​The real cost of buying a car

Purchase price

Which car you choose can depend on many factors such as what you want, what you need and most importantly what you can afford. You need to consider a car's costs over its expected lifetime. While a new car can be more expensive to buy, it may be cheaper to service. On the other hand, a used car, will likely be cheaper up-front, but depending on the condition it will probably need more maintenance.

Vehicle inspection

Before you buy a used car, get a professional to inspect it, even if you know your stuff. It could be your local mechanic, or a pre-purchase vehicle inspection through your state or territory’s motoring club (e.g. the RACV or the RACQ).

Car history reports and financial searches

For a small fee, a Personal Property Securities Registry (PPSR) search will tell you if the previous vehicle owner still owes money on the car.

This is important because if they do (and they default on a secured loan) 'your' car could be repossessed, even after you've bought it.

For a larger fee, you'll get a more comprehensive car history report. This gives you the car's financial history, as well as other important details such as:

• approximate valuation of the car
• odometer readings
• write-off history
• if it's been stolen.

Stamp duty

Stamp duty can be a large one-off cost and is calculated on the price of the car you’re buying. Be mindful that each state has different stamp duty costs depending on what type of vehicle you’re purchasing (e.g. small car, ute, hybrid).

If you’re buying a new car, some dealers may also add stamp duty on top of the purchase price.