Question 1

WHAT ARE THE DANGERS OF BUYING PRIVATELY?

Accepted Answer

This HAS to be the most nerve wracking way to buy a car. You have No Rights and No Protection. You don’t know the history of the car or the seller. Was it in an accident or even a repaired write off car? Is it still under finance? Was it a car caught in a flood and fixed up? After the purchase you are on your own – all problems are yours. Interestingly from my observation of cars offered on line they are not a lot if any cheaper than offered by a Licensed Dealer offering you all legal protections and warranties.
If it was my family I was putting in a car I would want to sleep well at night knowing the car was safe and I had protection.
Just a bit about cars under finance. If a car is under finance in say Queensland, bought to WA, reregistered and then sold without the financed company getting their money that finance company can repossess the car from you. If this ever occurred via a dealer (they buy all the time) then legally the dealer is caught not you. This safety net is there to protect you the consumer but only when buying from a dealer. Brokerage WA will NOT source a car from a private seller. It MUST go through a dealer to get thoroughly checked and to protect our clients.
If you MUS buy privately, you MUST ALSO do the following:
Put your offer in writing and include the following clauses:
Subject to a written mechanical inspection to the satisfaction of the purchaser arranged and paid for by the purchaser.
Subject to a clear PPSR and Car History Report
PPSR Report - LINK. https://www.ppsr.gov.au/

Car History Report - obtain via CarSales or similar sites.
- No write off incidents reported
- No record of this car being reported as stolen.
- No finance interests reported on this car.
- No outstanding recall reported.

Question 2

IF I SIGN A CONTRACT AT A DEALER CAN I GET OUT OF IT?

Accepted Answer

This depends. Now I am not hedging my bets here however in the simplest terms; if you have signed and unconditional contacts, given a deposit, received a copy of the contract accepted by the dealer it is LEGALLY enforceable. In Western Australia there are NO Cooling Off laws unless you signed as a result of being canvassed for the sale at your home – door to door sales. If you are in an Unconditional Contract to Buy then penalties can be applied – in Western Australia that can be up to 15% of the purchase price of the car. THINK and BE SURE before signing.
IF your Contract has CONDITIONS placed on it as part of your sale then ALL conditions must be met for the Contract to be enforceable. When buying on Contract make sure you make any additional side deals or conditions – from a set of floor mats at No Charge to Delivery on or before a set date – are in writing and initialed by both you and the dealer accepting the Contract. Conditions are good because everyone is clear on intent.
Word of Warning on this one. If you do a deal with Dealer A and then AFTER the contract is signed Dealer B offers you a “better deal” it is too late.   I have seen these get very ugly when this occurs and NOBODY is happy in the end. A Deal is Done when it is signed, unconditional, deposit paid and copy of contract provided. STOP there.

Question 3

DO I HAVE TO TAKE THE FINANCE OFFERED BY THE DEALER?

Accepted Answer

NO. If you are offered a “deal on a car provided you take finance through us” at a dealer this is Third Line Forcing and illegal. Even if in the normal course of business you make application you can pay using funds from another source without signing finance contracts. Always sign finance contracts “on the day of delivery” after inspecting your new car. Once you sign that is like money changed hands.
By the way. ALWAYS be aware of EXACTLY what you are signing. If in doubt, ask.

Question 4

CAN I BUY THE CAR FROM THE DEALER AND ARRANGE MY FINANCE WITH BROKERAGE WA?

Accepted Answer

Yes. Legally you cannot be forced to take finance from any source. Even if you have made an application but not yet signed you can make alternative arrangement, right up to the time you settle the transaction and take delivery.
If you want to know about our full range of Finance Services please click on the link Provident Lending and Business Solutions. We collaborate with Provident Lending and Business Solutions who hold the Australian Credit License.
A car represents the second largest purchase for most people, after their home loan. Never before has it been as important that you do not let emotion and excitement lead you to a loan on a car you can’t pay for. Brokerage WA will always ensure you take your time in making this significant decision; remember we want to help you for many years to come.

Question 5

CAN I HAVE YOU NEGOTIATE THE CAR PURCHASE FOR ME AND GET MY FINANCE ELSEWHERE?

Accepted Answer

Sure can – that is the bulk of what we do. Our first priority is right car, right deal, quality service.

Question 6

DO I NEED TO GET INSURANCE ON MY CAR?

