If you’re still not confident with your DIY secondhand car Inspection consider a pre purchase car inspection by a qualified mechanic.

How To Negotiate Buying A Used Car?

Before you move on to negotiation it’s important to calculate vehicle market value.

If you’re financing your first car, beware of advertisements offering tempting deals aimed at people buying a car with bad credit or first-time buyers.

Find out your exact budget, you’re weekly/monthly repayments before you go buying a used car from a private seller because when you do find a good used car then you want to act quickly. You can use a free car loan calculator to help you. Having your finance ready to go not only gives you confidence but leverage in negotiation as well.

If you follow these expert tips, grab the DIY free used car inspection checklist so you can do the necessary important checks you will drive away in your first car faster saving you a ton of money… time… and headaches.

Before you start negotiating with the seller is the:

  1. Glove box empty
  2. Boot empty
  3. Vehicle low on fuel

If the answer is yes to these questions you have a red hot seller who wants to sell his/her car today and this means urgency.

Also, what prices you need to know before negotiating:

  1. The seller’s price
  2. The recommended retail price
  3. The recommended trade price
    If you don’t know the seller’s opening price ask, “What price are you hoping to achieve?” NOT what’s your best price? You want to slowly bring the seller down to a commitment. (Don’t worry I’ll explain soon.)

If you don’t know the answer to the recommended retail price or trade price then go to calculate vehicle market value.

How To Make The Seller A Realistic Offer Using My Trade Price Formula

If your inspection found that the vehicle has not had a major service for 20,000 kilometres and it needs new tyres then do the following. Estimate the price for a major service and 4 new tyres, then simply deduct from the seller’s asking price. Why should you have to pay for a major service and new tyres if the seller is asking retail price?

For example:

The seller’s asking price is $7,500
(Retail price is $7,500)
Major service is approximately $500
4x New tyres are approximately $600
Your offer should be $6,400

How To Get The Seller To Make A Counteroffer?

After making your realistic offer and explaining how you come up with that figure it’s time to push for a counteroffer from the seller. At this stage, the counteroffer should come automatically from the seller. If it doesn’t you can ask, “What’s the lowest price you are willing to accept”?

Here’s How The Closing Window Works

Let’s say the seller’s counteroffer is $7,000 and your offer is $6,400. The difference is $600.
This means we are $600 away from closing the window (making a deal).

As you can see the closing window lets the seller know how close he/she is from selling his/her car today and this gets them excited.

To close the deal simply put out your hand and say how about we split the $600 and meet halfway. Have we got a deal? You pay $6,700. Congratulations you have achieved the trade price.

Protect Yourself

If you’re buying a car from a private seller it’s more important to do the necessary identification checks than if you were buying a used car from a dealer. When buying from a licensed dealer you get a cooling off period, statutory warranty and guaranteed clear title but this is not the case when buying privately. So never assume anything and only deal with the facts!

What You Need To Do?

  1. Using the PPSR report you got.
  2. Confirm registration number plates, engine and VIN (Chassis numbers pre 1981) numbers from the car itself match those on the seller’s registration certificate and PPSR report.
  3. Ask yourself, Is the vehicle really the one it is supposed to be?
  4. Check if the vehicle was used as a taxi or rent a car.
  5. Demand to have a copy of any required documents that outline the road-worthiness/safety of the vehicle that may be required by any state or jurisdiction. You may need these to transfer registration from the seller to the buyer depending on your area. If you don’t you will be buying an unregistered vehicle.

Using The Buyer’s Deposit/Receipt Form

Included in your free Street Smart Tool Kit you can use the receipt forms.

Complete The Seller’s Details:

  1. Make sure the person selling the car is the real owner of the car. Determine this by asking for the seller’s driving license or any other forms of identity.

Complete Vehicle Details:

  1. Record the registration number, engine number, vehicle identification number (VIN) or chassis number from the vehicle’s body/chassis, manufactures plate and compliance plate. You can usually find the vin number etched into the body or chassis and the engine number on the engine block (main part of engine). If you have problems ask the manufacturer or your local service station/mechanic.
  2. Confirm registration, engine and VIN or chassis numbers from the vehicle itself matches those on the registration papers and PPSR report again.

What To Do If The Seller Has An Encumbrance On The Vehicle?

If the seller has an encumbrance (financial security interest) on the vehicle DO NOT hand over any money to the seller. Follow my post buying a car with finance owing in 3 steps.

If the seller needs to use the money from the buyer to cover the encumbrance, the quickest, safest and easiest way is to travel to the bank or lending institute together to complete the transaction. A bank officer will facilitate the transfer.

Warning When Buying A Used Car From A Private Seller Who Still Has Finance Owing On The Vehicle


Watch the video below to see what happens If a private seller still has money owing on their vehicle when you buy it, there is the risk that it can be repossessed later. To avoid this, you should negotiate with the current owner on what will happen to the finance before making a decision to buy.

Before You Drive Off

  1. Get a cover note from your insurance company
  2. Make sure you get all the keys for the car
  3. Get the service book/log book and owner’s manual
  4. If there’s an alarm, find out how to de-activate it
  5. Is there a hidden ignition switch/immobilizer?
  6. Remove any E Tags or Toll Tags from the vehicle

Also Please Note:
The information contained on this page is for general information purposes only.
All reasonable steps have been taken to ensure that this information is accurate, complete and up-to-date. Also If you believe that any information we have displayed is inaccurate, please contact us immediately and we will take all reasonable steps to correct it. Finally, this information is a guide only and cannot be used as a reference to a point of law.