Buying a car: Part 1

After buying a house, a boat, a surgery, medical equipment, superannuation and paying off a HECS debt a car is likely to be the most expensive purchase most doctors will make. That is of course unless you have children to educate or a high maintenance ex-spouse.

The government made all of us think twice about expensive wheels when they brought in the luxury tax threshold with a 25% percent tax on everything over $57,009 and no deductibility on the upper bit either. So in the interests of the bulk of this magazine’s readership most of what I’ve got to say is going to be about the mathematics of buying an average car under $57K.

First of all let’s get one thing straight, the only thing more stressful than dealing with a car salesman is a viva or a rectal examination. Psycho-dynamically, these guys don’t have the super-ego development inherent in the rest of us. They seem to be immune from most of the ailments that afflict doctors like conscience and guilt.

That lack of super-ego means car salesmen usually don’t get depressed, but it also means that we customers shouldn’t believe too much of what they say. So it’s a good idea to make sure that EVERYTHING you’ve discussed is written into any contract, particularly details of the colour, options and build date (more about that later).

Car salesmen aren’t particularly well-paid and only earn about $70 commission on each car sold with $200 extra if you pay the full price (unlikely) or take up the dealer’s finance (not recommended). They aim to sell at least 16 cars a month and rely on their retainer and company car to make a living.

They are programmed to find out two things when you walk into the dealership.

Q1. Can you afford it?

And

Q2. Are you ready to buy now?

An enquiry about what line of work you’re in with a response like “I’m a doctor” gives them the answer to Q1 and their sixth sense about you gives them the answer to Q2.

It never pays to fall in love with the colour, shape or reputation of the car and buyers of the Golf GTi need to tread very carefully after their test drive. It also pays to be coy and I personally always tell them that I’m buying the car for my wife who’s too busy to come down, and of course they’ll never get to meet her.

You see the next rule of selling cars is always to make sure that the person who makes the decision is physically in the dealership, and once there no one is ever allowed to leave until the signatures are on paper.

I have found it very helpful to take a crying baby with me during negotiations though this only works if you’re ready to do the deal and know exactly what you want and how much you’ll pay. And of course if your spouse really is the purchaser it helps if one of you looks disinterested, that you’re both in a hurry and “one of us (which one?) will get back to you”.

You see car salesmen have honed their skills for decades and their techniques haven’t changed for 50 years. Selling cars is the job they do every day whereas you and I only buy a car once every five years or so. They use the classic good-guy/bad-guy technique and the salesman is there to be your friend who helps you deal with that nasty boss out the back, so BE WARY.

Doctors tend to be far too ethical, honest and gullible for their own good and that’s what makes us a soft target in the commercial world where a promise isn’t generally worth as much as the Hippocratic Oath.

Assuming that you’ve made your mind up about exactly which vehicle you’re after, I can’t stress enough the importance of making sure that description is written into the contract. It’s particularly important to specify the year of manufacture as buying a car that was built last year will be worth thousands less when it comes time to trade it in. Though dealers say they use the date on the compliance plate to value your car, I don’t believe them as they’ll use any excuse to talk your price down at trade-in time. Besides, if you care to check your rego sticker or insurance documents, the year of manufacture is the only date recorded and it’s the only date used to determine financing and what sort of pay-out you’ll receive in the event of a total write-off.

If you do intend to buy a car that was made last year it’s worth remembering that its value has depreciated twice already and that should be reflected in the price you pay. It may be “brand new”, but it isn’t worth as much as a car built in 2007.

I may be labouring the point about the lack of ethics of car salesmen, but I’d strongly recommend checking the vehicle’s year of manufacture BEFORE handing over any money.

Safe motoring,
Dr Clive Fraser

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    Medical Motoring is an online record of the articles written by Dr Clive Fraser and published in the Australian Medicine magazine by the Australian Medical Association.