Beginners guide to buying a car in Australia

Please note: All the statements in this text about buying a car in Australia refers to New South Wales, the state that Sydney is located in. For other states, the procedures are largely similar, but not the same. But even if you want to rent / buy your car in other states, this guide should still be a great help!

Buying a car in Australia: Overview

As you might know, we currently live in Australia. After Emma finishes her studies in Sydney in November, we want to go on an extensive road-trip around the whole country. Since we haven’t been able to see much of Australia yet (other than some major cities), we figured we would need at least a good half year to do so. Other people we spoke to confirmed that, stating they needed between 4 and 12 months for their trip.

Now, when you’re planning a road trip for any longer than about 2 to 3 months (depending on the country), it’s probably not worth renting a car. Even the cheapest companies – and rentals in Australia are not exactly cheap – will charge more than 40 Dollars a day for long term rentals, which after 3 months comes to about 4,000 Dollars. That said, these 4,000 Dollars won’t get you an off-road rental and you won’t be able to sell it at the end of your trip either, since it’s not your own.

If however you decide to buy a car, you can buy anything you want. You can also convert it into anything you want and you don’t have to worry about dents and scratches. Furthermore, when you’re done with your trip, you can still sell it. That way you’ll make some money back, even if you don’t manage to sell it for a great price.

The thing is: The whole process of buying a car, registering it and getting the necessary documents is not easy. Especially not in Australia, where it’s a time consuming and expensive affair.

We’ve now been through all of it and over the course of a month we went from “What the hell is all this” to “Right, we’re all set”. But it was a bit annoying and expensive – yet not as expensive as a rental car would have been for the same amount of time. Especially not a 4×4 rental for at least half a year.

This is a rough outline of our planned route. Circumnavigating Australia clockwise with a good bit of outback driving. Even without any detours and stops, the route is already more than 18,000km long: Almost half of the earths circumfence! We’ll most likely end up driving 25,000 to 30,000km in total.

Should you buy or rent in Australia?

It mostly depends on two things: How long you’ll want to drive for, and whether you’ll include off-roading or not. You might say off-roading is nothing for you, but then again: most of Australia is rural and in those areas, there are many sights you can’t access via sealed roads. There is only one highway crossing the Australian outback that is completely sealed (Adelaide – Darwin via Alice Springs, including the road to Uluru / Ayers Rock). For all other outback roads you need to have a car with four-wheel drive.

So: If you want to go way off sealed roads, buying a car in Australia is your best bet. 4×4 rentals that allow you to go on gravel roads are super expensive and unless you’re only going for a couple of weeks, it’s not worth it.

If you do want to mostly stay on sealed roads only, a rental car or rental camper van will do instead of buying a car in Australia. Should you wish to be on the road for longer than 3 months, definitely consider buying your own car. For rentals, our favourite company is Jucy, as we never had any problems and always found them to offer reasonable pricing. We’ve rented from them about five times over the past year. Mostly for short trips to surrounding sights like a day trip from Cairns or a day trip from Sydney.

What car should you buy?

Again – it obviously depends on what you’re planning to do. We want to drive a lot, on and off road, AND sleep inside our car. If you want to sleep in a tent or in motels only, a smaller car will do. If you really want to go off the beaten path, get yourself a Land Cruiser. They are some of the most reliable cars ever made with great off-road capabilities. And even if something goes wrong, there are spare parts for these cars even in the most remote settlements. We decided since at least 90% of our driving would be on sealed roads, we won’t need a Land Cruiser.

For us, these were the top priorities:

  • Good on-road capabilities and nice to drive for 6+ hours per day
  • Good off-roading capabilities for beach driving, outback roads and small river crossings
  • Enough space for a double bed in the back (I’m 6′ 1″ or 186cm)
  • All of that for a good price (preferably under AU$5,000)

The combination of these four was not easy to find, but after a few weeks of looking around we found one that we liked.

It is a common advice to not buy from backpackers. They’re often said to mistreat their cars and not maintain them well. However, we still did, and at the end of the day, you’ll be wanting somebody to buy it from you. They had only had it for a couple of months and before that it was family owned for the entire 16 years of its existence. The added benefit was that they had already built a bed construction in the back of the car. Plus, they gave us lots and lots of stuff we’d need on the road like camping equipment.

We settled for AU$5,500, which was alright for us seen as all the camping stuff and bed would save us more than AU$500 of future expenses. And here it is, our 2001 Mitsubishi Pajero 3.5 V6 Exceed:

With a long enough bed in the back, super comfortable and quiet to drive on long trips. With fairly good off-roading capabilities and tons of camping gear, and for only AU$2,750 (roughly US$2,000) each. Let’s hope it lasts!

As for the question of Unleaded or Diesel: Tough to answer. Diesel costs more in Australia and cars are more expensive to buy, but the fuel consumption is of course a lot lower. While it might have saved us a bit of money, we weren’t sure it would do, and thus went with Unleaded as it’s a lot more common in Australia.

Where to look for cars?

