Traveling in Australia by renting or buying a car

How to Rent or Buy A Car In Australia

Buying or renting a car in Australia – or anywhere for that matter – can be really stressful. But rest assured, the Australian process of owning a car is similar to other countries, but that doesn’t mean there aren’t any domestic subtleties to look out for. Here’s everything you’ll need to know on how to buy a car in Australia (or rent, too, if that’s what you prefer!)

Australia has an impressive metropolitan way of life but the rural alternative thrives along with it, too. So, hitting the roads without having a personal car may be a bit of a disadvantage. The perks of having your own car? You can wander into the remotest of areas and not be bothered about commutation.

Driving gives you wings (or rather wheels) to go wherever you want. In the 21st century, driving is regarded as a life skill. Whether you want to make it to work on time, save extra time during commuting emergencies, or simply use it for rest and recreational purposes – buying a car in Australia comes packaged with several perks.

Both leasing and buying a car in Australia are great options to become the boss of your own life. While the former is great if you wish to try out different cars or in the country for a few years, the latter is well-suited for permanent settlers and individuals who see it as a permanent investment.

How to buy a car in Australia?

Before you dive into the process of buying a car, here are important must-knows before making the investment.

1. What kind of driving licence are accepted in Australia?

Before thinking about buying a car in Australia, it’s important to know if your licence is approved for Australian roads. Non-natives can use their English language licence for about three months. After that, obtaining an Australian driver’s license is statutory.

2. Road rules and regulations in Australia

Like everywhere else, the rules are fairly similar:

  • Always drive on the left side of the road
  • Carry your driving licence with you at all times
  • Keep an eye on the changing speed limits of the different roads you drive by
  • Avoid U-turns at traffic signals
  • Avoid using the phone while driving
  • Australian distances are measured in kilometres
  • Watch out for the wildlife that might make a surprise visit on the roads
  • Do not drink and drive. The legal blood alcohol limit in Australia is 0.05 percent, so you could be levied a big fine for violating this law.

3. Cost of owning a car

The car prices in Australia range anywhere between $14,000 to $22,000. This difference is huge when comparing different regions of the country, with Sydney emerging as the most expensive place to buy a car in Australia.

With many factors like fluctuating gas prices, insurance instalments, driver’s age, car model, gender and more – there is no certainty about the price of a car in Australia. Only after completing the formalities mentioned earlier, you will know the exact price of your car. But do note that even as you look at the average cost of buying a car in Australia, prices differ from one city to another.

Adding to these costs are car registration and inspection fees that vary from state to state. Tip? Car prices in advertisements are always marketed as cheaper, as the prices are not inclusive of all the surcharges levied on the car purchase.

Similar to how all cars require registration fees, car purchases are also subject to a tax levy called Stamp Duty. It varies depending on the cost of the vehicle purchased and across states. Several online calculators are available at the buyer’s disposal, this ensures that they have a rough idea about the sum they are about to pay.

4. Where can you buy a car?

The digitisation of businesses has taken the world by storm, and car businesses, in particular, are no longer behind in the race. There are several agencies, automotive e-commerce portals and websites providing potential buyers with online access to an enormous variety of vehicles, in the comfort of their home.

The search preceding the actual purchase of a car in Australia can be best tackled with the help of the internet. E-commerce portals have listings from both dealers and private sellers. Another great thing about starting your search online is you get to compare and make a cost benefit analysis simultaneously, which might not be possible if this were to happen through in-person car viewings.

Combining internet search with in-person visits may be the safest way to go about buying a car in Australia. Most of the time, car dealerships are situated in the countryside with ample space to exhibit a huge variety of vehicles for potential buyers to pick from. However, if you are short on time, there are delivery options, too.

Some of the renowned places to buy a car in Australia are: CarsGuide, CarSales, Drive, Trading Post and Car City.

5. Registering the car

The necessary, legal requisites for registration of a car in Australia are as follows:

  • Identification documents like passport and an international or English language driver’s license
  • Sale receipt
  • Roadworthy certificate (RWC)

Roadworthy certificates have very high regard in car businesses and without it, a car is deemed unfit for the roads. This is very important and you should definitely not purchase a car if it does not have a roadworthiness certificate.

Registration is tricky business and can sometimes require a permanent address. However, you can seek help from international companies and hostels for the postal address, if needed.

6. Car insurance

Getting car insurance is a legal mandate for driving a car on Australian roads after you’ve purchased it. The insurance market is booming with several options to help you out in getting through this compulsory requisite. Just know: If you don’t get car insurance, chances of you paying heavy fines are almost inevitable. So, if you wish to not spend any money apart from buying a car, make sure to get your coverage.

