Official Money Guide. 25% OFF AT CAS Coastal Auto Supplies for every reader! See terms & conditions.

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1 September 2011 AUST $6.20 NZ $7.05 (inc GST) Official Money Guide for teens 25% OFF AT CAS Coastal Auto Supplies for every reader! See terms & conditions. Sign up free for the NRMA s Free2Go youth roadside assistance. Only available for 16 to 20 yr olds. It s about time for you to start driving and your seriously starting to think about purchasing a car! Look no further. OMG has all the hot tips to get you the best deal! Beep Beep! The How To Guide on buying a car Can you afford it? What s the best style of car for your needs? What are the fixed costs? How do I manage my finances? Go in the draw to win an iphone 4! See to enter. Read and accept terms and conditions before entering.

2 Letter from the Editor Page 3 Buying your first car Page 5 6 In their shoes Page 8 9 Quiz What type of Consumer are you? Page 10 In a nutshell Car insurance. Page 11 Purchasing a Car Checklist. Page 12 Official Money Guide for teens

3 Hey all you Consumers and fellow readers! Welcome to the September Issue of OMG Official Money Guide for teens. If you like saving, budgeting or even shopping then this is the magazine for you. OMG is aimed at teens aged 13 to 16 and focuses on helping young people to become better informed and independent consumers. This months Issue of OMG Official Money Guide for teens is finally out and is all about buying your first car! That s right! CARS, CARS, CARS! You won t be able to think of anything else after reading this issue. I think you will be even talking about it in your sleep! We check out what you need to remember when buying your first car, your essential car purchasing checklist, what to remember when making your financial plan and you get to take a quiz to see what sort of consumer you are! You can also register online at our website to go in the draw for your chance to win an iphone 4! The phone everybody wants these days! Feel free to also check out our website for details or if you have any other info or questions about our magazine! After reading the latest and most amazing issue of OMG you will be ready to go and start shopping around for a car with all the wise knowledge you have learnt about purchasing your first car. So, it s time to start saving and making your long time financial plan and get cracking on the car research. Trust me, you will enjoy the freedom you earn from owning your OWN car and the responsibility you are taking to make sure you do it wisely will cause your rents to trust you and smile with joy just like when you made the promise to feed to dog only if they bought one! Just make sure you keep the promise! Happy reading and don t forget the advice. Hope you find a good car! Best wishes Kahlee xx This issue is Proudly sponsored by: Coastal Auto Supplies Tyres Plus CAS Auto Supplies &

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5 OMG Consumer Advice OMG talks all things Cars and Costs. BY KAHLEE ADAMS S Everything you need to know o you are finally thinking about purchasing your first car! Buying your first car can be an exciting experience and will probably be the second biggest purchase that you make during your life, the largest being the purchase of your home. When buying a vehicle your choices include buying a new car from a dealer, a used car from a dealer or a used car from a private seller. Buying a car from a licensed dealer can be more expensive than buying privately but it offers more protection. This purchase experience is usually a ticket of freedom for teenagers but it can lead you into trouble if careful consideration and thought is not applied. Pocket money or wages earned weekly through casual work may help to provide you with enough money to go to the movies or buy a new jacket however the purchase of a new car will probably be the result of a longer-term savings plan. To put petrol in the car and pay for repairs and maintenance also requires careful thought and financial management. It is important to remember that the ownership of a car involves two types of costs: Initial costs could include the actual car purchase, stamp-duty and dealer delivery charges. Recurring costs which include insurance, registration, servicing (oil, tune-ups and grease), replacing worn components (such as tyres and batteries) and ongoing fuel costs. There are many factors in which you need to consider and determine in regards to your finances before buying your first car. These factors include: The initial cost Cost of insurance Size of the vehicle and fuel economy Time needed to repay money Your lifestyle in accordance to your car You also need to make sure you calculate up front costs such as insurance and on-going costs in petrol and maintenance. It is also wise to get the car checked up by a mechanic so you know of any difficulties or problems with the car.

