Buying a Car in Australia

Many expats arrange the purchase of new cars when arriving back home in Australia - it's convenient, can make some sense from a financial point of view and is often a pleasant "welcome home" present.

Elsewhere we cover the option of using a novated lease to purchase a car -  but recent tax changes (July, 2013) have significantly undermined the attraction of the approach . However, if you are not considering a novated lease, or you are not sure what car you want to buy, we suggest you wait until you are in Australia before buying. That may sound (very) obvious, but many expats order cars prior to their arrival - in part because they don't have the time to trawl through car yards, or because some cars may take months to arraive.

However, if you are not in Australia, you don't have the same ability to review alternative offers and, most importantly, "haggle". Demo or newly owned cars can also offer big discounts, but you will often need to make compromises in terms of the car you purchase and your timeframe is often very short.

Car dealers aren't always the rogues they are made out to be, but they will not go out of their way to offer the best deal to someone at the other end of the telephone and world.

Just as an unpleasant reminder to Australian expats who have been away for a while, and new visitors to Australia - published prices for cars in Australia will often not include "On Road Costs". You need to consider the following added costs:

  1. Dealer Delivery Charges. If pressed to explain what this covers, the dealer will normally quote in desperation, "administration with preparing the registration, detailing of the vehicle following freight to the car yard, fitting of ompliance components, removal of protective tapes and plastics, fitting of number plates" etc.. In other words costs that should be included in the delivered price.
  2. Registration charges. All vehicles need to be registered in the name of an individual or a company name. These are registered with the bureau of motor registration in each state and territory. Costs and charges vary according to vehicle, type of registration (eg business, private, primary producer) and the status of buyer (eg pension car holder).
  3. Stamp Duty. This is payable to the relevant state/territory and is a function of the price of the vehicle. Again, some concessions may apply depending on the status of the purchaser.
  4. Luxury Car Tax (LCT). This is payable for vehicles whose price exceeds the current LCT threshold and is a function of the amount exceeding this threshold. Not a clever tax and it is currently under attack, but it is not dead yet.

At the present time perhaps the most costy and time effective way of purchasing a car - both new or secondhand - for immediate use on arrival is to use a car broker.  There should be no cost in using this approach - they are paid referrals by dealers - but you need to ensure you are dealing with reputable firms.

Of course, your car needs to be insured - at a minimum having compulsory third party cover,and usually comprehensive cover will be taken out for new cars. Remember, bring details to Australia of your current vehicle insurance arrangements and, particularly, your no claim status. Not doing so can be expensive. It's hard to generalise, but no record at all will mean a Rating 6, whilst a five year no claim period will mean a Rating 1 - there is a very big difference in premium.

Please use the contact form below if you want to arrrange cost effective car insurance from a broker who is experienced in dealing with expatriates and migrants.