Expect an estimate of $600 to $1,100 for comprehensive car insurance.

7. Financing a car

Opposed to conventional haggling, buyers can approach the buying situation through their employer or companies. A great way to go about buying a car in Australia, is to enter a novated lease.

A novated lease is a three-way contract between employer, employee and leasing company that dictates that the cost and operation of a vehicle is to be borne by the employee. This results in a low taxable income of the employee, but the responsibility of the lease will lie with the employer.

How to rent a car in Australia?

Australia is a stunning country with the world’s finest megalopolis, calling both locals and tourists to hit the road. Natives have it easy, and traversing the Australian cities is much easier for car owners, but what about those who do not own a car or are not Australian residents?

Car leasing is a common practice among such individuals, but how does leasing a car work in Australia? Below are some important things to consider.

1. How long you need the car for

The duration for which the car is required is a very important question to address before you rent a car. Commuting in Australia, like any other place, would be much easier if you have your own car. Typically, for any stay beyond three months, renting a car would prove to be a much more economical decision. For visits less than three weeks, car leasing in Australia might be an even bigger expense compared to buying a used car in Australia.

2. Car lease terms in Australia

  • Car leasing terms in Australia, generally range between 2 to 5 years.
  • Drivers should be at least 21 years old to rent the car, that’s the minimum age to rent a car in Australia
  • Have a driver’s license for at least one year
  • A good credit score is a must

3. Where can you rent a car from?

There are three ways in which you can get your hands on a leased car in Australia:

  • Speak to a rental agency directly
  • Book a car through a car rental portal online
  • Compare prices of cars on car comparators like Airport Rentals.

Alternatively, you may consider getting your car from some of the best car renting giants in Australia: Europcar, Avis, Hertz, Budget and Thrifty.

Simply take your debit/credit card and driver’s licence with you and you are good to pickup your car from any city or point of your choice in Australia.

4. What’s the cost of leasing a car?

Car leasing prices in Australia vary with cities and agencies. Ranging from $25 to $150, below are the rates of car leasing for different type of car:

  • $30 per day for an Economy Car
  • $40 per day for a compact SUV
  • $45 per day for a SUV
  • $60 per day for a five-door Car
  • $80 per day for a Sedan
  • $80 per day for a 4WD or a station wagon
  • $100+ per day for a premium car

Note that renting a car is a lot more expensive in smaller regions like Byron Bay than big metropolitans like Sydney and Brisbane.

5. Deposit

A deposit is levied as the security cost of the vehicle you rent. The amount is refundable, given you return it well within the stipulated period. The deposit amount is also decided upon the type of car and the driver’s age.

6. Insurance

Getting car insurance can be a good idea, as it includes coverage for any damage to your rented vehicle. In some cases, it can even include a breakdown assistance add-on. Note that, in the case of car rentals, agencies still mandate a deposit – this means only insurance will protect your vehicle.

7. Cancellation charges

Cancellation charges are the deposit amount you paid during the booking. The company keeps it as a compensation for not leasing the car, due to your booking. Some agencies also levy a penalty for such behaviours.

8. Mileage

Car rental pricing happens in two ways: unlimited and limited mileage.

Opt for unlimited mileage if you’re travelling far and don’t mind paying for the many kilometres you use it for.

If you aren’t travelling far, limited mileage might be a better option. In this case, a cap is put on the kilometres you cover via the vehicle. The typical charge per kilometre in such cases is 25 to 30 cents.

9. Additional fees

Sometimes a car renting agency can raise the charges, in cases of equipment additions like GPS, car seat, etc. As 21 years is the lower limit of the age range, anyone below that age must pay an additional fee to get the lease.

10. Early termination of lease

In case you want to terminate your lease before the decided period, there are few options to go about it:

  • Buy the car yourself and then sell it. Keep in mind that there are taxes which would be applied if you’re selling it to a third party.
  • Trade the car to a dealer and get your payoff amount. In this case, you don’t have to worry about the taxes, the dealer and the lease company can handle the purchase on their own.
  • Pay the termination amount and the remaining depreciation value to the lease company. Buying the car and selling it is a much better option as compared to this, if you’re facing a crash crunch.
  • Take leasing companies help and request them to reduce the amount or a relief for a few months. This is a great option to save up bucks on those extra penalties.

For some cars are a luxury, but the modern world views it as a necessity. Whether it’s through buying or leasing, cars give you autonomy and a sense of security when venturing in unknown areas. Driving is an important skill as you’ll never know when an emergency will arise.

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