6 OMG Consumer Advice When looking around for a car you need to be aware of your needs and non-negotiable qualities as well as the desires you like. Some needs might be good fuel economy, at least 2 airbags and fewer than 80,000km when buying a second hand car. Some desires may include the size of the car, USB, Bluetooth and ipod connectivity and the colour you want. The desires are all qualities that you may not have a say in when purchasing a second hand car but are wants that many consumers desire. It is important to remember that when making a major purchase such as a car, decide what sort of car you require and your price range before you start to shop around. Some simple rules which you should follow are: 1. Setting your budget. A maximum price you can afford and don t go above it. 2. Check when the registration runs out. 3. Have the car inspected before purchase (eg: checked by a mechanic). 4. Do not sign anything unless you are sure it is the right car for you and you definitely want to buy it. 5. Make sure everything that was there when you inspected the car is included when you pick it up. 6. Make sure you can afford the insurance and other recurring costs that come with the vehicle. $$$ Getting the finances $$$ There are two ways of purchasing a car; Cash and Credit. When you have saved sufficient funds to purchase the car yourself you can pay cash for it which allows you to instantly receive the car without the worry of debt. When you buy the goods and pay for them later, it is known as credit. There are two main methods of buying the car on credit. They include: Credit Sales Contract where the retailer provides you with credit and car and you pay for them at a monthly rate plus interest. Avoid this as through a car dealer it generally tends to be more expensive. Loan contract where you take out a personal loan from a financial organisation such as a bank and they provide you with the funds to purchase the car plus you are charged interest. In most of your cases you are not old enough to take out a loan so your parents may provide you with a loan and lend you the money that you will eventually pay off, but your best option is to fund the car yourself. Everything you need to know about purchasing a car!

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8 18 year old Madelyn bought her first car recently and gave us some handy hints on how to go about buying your first car. My name is Madelyn - I am 18, live in regional NSW and purchased my first car earlier this year. I worked at a fast food outlet on a casual basis while I was still at school and am now in a gap year before going to Uni. I now work part time at the local RSL to pay for my car and going to Uni. When my mum bought her first car, her parents had a system where if you raised half the money then they would give you an interest free loan for the remaining half to be paid weekly over a certain period of time. This is what my parents have allowed me to do they have to approve the car and I have to pay back the money before my sister wants to buy a car. I had managed to save $5,000 but I set my budget at $8,500 to purchase a vehicle so that I would have enough to cover stamp duty, change of registration and insurance costs (not cheap when you have less than 5 years driving experience). My car payment worked out at $70 per week which means that it will be paid off within 12 months and before I leave for Uni and I have allowed $85 per week for other ongoing expenses. Do your homework - I already knew that I wanted a manual car, efficient but not too small as I would be going to Uni 5 hours away from my home and would need a reliable car with space to bring all my stuff home at the end of each semester. I chose to purchase through a local reputable car dealer so I didn t have the worry of previous owner s unpaid loans, rebirthed cars etc. Most used cars (check on conditions) purchased through a dealer have a 3 month warranty which is great if you find something wrong after the purchase. I did check out to compare car prices as you can also check out cars at local dealers as well this is how I found my car. Teens who have done the deal

9 Keep your mind open I had my heart set on a brightly coloured or black Mazda hatchback and eventually bought a white Ford Focus! I am lucky that my dad works for an automotive spare parts supplier and that he knows heaps of mechanics. Check everything that you can (without being a mechanic) such as the condition of the tyres, radio, headlights (high & low beam), door handles/ locks, boot/fuel opener, windscreen wipers, panel damage, door and bonnet alignment etc. When we took the car for a test drive, we were able to have a mechanic put it on the hoist and give it a good look over mechanically before putting in an offer. It was in excellent condition with full service history in the log book and new tyres. Once you have your car, keep it in the best condition you can this will save you money. Check the oil and water regularly and ensure that the car has regular maintenance checks by a mechanic. I have roadside assistance with the NRMA as a backup for any breakdowns that my arise, especially while I am away from home at Uni. Six months on, I am happy with my car, have no trouble with my payments and have budgeted for my registration renewal, CTP green slip and Comprehensive Car Insurance coming up later in the year. So remember you have to allow for a change of heart and what you may be determined to buy might not always suit your budget or your needs. Make sure you do not judge a car by what colour it is although it is nice to have a car that looks good but it is more important for the vehicle to be economical and reliable. Buying your first car... Teens who have done the deal

10 Start here You found two cars that suit your needs. One is cheaper and the other is $800 over your budget but you really like it. Do you buy the second one even though it is over your budget? When you see something you like in a shop do you buy it straight away? Do you save about half of any income you earn? Do you always have to have the latest product on the market? Do you research a product before making a major purchase? Do you worry whether or not you can afford an item? Do you go to different shops searching for the best value for money on a product? When applicable do you allow for ongoing costs? WISE CONSUMER You make rational decisions regarding your consumerism and how you purchase products. Remember it is ok to buy something you like every now and then without thoroughly researching it. REGULAR CONSUMER You sit between being a wise consumer and being a compulsive shopper. Sometimes you research the product before you purchase it and make rational decisions but at other times you splash out and impulsive buy which is not necessarily a bad thing. IMPULSIVE CONSUMER You make impulsive decisions when purchasing a product and make irrational decisions, not researching your buy before purchasing it.

