Tips for buying a used car from a car dealer in 2025

What do you need to know before buying a used car from a dealership in 2025

Starting the search for a used car can feel both exciting and overwhelming. In New Zealand, thousands of buyers flock to dealerships each year, attracted by the promise of reliability, surety, and occasionally, that “just right” finance deal. But before sealing the deal, there’s a lot more to it than just kicking a few tyres and signing paperwork. Let’s look at how you can utilize options like a trade-in to ensure your next runabout or road trip machine is worth every dollar.

The Case for Buying from a Car Dealer

First off, why bother with a dealership when private sales can seem cheaper? For a start, dealerships are required by the Consumer Guarantees Act to stand by the vehicles they sell. That means you should expect an acceptable quality and recourse if things go wrong soon after purchase.

Some compelling facts:

• Over 80% of used cars in NZ are purchased with some form of warranty when bought from a dealer, compared to next-to-none in private sales.
• Dealership cars are often checked mechanically before being listed, with many offering a fresh Warrant of Fitness (WoF).
• Financing is much more accessible, and sometimes available with 0% deposit, making it easier for many to drive away same-day.

That said, the trade-off is often a higher initial price than private listings, so you want that added value.

Steps Before You Set Foot in the Yard

Preparation is key when managing money for a big purchase like a car, and buying smart can maximize your investment. Don’t just pop by a yard on impulse. Here’s how to give yourself the best shot at a fair deal:

1. Work out your budget. Decide how much you can actually spend, including potential repayments, insurance, and running costs.
2. Know your must-haves. Automatic or manual? Petrol or hybrid? Hatchback or SUV? New Zealand’s used market is diverse.
3. Research models and trouble spots. Some makes and models have recurring issues. A quick Google can save big headaches.
4. Grab a list of dealerships. Pick ones that are members of the Motor Trade Association (MTA) for a bit of extra buyer protection.

What to Check When You’re Onsite

Walking onto a car yard can be intimidating, especially if you’re not a petrolhead. But you don’t need to be a mechanic to spot red flags.

The Visual Check

• Look for mismatched paint, gaps between body panels, or signs of rust.
• Tyres should have at least 1.5mm tread across the width — grab a 20 cent coin and check the border against the rubber.
• Open and close all doors, bonnet, and boot. Sticky hinges or water ingress can signal prior damage.

Inside the Car

• Make sure all seatbelts retract and latch properly.
• Switch on every bit of electrics: air con, lights, stereo, windows, wipers.
• Smell for mustiness, which could indicate water leaks.

Paperwork Matters

Always ask to see the following:

The Test Drive: Not Just a Spin Around the Block

A good test drive is more than a five-minute lap with the radio on. Insist on taking the route that lets you get up to motorway speeds, and if possible, some bumpy or twisty roads too.

Pay attention to:

• Any knocking, rattling, or creaking sounds.
• Strange behavior when steering or braking.
• Smoke or odd smells from the exhaust.

If the salesperson is reluctant or tries to limit where you go on the test drive, consider it a warning.

Understanding Dealer Financing

Many car yards in New Zealand offer in-house finance, which can be handy if you need the car right away. Yet, interest rates vary hugely between providers – sometimes by as much as 10%. Never accept the first finance offer without getting quotes elsewhere.

A few points to consider:

• Look out for the annual percentage rate (APR), establishment fees, early repayment penalties.
• Check the structure: balloon or final payments can mean lower weekly repayments but hefty costs later on.
• Terms like “0% deposit” are enticing, but check your payments; sometimes it means higher weekly amounts.

If you aren’t sure, AJ Motors can give a benchmark on fair car loan rates.

Mechanical Warranties and Insurance

Most reputable dealers now offer mechanical breakdown insurance or warranties for extra peace of mind. These are sometimes included for 6 or 12 months, and can sometimes be extended with an extra payment.

Typical mechanical warranty inclusions:

• Engine and transmission repairs
• Electrical system faults
• Some wear-and-tear items (dependent on provider and policy)

Be aware of exclusions, which often include batteries, tyres, and routine servicing.

A standard 12-month warranty can add between $350-$900 to your purchase cost, but might save thousands if a covered fault pops up.

Getting the Best Deal: Negotiation Tips

Haggling isn’t as awkward as you might fear in the New Zealand car market. Dealers often expect it, though the margins on used cars aren’t as massive as some think.

Tips to keep handy:

• Research at least three examples of the model you want and have listings printed or saved to your phone.
• Don’t fixate on just the sticker price. Sometimes, you can wrangle extras: new tyres, a service, a full tank of fuel, or an upgraded warranty.
• If the car is just out of its manufacturer’s warranty period, aim for a deeper discount.

If you spot something minor during your inspection (worn tyres, chips in the windscreen), don’t be shy to ask for a price reduction or free repair.

When to Walk Away

No matter how perfect a car looks, there are times when it’s best to keep your wallet in your pocket.

Red flags that should make you reconsider:

• Unwillingness to provide required documents, CIN, or service history
• Delays or excuses when you request a full, independent inspection
• Signs the WoF is close to expiry or has gaps, which might hide costly repairs

A trustworthy dealer will always be happy for you to get an independent check — mobile mechanics and groups like the AA can often perform these for about $200.

When Shopping from Out of Town

Plenty of buyers now purchase from outside their home city, thanks to tools like virtual tours, online finance approval, and nationwide delivery (AJ Motors, for example, advertises this very service). But there are a few extra tips to keep safe:

• Request a full set of photos, including underbody, under the bonnet, and any cosmetic marks.
• Make sure you receive, read, and fully understand the CIN and finance paperwork before transferring any money.
• Use secure payment methods or the dealership’s finance department, not private bank accounts.

Making the Most of the Test Drive: A Quick Checklist

Here's a concise guide to run through when you're behind the wheel:

Extra Costs: Budget Beyond the Windshield Sticker

It’s tempting to focus just on the number in the window, but your total outlay often sits quite a bit higher after a few extras:

• Vehicle registration and licensing/removal of previous owner (estimate $200+)
• Insurance for your first year (anywhere from $500 for basic to $1300+ for comprehensive if under 25)
• Road user charges if it’s a diesel (currently $76 per 1000km), plus the diesel fuel saving to consider
• First service after purchase (often recommended, even if serviced before sale)

Why Service History Counts

One of the best predictors of whether a used car will be reliable? Its service record. Consistent oil changes and maintenance at recommended intervals are far more valuable than a low odo reading alone.

Here’s a general guide for what a “good” service history looks like:

Missing stamps don’t always spell disaster, but a car with a patchy history is a bigger gamble — and resale value drops too.

Wrapping It Up

A bit of ground work goes a long way when you’re buying a used car from a dealership. Prioritise transparency, don’t skip the inspection, and always get everything in writing. Once you drive away, you’ll want that peace of mind knowing you’ve done it right — and with these steps, you’re setting yourself up for a safer and smarter buy.

If in doubt, bring a car-savvy mate, or ask if you can get a mechanic’s second opinion. Good dealers like AJ Motors will welcome it. Happy hunting, and may your new (used) ride serve you well on every Kiwi road trip.