Expats: Acquiring a Car in Australia

November 4, 2019

 

Depending on personal circumstances, Expats may decide to buy, lease, rent long term or car share when relocating. We run through these options, how it all works here in Australia and some considerations specific to Expats..

 

After setting up a bank account, acquiring a mobile phone and finding a place to live and school for their children, most Expats then turn their minds to the next step of acquiring a car.  This makes sense, as not only does it often make life in a new city a lot easier, it is almost a necessity for exploring the surrounding areas and further afield.  So, let’s have a look at the various options for Expats acquiring a car in Brisbane (or elsewhere in Australia).

 

Car Purchase

 

The most straightforward way to acquire a car is to buy one. If you decide to buy a car and you have sufficient funds to purchase without financing then it is simply a matter of deciding on which type of car you require and then visiting (online or in person) or calling the appropriate dealerships in your area to source the best pricing.  In Australia, Car Sales and Drive are good online sources for vehicles.  

 

If you are buying ‘new’, there are often end of financial year run out sales each year - but keep in mind the end of financial year in Australia is July 1, so these types of deals are usually available in June.  There may also be demonstrator models on sale at certain times of the year as new models are released - this normally follows the car manufacturers calendar, so best to check with them.  

 

In principle, the best approach is to use the internet for research and then go to a dealership that has a large stock of vehicles or a specific car you are interested in. Searching for cars in the digital marketplace is a great place to start, as it provides Expat buyers with a certain degree of price comparison and transparency that they need to properly assess the cost of a car in Australia. Many are surprised that the models/costs they are familiar with at home are not applicable here. But we do not always have enough time, so if buying new, it is not uncommon for purchasers to buy a car ‘sight unseen’ from reputable dealers.  If this choice is suitable, there are usually transportation options for delivery of the vehicle to you.

 

For second hand car purchases, the easiest way to shortlist vehicles is by searching through online sites such as Car Sales. The benefit of purchasing from a dealership is that they handle all the paperwork, such as:

  • Vehicle Registration (REGO);

  • Third Party Compulsory Insurance, 

  • Roadworthy Certificate; 

  • Stamp Duty and transfer costs; and 

  • often include vehicle warranties.

Purchasing direct from a private seller may result in a better price for a vehicle but may be more intimidating and requires more work and risk management by the purchaser. If buying from a private seller do ensure that you verify the seller’s ownership prior to purchase and ensure that the car has a road-worthiness certificate (see above) or you may wish to arrange a mechanical check of the vehicle (do it yourself, if you have the knowledge, or take the vehicle to a qualified mechanic).  You will need to do all the change of ownership paperwork (REGO) and arrange Third Party Compulsory Insurance yourself.

 

Both private sellers and dealers will often be willing to negotiate on the advertised price of the vehicle by 10-15%.  Dealers may ‘sweeten the deal’ (especially on new cars) by offering optional add-ons such as roof racks, premium floor mats, window tinting etc. When ascertaining total car purchase costs pricing ensure you also include on road costs such as stamp duty and registration transfer costs (often included by dealers but not by private sellers). 

 

Financing

 

It is important to note that if you require financing, you may find it difficult to obtain a bank loan or car financing from a dealership if you are in the country on a temporary visa. The main reasons being that the Expat has no local credit history and secondly, as a temporary visa is only for 2 years, and car loans are generally taken out over 3 to 5 years, regular financing is not suitable for someone potentially in Australia for a shorter period.  

 

One solution is to arrange a loan with your bank or lending provider in your home country prior to departure and have the money transferred to Australia, available to make the purchase upon arrival. 

 

Lack of credit history can be an issue for permanent residency holders as well and you may be forced to borrow at higher than market rates from a limited range of bad credit/no credit history local loan providers (or borrow before you depart your home country).  Where available, finance terms for dealer/manufacturer loans vary, but can typically be arrange for periods of 1 to 4 years with monthly repayments and then final agreed value of the car at the end of the loan period.  At the end of the loan period the car can be returned to the dealer and the loan is fully settled as long as there is no damage and the agreed km/year has not been exceeded.

 

Car brokers

 

Car brokers, such as National Car Brokers and Private Fleet, can also arrange for car purchase and finance for new and used vehicles.

 

Car Lease

 

A novated lease is a three way agreement between the employee, employer and a finance company.  The main advantage for the employee is enabling the employee to pay for the cost and operation of the vehicle in pre-tax dollars, thereby lowering the employee’s taxable income. At the end of the lease the employee either pays a residual rule on the lease and takes ownership, or they can trade the car in or refinance the residual and continue the lease.  The employee must be paid in Australian dollars by an Australian entity and the lease has to cease up to 2 months prior to the end of the visa.  This arrangement usually is not appropriate for temporary visa holders.

 

Expatride is a global company that supports expatriates worldwide with car leasing and long term car rentals.

 

Long Term Car Hire

 

Long term car rental can also be a simple and potentially cost effective option for a temporary or short term assignment.  Long term car rental costs include all car registration and renewals, insurance, maintenance, stamp duty, road side assistance and accident management. There are numerous providers including: LongTermCarRental, Budget, Avis.

 

Car Share

 

In capital cities, where good public transport is available, car share is gaining popularity as a way to drive a car without ownership, permanent car parking requirements and costs of upkeep. A range of cars and utility vehicles are owned by a corporation and made available in various locations around the city and suburbs on an hourly basis.  Car sharing companies include: GoGet, Flexicar, GreenShareCar, Hertz24/7.  Peer to peer car share (locals living in a suburb close to you that rent out their own car) is also available: CarNextDoor and DriveMyCar.

 

 

In conclusion, what works for each Expat will differ depending on individual circumstances such as exact home and work location, family makeup and transport needs as well as taking into account affordability, taxation and visa considerations. However, we do strongly encourage Expats to get out there and see the city and it’s surrounds when they can and there is no doubt a car makes this much easier and more fun.

 

Good luck and enjoy your advertures!

 

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