When buying a car in Australia, you definitely won’t want to be buying a new one and most likely it’ll be more than 10 years old. At least it should be, because you’ll want its value to be kind of stable. While a car probably looses 30% of its value in the first year, it’ll be more like 3% of its original value in the tenth or fifteenth year.

This leaves you with two options: A local dealership or a private person. Cars from private people might be cheaper, but cars from dealerships should have undergone a check. See how you feel about it, but even if it’s more expensive to buy from a dealer, it might pay off later on.

We bought our car privately. We also had a look at a Toyota Land Cruiser before we decided for the Pajero. However, first of all it looked a lot more battered in reality than it did online. Secondly, the owner was pretty intimidating, so we decided it was better to move on. That proves: Always have a look at it in person and test-drive it!

For listings of cars, go to Gumtree.com.au as well as Carsales.com.au. Those two websites are definitely the best to check on a daily basis.

Can you buy a car on a tourist visa?

Yes you can! There are no restrictions on visas when you want to buy a car. While Emma is here on a student visa and I’m here on a working holiday visa, we were never asked any questions about our visas and we also know people who have done what we’re doing, while being in Australia on a tourist visa.

Whether you are entitled to use the electronic visa waiver program or you’re on an actual paid tourist visa, it doesn’t matter. You can buy a car, register it, insure it, and so on, even if you’re just on holiday, for the same price as a local. All you need is an address to register the vehicle at. For that, backpackers usually use a hostel they’re staying at before they set off on their travels.

What you have to pay attention to is the time limit you can stay in Australia for. If you’re using the visa waiver program, you’ll be allowed to enter the country as many times as you like over a period of a year, but you can never stay for more than 90 consecutive days. So if you’re planning to circumnavigate the country from Sydney in half a year, plan a week or so in Darwin or Perth to fly to Asia for a few days.

Rego, pink slip, green slip, etc. – What is it?

The amount of different things or “slips” that you need is super confusing for anyone not from Australia. In Germany or England, where we are from, we don’t really need any of these, and even if, it’s more straight forward and cheaper.

In this step I’ll briefly explain what these things are, while in the next step I’ll go into detail on when and how you have to care about them and how much they cost.

  • Stamp Duty – A 3% tax that applies on the purchase price of your vehicle.
  • Motor Vehicle Tax – The yearly tax you need to pay for operating your vehicle or in other words for having it registered.
  • Registration / Rego – Your car needs to be registered in order to be driven. You need to transfer your cars registration into your name after buying it. Also, you need to renew it every 3, 6 or 12 months.
  • E-Safety Check / Pink slip – In order to renew your registration, you need this certificate from a licensed mechanic, stating that your car is roadworthy.
  • Compulsory Third Party Insurance / Green slip – In order to renew your registration, you also need this insurance, covering you for injuries or death caused to other people.
  • Third Party Property Damage Insurance – This is optional. Covers damage you cause to somebody elses property (like somebodies car). Definitely recommended.
  • Compulsory Insurance – Covers your own car for damage. Sadly not available to non-Australians.

It is not allowed to drive an unregistered vehicle.

Fees you’ll have to pay and costs to keep in mind

If you buy a car, leave spare money for all the fees you have to pay. These actually vary between the different states, but the amount of money will be roughly the same after all. The following list refers to the fees in New South Wales, the state in which Sydney is located.

  • Car price – We paid AU$5,500 in cash for our car.
  • Rego transfer – When you buy a car, you have to transfer its registration (number plate) into your name. You have to do this within 14 days of buying it, which will cost you AU$32. If you fail to do it within 14 days, the fee rises to AU$147.
  • Stamp Duty – This is sort of a tax on the vehicle price, even when you buy it privately. You have to pay this when you go to transfer your registration into your name and it is 3% of the vehicles price. For us that meant it was AU$5,500*0.03 = AU$165
  • Toll Device – Your car might or might not have a toll device when you buy it. It will usually be found on the upper windscreen. If it comes with one, the previous owner SHOULD have cancelled it. For us, this was not the case, and thus, we needed to dispose of it and get a new one. You don’t really get charged for it as you get all the unused money back when you sell the car and cancel the device. Nevertheless, it’ll be AU$40 deposit for the device plus AU$40 minimum to put on your account for usage. Then it tops up by another AU$40 once you drop below AU$40. So AU$80 to 120 worth considering. This device works across all of Australia.

Those things you have to do right after buying the car. All these things together you can get / sort out / pay at a service location. For New South Wales, this is the relevant website. They have service locations in a lot of places and customer friendly opening hours.

Depending on how long your registration is valid for, you’ll have to continue with the next few steps either immediately, or within a few months, in order to be able to renew your registration:

  • E Safety Check / Pink slip – Before you can renew your registration, you’re required to prove that your car is roadworthy. You can do this by bringing it to a licensed mechanic and ask for an E-Safety Check (also called pink slip). This check-up will cost you AU$39 and can be done within a few hours if your car is alright.
    If not, you can either get it fixed at that mechanic, or you’ll be allowed to drive it for another 14 days and get it repaired at another mechanic or by yourself. For us, this initial repair cost another AU$960 as two tyres and two steering rack boots needed replacement, along with some minor stuff, and labour hours in Sydney are anything but cheap.
  • CTP Insurance / Green slip – The Compulsory Third Party Insurance (also called green slip) is the mandatory insurance everybody has to have in order to renew the registration. It covers you if you injure or kill somebody in a car accident. This one will set you back a further AU$850 to AU$900 per year, depending on which one of the insurance companies you choose.
    In New South Wales, you can choose from these six companies. We used NRMA as we’ve heard good things about them. You can pay this fee annually or half the fee on a six months basis. This can be done online, over the phone, or in a store location of your insurance company.

