Buying a Car in New Zealand

Buying a car is a pretty big deal.  It is your primary source of transport and one of the highest priced items you will typically own after your home.  Buying a car while traveling abroad is a whole new experience though!  We did careful cost comparisons and estimates before deciding to buy a car – because that is what we do!  On the top of our considerations is the flexibility a car would offer because that is important to us when we travel.  I won’t even go into the fact that we seem to always accumulate more stuff when traveling and sorting it all out to get on a public transport is not always easy (or pretty!)

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On first arrival to New Zealand we rented a car for 50 days.  The cost of the rental was $2,700 NZD including adding a small insurance policy.  In the states we always decline additional coverage, but in New Zealand it is highy recommended because many of your credit cards will not cover New Zealand (and a few other countries) car rentals.

After a short time out of New Zealand, we would be returning for another 70 days and during the high season.  Looking up car rental prices for that time period we learned it would cost us about $3,000.  We decided to look at other options, even if they did put us outside our comfort zone.  Here were our pro’s and con’s of each scenario:

All prices are in New Zealand dollars –

Car Rental:  70 days at a cost of $2,600 with insurance another $400 to total $3,000.

Pros:  Our own transport; can get to places public transport might not go; holds all our stuff!

Cons: Initial cost; petrol costs (although it would be the same for buying a car).

rentalPhoto courtesy of RentalCar.co.nz

Bus Pass:  Two passes that allowed 60 hours each would cost $900.  60 hours would get us all over both the North and South Island, following the common routes between major tourist areas.

Pros:  Lower initial cost; no petrol costs; Get to meet other travelers and share stories (it might not sound like such a great pro, but it truly is!)

Cons: Somewhat limited access to areas we might want to go; Managing our bags and carry on bags; Finding hostels near by bus stops so we can walk to them, or having to pay for additional transport.

 intercityNZPhoto courtesy of Intercity.co.nz

Buying a car:  Cost can vary depending on the amount you will get back when you sell your car.  New Zealand has several weekly car fairs as well as on line backpacker sites where you can find low cost vehicles for sale.

Pros:  Our own transport; can get to places public transport might not go; holds all our stuff!

Cons: Initial cost; petrol costs (although it would be the same for renting a car).  Unsure of net cost based on selling price; having to maintain the car in the event of a breakdown; Possible that you loose entire investment if you get a complete wreck of a car.

We choose to buy a car that had a guaranteed buy back, even though the guarantee buy back price was 50% of the original cost of the car.  Alternatively, we could sell it outright ourselves at whatever price we can get.  Initial cost of the car is $2,490 and we added insurance for $200 more.  Our goal is to try to sell the car for a minimum of $2,000 so estimate a total net cost of $700.  If we only get the 50% buy back price, the total net cost would be $1,450 including the added insurance.  If we are able to sell it for our goal of $2,000 we are still about $200 less than a bus pass and if we only get the 50% buy back price we are about $550 higher than the bus pass.  The deciding factor was the flexibility our own car would offer.  Of course petrol is not included in the price here and that would add about $400 more to the car buying option.  Still a better bet for us personally.

OLYMPUS DIGITAL CAMERAOur Car!

THINGS TO CONSIDER WHEN PURCHASING A CAR IN NEW ZEALAND:

  • Warranty of Fitness (WOF) – Required to be up to date on all cars traveling the roads of New Zealand.  This is proof that the car is in good working order and by that it means the headlights, taillights, seat belts etc. are all in condition. It does not mean the car mechanics are all in perfect working order.  It simply means it is road worthy.  You can purchase a car without a WOF but we would not recommend it because YOU will be responsible for getting the car up to standards to make sure it is road legal.  It only costs about $40 – $50 to get a WOF that last 6 months for older cars (12 months for newer).  If your car fails, you need to fix the problem, then go back for another inspection.
  • Registration – Required to be up to date on all cars.  You can just extend a registration for the amount of time you need so if you will plan to own your car for 3 months, you can extend it for just 3 months.  Estimated costs are $40 per month for registration.  This will be checked at police road stops – we know from experience and were thankful we had an up to date registration!
  • Insurance – We were told that insurance is not required in New Zealand, but we would suggest the minimum coverage is purchased as it is pretty inexpensive and covers you if you damage another person or person’s property.  You can get more comprehensive coverage that would protect your car as well, but if you purchase an inexpensive care like we did, it might not be worth it.  The New Zealand Automotive Association quoted $108 to $311 per year based on coverage needs.  You can also purchase it monthly if you plan on owning your car for a short period.
  • Misc – The New Zealand AA also offers a membership like the US based AAA.  For $79 per year you can get roadside assistance as well as many other benefits including free road maps, discount on fuel purchases, and a place to sell your car for free.  The organization offers reciprocal services overseas so if your travel will continue, the protection goes with you.  If you are already a member of an Automobile Association in in your home country, check to see what reciprocal services they provide overseas.  You may already be covered!

Safe travels, how ever you do it!

 

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