You’ve likely heard driveaway no more to pay at your local car dealership, but what does it mean?
Drive-away pay no more is a popular pricing strategy used by car dealerships. While it often seems like a good deal, there can be more than meets the eye. When dealing with drive-away pricing, new car buyers should be wary if they’re getting the right end of the bargain. In some situations, car dealers can offer an attractive price by including or excluding on-road costs in the final price tag.
If you find any excluded on-road costs, be sure to account for relevant on-road costs and factor them into your budget, as they can quickly add up and could even put you over the budget you had specified to yourself.
What Are On-Road Costs?
On-road costs are the additional expenses you must pay before you take your new car out of the showroom and legally drive it on the road. On-road costs can vary depending on what is applicable, but they can include:
- Registration
- Stamp Duty
- New Plate Fees
- Compulsory Third-Party Insurance
- Delivery Charges
- Luxury Car Tax
What is Stamp Duty?
You must pay stamp duty on any car you purchase. Whether it’s a brand-new vehicle from the dealership or you buy a used car from an online marketplace, stamp duty is applicable.
Although the technicalities vary between states and territories in Australia, stamp duty can add thousands of dollars to your final purchase price. Think of stamp duty as a fee based on the overall value of your vehicle. For a new vehicle, the dutiable value is the listed price at the dealership, whereas it would rely on the market value of a used car. Each $100 of a vehicle’s dutiable value informs final stamp duty, which includes any additional accessories fitted to the vehicle before purchase.
Essentially, the more expensive your car is, the more you’ll pay for stamp duty. Drive-away pricing often includes stamp duty in its final price, although it’s less common to see dealerships cover this expense for luxury vehicles with higher price tags.
Compulsory Third-Party Insurance & Registration
Drive-away pricing often covers the cost of registering your car and compulsory third-party insurance, which covers drivers for expenses and claims in the event of injury or death in which they are at fault in a traffic accident. As this is a compulsory expense, having it bundled with your drive-away pricing is a win in your book, although it’s crucial to consider certain details before you proceed.
Firstly, compulsory third-party insurance only covers the cost of basic road cover, which excludes asset or property-related damage, or fire and theft. So if you want more coverage, you’ll have to pay for it yourself. Finally, you should also look at the length of registration on your drive-away contract. Although most dealerships will offer 12 months of registration, less kind dealers will only include 6 months, making it not as good of a bargain as you may have hoped.
What Are Dealer Delivery Charges?
Dealer delivery and associated charges can be quite a grey area when purchasing a new car. These charges consist of any work done by the dealership to prepare a vehicle for its new owner. These charges could consist of transit costs, cleaning, completing paperwork, final mechanical inspections, and applying number plates.
What makes dealer delivery charges such a point of contention when buying a new vehicle is that it can serve as the bulk of the dealer’s profit margin. As such, these charges can be inflated and should be carefully reviewed so you understand what exactly you’re getting for your money. However, this also means you have the potential to negotiate these charges down.
Is Drive-Away Pricing Worth It?
Reading the fine print and double-checking details has never been more crucial when dealing with cars that have a drive-away pricing sticker. For car dealerships with outdated stock, they’ll likely use drive-away pricing deals to make older models seem more appealing. In these situations, be sure to consider the benefits of a newer car compared to what you would save with the older model.
At the end of the day, the value of drive-away pricing depends on what on-road costs are included and how it affects your overall budget. If you read all of the fine print and understand what you’re getting for your money, you’re good to go!
If you’ve driven a car off the lot that you are keen to cash in on, Cars Brisbane might be perfect for you. Our service area includes Brisbane and North Queensland, where we buy cars of many makes and models, even if they’re close to brand new! Contact us for more information today.