11 In a nutshell. You MUST have CTP insurance but you do get to chose your Insurer. Compulsory Third Party Insurance (CTP) When you register your vehicle in any state in Australia you must have CTP insurance. This covers injury and death for people in car accidents (coverage varies in different states regarding driver). When choosing insurance, always shop around for the best price and coverage insurance premiums always seem expensive but are particularly so for the under 25 age group due to inexperience. Third Party Property This cover is if your car damages another person s property and your legal costs. It does not cover your car. Third party, fire and theft - This also covers any damage caused by your car to another person s property and includes some cover if your vehicle is stolen or damaged by fire. You are not covered for any repairs to your car if damaged in an accident. Comprehensive This is the most expensive car insurance but also covers the most. It is covered for theft, fire, repairs to your own vehicle as well as damage to other people s property in an accident. Depending on the cost of your vehicle and what you can afford will probably how you will decide on your insurance option. Speak to family members or others for assistance if you are unsure. Remember that different covers provide different Example: If you have a vehicle that is worth say $1500 and you are under 25 you may wish to cover yourself for only Third Party Property insurance. You would really want to ensure that if your car is involved in an accident (particularly if it is your fault) that at least the other party s expenses are covered so that you do not get involved in a lengthy and expensive legal battle as you would be held responsible for any debts. If your car was worth say $8,000 you have more to lose in the event of an accident so would go for say Comprehensive Insurance.

12 As OMG is aimed at teens aged 13 years to 16 years the chances are that your first car will be second hand. Before you go: Work out what you need in a car and what you can afford your money is hard earned and you don t want to waste it. Remember, if you get your licence on an automatic, you have restrictions before you can drive a manual. DO YOUR RESEARCH check car values and reviews. Make sure you have worked out your budget, finance and how you will pay For the car and ongoing costs. Decide whether to buy privately, through a dealer or at an auction. Basically, buying privately or at auction means no warranty and at risk of purchasing vehicle that still has debt owing on it or rebirthed. Take someone with you and look at car during daylight. Warnings: Beware of cars that may have been stolen or re-birthed. Difficult to spot even if you have checked registration papers and identification plates on the car. Check that there is no outstanding finance on the vehicle (get a REVS check and certificate). Always check Chassis/VIN number Vehicle Identification Number and Engine numbers against registration details.

13 Checking the outside of the car: Alignment of panels doors, bonnet & boot. Check that they open and close properly. Panel damage check for dents, gaps and differences in paint. Tyres. Check that the windscreen, windows, indicator lights, mirrors and head lights are not cracked or damaged. Checking the inside of the car: Clean and tidy interior. Check audio system, heating, cooling, indicators working, glove box closes, seatbelts etc. Check for rust (look under carpet in boot, bubbling of paintwork on inside of doors etc). Check for spare tyre and tyre changing equipment. Check odometer reading and current registration (if it expires too soon you will be up for more money straight away). Checking the engine: Start the engine and check for any unusual sounds or emissions from the exhaust. Check radiator water should be clean. Check oil levels with dipstick. After turning off car check underneath for any leaks. Best advice have a mechanic check it over properly. Ready for a test drive: Ensure that the vehicle has a current CTP green slip and check insurance details in case of accident. Engine is smooth sounding i.e. not over revving.

14 Check engine not overheating. Transmission (auto or manual) should be smooth. Vehicle should not pull to one side ensure car drives straight. Ensure brakes work effectively. If this is THE car for you and you purchase it make sure you receive all sets of keys, owner s manual, service books, radio security number and any other information that should be with the vehicle. Now it is time to transfer the registration if it is through a dealer, this will be done for you. If purchased privately, you will need to have proof of purchase, two forms of ID and the money for transfer and stamp duty fees and do transfer within 14 days of date of purchase. Helpful websites that have more detailed checklists and information when buying your first car: Steps_to_buying_a_car.html For insurance and finance tips, check out the booklet In the Driver s Seat (publications & resources/brochures and booklets/insurance). Make sure you tick each box off as you go...

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