Accepted Answer

Legally if you own the car (paid unencumbered cash) then no – however not a really good idea. Accidents rarely come in under $4,000 and can quickly escalate up to $10,000 plus before write off is a consideration. IF your car is UNDER FINANCE it MUST be Insured and the financier noted on the insurance policy.

Question 7

DO I HAVE TO GET MY SERVICING DONE BY THE DEALER WHERE I BOUGHT THE CAR?

Accepted Answer

No but can be wise to do so. I once owned a Calais V VF Sedan. Possibly one of the best cars I have owned. At 41,000 kms the engine suddenly and without warning started up a death rattle. Rare as rare event for this model. The dealer who sold the car has also done the servicing. Without question Holden considered the economics of it and REPLACED the engine. They could have fixed it up however that would have taken time for me and them. The cost was about the same so with a solid service history a new engine was authortised without question or argument. I can tell you some stories that will curl your hair about “cheap servicing” – maybe over a coffee one day.

Question 8

IS STAMP DUTY INCLUDED IN THE CAR SALES PRICE?

Accepted Answer

Stamp Duty is a State Government charge and works on the price of the car on a sliding scale. See our link to the Stamp Duty Calculator.
https://www.transport.wa.gov.au/licensing/vehicle-licence-duty-calculator.asp

In New Car Sales Stamp Duty is included in the price because the dealer has to license the car for you and it is part of that process.
In Used Car Sales (and Demonstrator)   the car is already licensed at delivery point so Stamp Duty is charged AFTER the sale. You are responsible to make the correct payment to the Government within 14 Days.
It is possible to include Stamp Duty in your negotiated price and as it can amount to thousands of dollars this may be how you want it done. Brokers WA will check this with you prior to negotiating your deal.

Question 9

IS THERE A "COOLING OFF" PERIOD?

Accepted Answer

In Western Australia there is NO COOLING OFF period unless the sale was done under “door to door” sales.  As cars are a big ticket price door to door simply does not occur.
Once we tender out your needs, you accept the tendered price and sign a Contract to Buy a Motor Vehicle with the dealer, and it is accepted in writing by the dealer; other than completing any conditions of sale (such as subject to finance) the deal is unconditional and firm. There is no “changing the mind” or “getting a better deal”.
The Contract to Buy has penalties listed of up to 15% of the purchase price for failure to complete a firm and unconditional deal. The only time this will impact anyone is where the buyer repudiates a legally binding contract. Even then it is likely to be negotiated.

Question 10

IF MY DEAL IS 'SUBJECT TO FINANCE' CAN I GET OUT OF THE DEAL?

Accepted Answer

If your finance is rejected after making a full and honest attempt to obtain finance then yes.
If you do not tell the truth to “get finance rejected” then there is likley going to be a fight at some level.
Remember that when applying for finance everything is recorded and may impact any future application. E.g. If you get “rejected” by a financier then apply via another dealer to another financier the second financier will see your application listed and ask “why didn’t this proceed?”. This may bring up differences between the two applications and place your overall credit score/rating at risk.
Your finance score/rating is exceptionally important and you should protect it at all costs.

Question 11

HOW CAN DEALERS OFFER INTEREST RATES OF 1%, 1.9% AND AT TIMES 0% WHEN THE CURRENT COST OF MONEY IS HIGHER THAN THESE RATES AND MOST CAR FINANCE CONTRACT ARE BETWEEN 6% AND 9%?

Accepted Answer

When the offer is made by dealers it will be on a New Car – most likely a selected model of new car, one they want to move in volume – and generally involve the distributor or factory behind that brand. They work together to bring and offer to market that works like this:
Car is sold at recommended retail price.  NO Discount.
The dealers uses their margin in the car and the manufacturer uses their wholesale margin to offset the real cost of the interest – they pay the finance company the difference between the “real rate” and the “advertised rate”. EG: If they have a base rate of say 4.5% and the offer 1% interest on a special deal then the dealer/manufacturer need to pay the difference over the term of the loan – it is paid upfront effectively giving the finance company an early payment of their interest. You will also find the period of the loan is restricted to maximum 3 years – this keeps the dealer/manufacturer payment to a minimum. You are also restricted to the finance company selected by the dealer and manufacturer.
The object of the offer is to attract people to specific cars because of the “so called” low interest rate, but remember to get the special low rate you must pay retail price for the car.
There is absolutely nothing wrong or illegal with this however it does restrict you and if you want to break away from the offered deal then all special offers are off and you start from the beginning. It can be hard going.
Is there a better way?
Yes there is.
Brokerage WA prefers to help their clients by keeping the various elements of the deal separated – this avoids confusion and allows us to negotiate the best possible deal on the car, the trade-in, the accessories and the finance.
In the end always remember this:
There is a profit in all aspects in car dealing;
The New Car
The Finance
The Insurances
They Accessories & Car Care
The trade-in when sold.
If you add all this potential profit up it comes to a number – actual numbers vary by car and deal however the “pool of profit” is the maximum that can be made. How that is cut up can vary but in the end it comes down to how much the dealer wants to keep and how well you can break down each of the profit areas to get the best deal.
By engaging Brokerage WA we can identify the best way for you to get the best new car deal and MOST LIKELY that will not be advertised by dealers.

