How to buy a car in Australia?

Buying a car is one of the biggest purchases most Aussies will ever make—and let’s be honest, it can feel pretty overwhelming. Between confusing car jargon, negotiating prices, sorting out finance, and taking test drives, the whole process can feel like a bit of a rollercoaster.

But don’t stress. Whether you’re buying your very first car or upgrading your current ride, this guide will break down everything you need to know, using plain, easy-to-follow advice.

We’ll walk you through finding the right car, what to look out for, how to snag the best deal, and how to drive off feeling confident (not broke).

Let’s hit the road!

Know your budget before anything else

Before you even visit a dealership or start scrolling through car listings, the first thing you need to sort out is your budget.

Here’s what to consider:

• Your monthly take-home income.
• Your fixed expenses (rent, groceries, phone bill, etc.).
• Your savings goals and emergency fund.
• How much you can comfortably afford for car repayments, insurance, rego, servicing, and fuel.

A good rule of thumb? Keep your total car costs under 15% of your monthly income. That way, you won’t end up car-rich and cash-poor.

Decide: new, used, or certified pre-owned?

Choosing the right type of car depends on your lifestyle, preferences, and budget. Here’s a quick overview to help you make the best decision:

1. New cars

Pros:

• Come with a full manufacturer’s warranty.
• Feature the latest technology and advanced safety systems.

Cons:

• Higher initial price.
• Rapid depreciation, especially in the first year.

2. Used cars

Pros:

• Significantly cheaper upfront.
• Avoid the steep depreciation of a brand-new car.

Cons:

• Potentially higher ongoing maintenance costs.
• Risk of hidden issues or previous wear and tear.

3. Certified Pre-Owned (CPO)

Pros:

• Thoroughly inspected, typically with a manufacturer-backed warranty.
• More reliable than regular used cars, offering peace of mind.

Cons:

• Usually more expensive than standard used cars.
• Limited selection compared to general used vehicles.

Still unsure? CarsGuide provides an excellent comparison outlining the pros and cons of new vs used vehicles to guide you further.

Make a list of your “must-haves”

Before you start falling for shiny things you don’t need, make a clear list of your priorities.

Things to consider:

• Size: hatchback, sedan, SUV, ute?
• Fuel efficiency: especially important with current petrol prices.
• Safety: Check the ANCAP (Australasian New Car Assessment Program) safety ratings.
• Tech features: Bluetooth, reverse camera, Apple CarPlay, adaptive cruise control?
• Boot space: How much storage do you require?
• Drive type: Do you need 4WD or AWD?
• Transmission: Prefer automatic or manual?

Write down your must-haves, nice-to-haves, and deal-breakers to stay focused.

Start researching cars online

Now that you know what you want and what you can afford, it’s time to do your homework.

Some great Aussie sites for car research:

• CarsGuide – reviews, prices, and advice
• Drive.com.au – reviews and comparisons
• CarSales – Australia’s biggest car listing site
• ANCAP Safety Ratings – check safety scores before you commit

Compare models, read owner reviews, check average prices, and shortlist a few contenders.

Decide how you’ll pay: cash, car loan, or novated lease

How you pay will impact your financial situation for months (or years) ahead.

Paying cash

• No interest or monthly repayments.
• Immediate full ownership.
• Could significantly reduce your available savings.

Car loan

• Spread repayments over 3–7 years.
• Keeps savings available for other expenses.
• Includes interest charges and potential fees.

Read also: How to Finance a Car? Learn How to Do It

Novated lease (through your employer)

• Payments made from pre-tax salary, offering potential tax benefits.
• Bundled package includes the car, maintenance, and insurance.
• Less flexibility and possible additional costs at the end of the lease.

Take cars for a test drive

You wouldn’t buy shoes without trying them on, right? Same goes for a car.

Test driving is your chance to see how a car feels on the road. Schedule a few test drives (yes, even the same model from different sellers) and take your time.

During your test drive, pay attention to:

• Comfort (seat height, visibility, legroom)
• Acceleration and braking
• Road noise
• Parking and maneuverability
• How tech features work

Pro tip: test it on highways and suburban streets if possible. And bring a mate along for a second opinion!

Get a vehicle history report (for used cars)

IIf you’re buying a used or certified pre-owned car, always check its history.

In Australia, you can:

• Use the PPSR (Personal Property Securities Register) to make sure there’s no outstanding finance or stolen vehicle report.
• Get a full CarHistory or REVS check for accident, write-off, and odometer rollback information.
• Make sure the vehicle identification number provided matches the vehicle in question.
• Consider hiring a qualified mechanic to perform a pre-purchase inspection.
• Request all maintenance records and service history for the vehicle.

If a private seller won’t provide one, that’s a red flag. Walk away.

Negotiate the price like a pro

Even in Australia, car prices, especially for used cars, are rarely set in stone.

Tips for negotiating:

• Know the fair market price beforehand
• Be prepared to walk away if needed
• Start with a lower offer than you’re willing to pay
• Stay polite, confident, and calm

You can often haggle not just on price but on extras like free servicing, extended warranty, or registration fees too.

Finalize the deal and review the paperwork

Once you agree on a price, carefully review the documents before signing anything.

Documents you’ll need:

• Contract of sale
• Transfer of ownership form (for used cars – each state has its own process)
• Proof of registration
• Finance documents if you’re taking a loan
• Warranty paperwork (if applicable)

For private sales, double-check all the seller’s ID and ownership details match.

Get insurance before driving off

In Australia, you must have at least Compulsory Third Party (CTP) insurance to legally drive. But most experts recommend comprehensive insurance to cover your car too.

You can easily compare quotes with Compare the Market Australia.

Important: Some states like NSW and QLD require you to organise CTP separately before registering the car.

Register the car and get plates

If you’re buying from a dealership, they’ll usually sort out rego and plates for you.

If buying privately, you’ll need to:

• Complete the registration transfer
• Pay stamp duty and registration fees
• Update the vehicle details with your state or territory’s motor registry

Each state (NSW, VIC, QLD, SA, WA, TAS, NT, ACT) has slightly different rules, so check the appropriate state transport authority site for steps.

Enjoy your new ride (and maintain it!)

Congrats! You’ve made it through the process and are now a proud car owner. But the work doesn’t stop there—taking care of your car is key to keeping it running (and valuable).

Basic maintenance tips:

• Regular oil changes
• Tyre rotations every 8,000–10,000 km
• Keep it clean inside and out
• Follow your car’s scheduled servicing intervals
• Don’t ignore warning lights!

Even minor maintenance today can prevent expensive problems down the road.

Final thoughts

Buying a car doesn’t have to be overwhelming or stressful. When you break it down step-by-step, setting a budget, researching options, test-driving, negotiating, and organising paperwork, it becomes way more manageable.

Just remember: take your time, stick to your budget, don’t rush under pressure, ask lots of questions and read every document carefully

The perfect car for your lifestyle (and wallet) is out there—you just need a solid plan to find it. Grab your checklist, do your homework, and before you know it, you’ll be cruising in your new set of wheels with confidence. You’ve got this, mate!