Now you can proceed to renew your registration. This can also be done online or in a store location.

  • Rego renewal – The fee to renew you registration costs AU$64 for a year.
  • Motor Vehicle Tax – The Motor Vehicle Tax also has to be paid upon renewal of your registration. You’ll find more on the cost here. The prices listed on the website apply per year and depend on the tare weight of your car. For us this is AU$448 per year as our car weighs just over 2,000kg.

You can pay these two together online either every 3, every 6 or every 12 months. For us this would have been AU$128, AU$256 or AU$512, respectively. We chose the annual option, since otherwise we’ll probably be on the other side of Australia when it’s time to renew. And if the online option fails, we’d have to actually return to New South Wales!

Now, even with all those costs, you’re still not covered for damage to your own vehicle or another vehicle for any given reason. The mandatory CTP insurance costing almost AU$1,000 a year literally only covers you for injuring or killing other people. Nothing else, not even your own injuries if you’re at fault. Thus, you should consider further insurance:

  • Cover yourself – The CTP / green slip insurance doesn’t cover yourself if you’re at fault. Because of that, be sure that your current insurance does cover your own body if you cause an accident in Australia. If not, take out some sort of travel insurance that covers you for that.
  • Third Party Property Damage – And even if you don’t hurt anybody… Should you crash into an expensive car without having this insurance, that could quickly ruin your financial existence. As the word “property” suggests, this also covers you for other things than cars. We haven’t taken this insurance out yet, but we will soon. Different quotes ended up around AU$450 a year, with both of us not having been involved in any previous car crashes.
  • Comprehensive Car Insurance – Finally, you might want to get insurance on your own car. Bummer! If you’re not a resident of Australia, this is not possible! For whatever reason, you’ll be responsible on your own. There is no opportunity to be covered in case of damage to or theft of your car. Pretty ridiculous in my opinion. Because of this, don’t buy a car that’s too expensive, drive carefully, and never leave it unlocked. If anything happens to it, you’re going to have to pay for it.

That’s about it. A whole lot of money. Do expect to spend at least AU$ 3,000 within a couple of months of buying your car. That is, if you pay all the fees on a yearly basis and not much goes wrong in terms of the safety check.

Then there are the running costs like with any vehicle. We won’t go into detail too much here, but a major part is the fuel.

  • Fuel – Fuel, petrol, gas or whatever you call it is a major cost factor on any road trip. Even more so, when it’s a half year long road trip in a 4×4. One litre of fuel generally costs between AU$1.00 and AU$1.60 in urban areas, with costs exceeding AU$2.00 in remote outback locations. Diesel is usually about 10% more expensive than regular unleaded fuel.
    Don’t underestimate this cost. If you drive an average of 200km a day for six months straight, that will be 36,000km. Our Pajero consumes about 13 litres of unleaded fuel per 100km, so the estimated fuel cost for 36,000km would be way over AU$5,000, especially so with filling up in remote places. We’re expecting to cover an average of 150km a day for five and a half months.

After all…

… it’s an expensive and complicated process with lots of taxes / fees and documents / checks to take into account when buying a car in Australia. Australia is an expensive country and you have to face that. Only the fuel is not that bad compared to countries in Western Europe.

BUT: You’ll be rewarded with one of the most unique experiences you can get anywhere in the world. Just you and your car, in the middle of nowhere, with nobody to be seen anywhere around. Stunning landscapes, lonely beaches, and places of immense natural beauty that you’ll have all to yourself. Freedom to go and stop wherever and whenever you want.
These days it’s getting very touristy very quickly in a lot of places around the world and also in a lot of places in Australia. But with an offroad car, you can venture out to just about anywhere. You’ll be surprised how many natural sights there are out there, that almost nobody has ever heard of.

We hope it’ll be worth buying a car in Australia, and can’t wait to start our adventure in January 2018! 🙂

Are you planning a road trip around Australia, or want to? We’d love to know!

READ NEXT: 10 WAYS TO SAVE MONEY ON ROAD TRIPS

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A Beginners Guide to Buying a Car in Australia
A Beginners Guide to Buying a Car in Australia

By | 2017-08-09T15:08:15+00:00 June 2nd, 2017|Australia|Comments Off on Beginners guide to buying a car in Australia

About the Author:

Hey! We're Emma and Yannick! A travel blogging couple who met in Thailand in 2014, and since then we have visited over 20+ countries with no plans to stop! We travel the world in luxury, without paying the price for it, through travel hacking and insider knowledge. Through this, we love to help and teach others to travel well for less, just like we do!