Question 12

WHAT IS EQUITY?

Accepted Answer

It is the value in the car that you own – either by way of Deposit or Trade-In Value (after payout if there is one). The greater the equity, the easier you will find repayment, shorter term and less overall cost. Some dealers and brokers may encourage you to borrow 100% – and that is ok if you have clear capacity to make repayments with no potential downturn in your income. Brokerage WA will encourage you to have equity however this is your decision and will always represent your wishes.

Question 13

HOW MUCH CAN YOU AFFORD?

Accepted Answer

If you need to borrow to buy a car; rather than look at the “total $$ cost of car”, consider the monthly payment and your capacity to meet the payment. Provident Business & Lending will work through your assets & liabilities and your income and expenditure so you can see exactly what capacity you have. Once we know the limits you are comfortable with we can then help you Locate Your New Car.

Question 14

WHAT IS THE DIFFERENCE BETWEEN A SECURED LOAND AND UNSECURED LOAN?

Accepted Answer

A Secured Loan is where the financier (bank or finance company) take a mortgage or “title” over the asset – in this case a car. As they have the security of ownership in case of default. It can be expected interest rates are lower provided of course your own credit history shows you to be a person who repays loans in full and on time.
As a secured lender on the car, should you fail to make repayments the financier can repossess the car.
An Unsecured Loan sometimes known as a “personal loan” is given to people who generally have excellent credit history – not security is taken over the asset however the amount than can be borrowed is limited. Interest rates can be higher because of the lack of security over an asset.

Question 15

WHAT IS DEALER FINANCE?

Accepted Answer

Dealers are generally linked to a financier as a result of their borrowings for all their stock. In exchange they offer that financiers loans. This is a source of income to the dealer and it either partially covers or exceeds the cost they have in interest for their sock holding. Remember it is part of the sale and the role of a dealer is to sell their car, their accessories and their financiers finance. They can only offer finance on the car they sell. Brokerage WA offers a selection of financiers and in doing so our objective is to keep your cost down by obtaining the best possible deal on the day.
Remember, dealer finance is convenient however it may also be wrapped up in the emotion of buying a new car. Take your time and consider your options. Keep car deal, accessories, extras ands can finance operate. It may take a bit more time however in the end you will save significant money.

Question 16

CAN I GET A LEASE ON A CAR?

Accepted Answer

If you can claim a tax deduction for the repayments on your car, then yes. A Lease is a rental agreement for an agreed time however at the end of therm ownership of the car is with the Leasing Company. At the end the Lease is terminated, the car is sold by the leasing company and provided there is not shortfall between the final “residual value” and the sale value you effectively walk away from the car and the transaction. You may be able to buy the car off the leasing company however that is their option. Remember, if the car value is higher than the residual value the potential provide is theirs not yours.
Under a Lease the finance company provide the Lease are not obligated to rebate any unused portion of the loan should you terminate prior to the end of agreed term. EG if payments are $800 per month for 48 months then you must make all 48 payments even if you wish to end contract at say 36 months.
This is different to a Consumer Mortgage or Chattel Mortgage agreement. Under these there is a statutory rebate applied to ensure you only pay interest on the time the money was on loan. In other worlds, you get a rebate on the total interest if terminated earlier. Once the payout is made on consumer Mortgage, you own the car.

WE HOPE TO PROVIDE YOU WITH ANSWERS AND CONFIDENCE IN YOUR DECISIONS.

FREQUENTLY ASKED QUESTIONS