So, you’ve fallen in love with that special new car. Maybe you saw it in traffic, in advertising, online, in a magazine - whatever. You know, it’s probably time to get the checks and balances right - otherwise, down the track, that new car you loved so much initially might just turn into Glenn Close and start boiling your bunny. And nobody wants that.
Have you ever bought a new car without checking these six things?
Problem #1: WHEN WAS IT BUILT?
This actually happened the other day. A listener of mine on Radio 2UE in Sydney put a deposit down on a car in January 2015. This month. The dealer said not to worry; he’d fill in the details on the contract. No worries. (Hear that? It’s the sound of warning bells… I’m thinking ‘air raid siren’.) Anyway, it turns out the car - a Suzuki S-Cross - was actually built in 2013. The compliance plate went on in 2014, and the car was set for delivery in 2015 - can you believe it? So you know what happens at trade-in time, right? You go in presuming it’s a 2015 car you’re trading in. The dealer then gives you the ‘built in 2013’ story - and attempts to subtract another two years’ depreciation from the trade-in value. And you know what? He's got a point.
The moral to the story is simple - don’t sign a contract or pay a deposit unless all the details are in, and get a discount if you’re actually buying old stock - last year’s model - because you are certainly going to pay for it at trade-in time. Every vehicle’s build and compliance dates are stamped under the bonnet.
Problem #2: GOING SPARE
This is a real hate of mine. Space saver spare tyres are one of the car industry’s great, enduring frauds. They are of absolutely no benefit to you. They’re limited to 80km/h, and they don’t grip the road very well. Brilliant. Great fun on the freeway, in the rain, with everyone else whipping around you at 110km/h, and you doing 80. Unfortunately, the first time many people discover their car actually has a space saver spare tyre is the first time they get a flat. On the freeway. In the wet. At night. Always investigate your intended new car’s spare tyre, at the dealership, before paying a deposit - and sometimes you can negotiate to fit a full-sized spare. If it’s critical to the sale, the dealer might even throw it in for free. If you only ever drive 15 or 20km from home in suburbia, space-savers are probably OK. But if you get out on the highway, even occasionally, don’t risk your life by buying a car with a space-saver. They’re a joke. Especially on SUVs - one of the things I deeply respect about the mighty long-term Santa Fe we’re currently evaluating is its standard full-sized spare.
Problem #3: THE DARK SIDE
You don’t normally test drive at night, right? But there are two things you really should check here: outside the car, you need to know whether the headlights - and in particular the high beams - are adequate. Some cars are just anorexic in the high beam department. Again, not so important if you only ever drive in the city, or suburbia. But very important in the country - it’s quite black out there in regional Australia at night. Nice to be able to see a kangaroo a couple of hundred metres out, not just when it’s bouncing off the windscreen. That can be quite surprising. And interesting. So it’s always better if the high beams on your next new car are more like Luke Skywalker’s light saber, and less like a three-year-old kid’s night light.
Inside the car, the reverse applies. Dimmers on instruments are great for driving in isolated areas at night - you dim the instrument lights down to maximise night vision out there on the road ahead. Very important. But the big, fat centre LCD display often doesn’t dim sufficiently (or at all) for night driving.
Bear in mind, neither of these things really matter if you’re only driving in brightly lit cities. But it’s pretty important on the highway. Both of these checks are vital for safe night driving away from the bright lights, and it’s a dud deal to discover your new car is a night driving junior burger - after you’ve forked out the big bucks and parked it in your garage. It’s hard to fix at that stage…
Problem #4: BUY NOW, PAY LATER
There are two ways to lose money on a new car. You can pay too much for it up front, or the depreciation can burn you at the back end of the deal. People are often obsessed with getting the lowest possible price up front - often ridiculously fixated on that - and at the same time they don’t even think about depreciation. So - OK - all cars depreciate, but some depreciate like Dresden on the ides of February, 1945.
A classic example here was in last month’s Ford Territory review - which Ford fans hated, principally because it’s such a lemon. Mechanically as well as on the depreciation front. Take a look below.
Above: Two almost identical 2009 SUVs. The Toyota Kluger and the Ford Territory. So the Kluger would have cost $1000 more upfront for the KX-S seven-seat V6, but at resale time you’re actually about four-and-a-half grand better off - that’s almost 22 per cent more cash, after knocking a grand off the top for the purchase price disparity.
It pays to do your homework on depreciation - and here, past performances are excellent indicators of the future.
Problem #5: IMMINENT UPGRADES
If you’re not a deadset car enthusiast, you probably don't focus too hard on the car industry's upcoming product pipeline. But you should, at least when you’re in the market for a new car. Because you don't want to buy a nice new whatever, and see the manufacturer upgrade it four weeks later. Even a mid-life upgrade (just the hair and makeup) is a bit of a disaster because a) it usually comes with more standard equipment at the same price and b) the one you bought - the suddenly ‘old’ model - becomes instantly obsolete and its value takes an immediate hit.
You need to let your keyboard do the walking here: google the car you want and keywords like update, upgrade, plus the current year and the next year. Find out what’s going on in the near future. The car industry is very bad at keeping that a secret. So at least it’s easy to do the research online.
Problem #6: THE FIRE SALE
Here's what the car industry does with its marketplace dogs. The cars that just don't sell: when all else fails, and sales have flushed themselves halfway to the deep ocean outfall, the manufacturer bends over and drops its pants. Every time. They fire-sale the price in an attempt to prop up or stimulate sales. Generally unsuccessfully - because no matter how much extra icing you smear creatively over the underlying cow turd, you’re never going to make a birthday cake.
Holden has dropped its pants and declined the kind offer of lubricant on the latest Cruze and Commodore, and Ford has just played the same undignified 'daks-down, desperation' card with the Territory. Although none of them put it like that in the press releases...
So I guess that's good news if you desperately want a Cruze, a Commodore or a Territory (but if you do, get professional therapy - talk about three of the worst possible automotive choices… Of course, if you actually bought one of these marketplace lemons a few months earlier, guess what happens to the value of your car? It just evaporates. Desperation discounting by manufacturers slashes the same amount from the value of the lemon you own - because used car prices vary directly in line with replacement cost.
So there you go: Six things you probably weren’t considering while you’re poring over the specs and the pretty pix of your possible next new vehicle.