The best first car: A buyer’s guide for new drivers in Australia
Buying your first car is a major step towards independence.
However, the process can require quite a bit of paperwork and decision making.
Buying your first car is a major step towards independence.
However, the process can require quite a bit of paperwork and decision making.
This is particularly true if you want to buy a car that not only looks good, but meets your practical requirements, offers all important safety features and won’t create unnecessary financial pressure once the glow of owning your first car has worn off.
To make things a little easier for new drivers, we’ve put together a buyer’s guide for first time drivers in Australia.
This will first help you identify what to look out for when buying your first car, take you through the best cars for new drivers in each segment of the market and then take you through the steps to buying a car for the first time, from finance to insurance.
Not only does almost every manufacturer on the planet sell their vehicles in Australia, but Australians also have local builds competing for their attention.
And each of these makes and models comes with potential advantages and disadvantages.
Before we look at great cars for new buyers in each segment, it’s worth establishing a first car checklist for what young drivers should look out for in their first cars.
Here’s a look at the three best cars for first time drivers across typical new driver car segments.
These vehicles combine 5-star ANCAP ratings with compact size, reliability and fuel efficiency.
Small cars are the go-to market segment for most new drivers. There’s a good reason for this.
Not only are these small, cheap cars for first time drivers, but they’re also easy to park, relatively affordable to insure and are tailor-made for short city commutes.
The Volkswagen Up is one of the best first cars for new drivers in Australia, whether you’re purchasing new or shopping for a used car.
The Up! has everything you would want from good cheap cars for first time drivers.
Expect excellent fuel efficiency, class-leading safety features, and a variety of colour options and trim levels.
If you’re looking for a little more power and space than you can get from the micro car segment and want to explore the supermini option, you can’t go wrong with the Ford Fiesta*.
This car blends style with safety and fuel efficiency. It is also considered one of the best first cars for teenage guys in Australia.
*Sport models are equipped with engines that will violate engine power restrictions in some Australian states and territories.
The Yaris is the most compact car Toyota offers on the Australian market.
It comes standard with all the features that make this brand popular, including affordable cost of ownership, reliability and excellent safety features.
It’s a car a young driver will take several years to grow out of, which makes it one of the best cars for your first car if you’re buying new.
The following are the best used cars for new drivers, covering all the bases we identified in what you want, and need, from a first car by providing good fuel consumption, reliability and excellent safety features.
The Holden Spark is a compact Korean-built city car that has recently been discontinued in Australia.
This means that the second-hand market is the only place you’ll be able to get hold of this car.
Reasons why this is one of the best used cars for first time drivers include good fuel consumption, a 5-star ANCAP rating, air-conditioning and a 7″ infotainment system tailor-made for young drivers.
he Fiat 500 is arguably the best first car under $5000 in Australia.
It offers everything you’d want from good second-hand cars for first time drivers, including a 5-star ANCAP rating.
The Fiat 500’s super-efficient engine won International Engine of the Year in 2010.
It also happens to be compact, easy to drive and features distinctive, youthful styling based on a classic Fiat design.
The third generation Mazda 2 is one of best first cars under $10,000 in Australia.
In fact, low cost of ownership is this car’s most attractive feature.
It’s reliable and spares are readily available and affordable when it requires maintenance.
The Mazda 2’s fuel efficiency is also good at a touch over 6 litres per 100km, and it carries a 4-star ANCAP rating.
The good news is more cars carry 5-star ANCAP ratings than ever before, which means you aren’t forced to fork out for a premium badge in order to keep your young driver safe.
The following small and compact cars are ideal first cars for young drivers, with all variants carrying 5-star ANCAP ratings:
Our list of the top ten cars for first time drivers includes:
Car finance is affordable in Australia at current interest rates, which makes this a viable and popular option among first-time car buyers.
In order to enter a car finance agreement directly with a provider you’ll need to be:
If you meet these requirements you have a few different options for getting your car financed, as there are hundreds of car finance offers on the market.
Your options include:
If you’re a first-time car buyer, it’s likely you’ll be most tempted by the option that allows you to get the car you have your eye on at the most affordable instalment as quickly as possible.
However, before signing on the dotted line on a car finance agreement that looks attractive, there are some important key terms and concepts worth understanding.
Now that your first car finance options have been explained, there are a few final first car finance tips to be aware of before you sign on the dotted line.
If your income or credit rating prevents you from qualifying for car finance, don’t despair.
You still have the option of co-signing on a credit agreement with a family member who qualifies for finance.
Another popular option is to ask your parents to apply for car finance on your behalf, and to then refund them for instalments on your car once you have taken ownership of your car.
If you get a used car as a hand-me-down or only have enough cash to buy an older second-hand car, the debate over whether a first car should be new or used is pretty much settled there and then.
Drive the used car until other options become available.
However, if you’re given the option between a new and used vehicle consider the pros and cons of each option as they’re presented below.
|Purchase price||Higher first car price||Lower first car price|
|Maintenance cost||Negligible during warranty and service plan||Can be expensive and unpredictable|
|Warranty||Comes with factory warranty||Warranty must be purchased separately|
|Reliability||High degree of reliability, most issues covered by warranty||Risk of buying a ‘lemon’/unpredictable reliability|
|Resale value||Stiff depreciation during first three years of ownership||Retains value better over the short term|
|Safety||Retains value better over the short term||May be missing important safety updates|
|Fuel efficiency||Retains value better over the short term||May have older, less fuel-efficient engines|
|Finance||Preferential finance rates||Less favourable finance agreements|
|Insurance||Higher replacement cost means higher rates||Lower insurance rates due to lower replacement cost|
As you can see there are important pros and cons that apply to both options. Fortunately, a compromise exists, which is to shop for dealership demo models.
These vehicles are typically used for test-driving at dealerships and as courtesy cars and are sold as newer models become available while still on very low mileage.
These cars offer the best of both worlds, as they offer the safety features and technological enhancements of brand-new cars, while still being under warranty, but won’t cost as much or depreciate as quickly as new versions of the same model.
If you’d like more information on whether you should buy a new or used first car, we’ve covered the debate in more detail here.
Here are your first car insurance policy options, from cheapest to most expensive:
While comprehensive insurance cover is the most expensive option on this list, it is also the best first-time car insurance option and should be a priority consideration when calculating how much car you can afford.
Without comprehensive cover the consequences of even a minor car accident can be financially catastrophic.
However, comprehensive cover can be very pricey for young or inexperienced drivers, as they are considered high-risk demographics and lack established claims histories.
UbiCar uses the latest telematics technology to score your driving and calculates your insurance rates based on how safely you drive.
*Savings are factual and based on comparison between the customer’s current Comprehensive Car Insurance policy with UbiCar as of December 2018 and their policy with their previous insurer. Premiums and savings may differ depending on individual circumstance.
As a rule of thumb, there’s little sense in getting your own car as a learner driver.
You won’t be driving frequently or without supervision, so it makes more sense to bide your time in the family car during this period.
In addition, insurers like UbiCar won’t require learner drivers to get separate insurance cover if they are driving the family car.
This takes all the hassle out of insurance.
P plates are the natural step-off point for automotive independence.
However, even here it’s worth avoiding an impulsive buy and asking yourself if a new car is a need or a want.
If you’re a P plater, living at home and don’t require a car for regular use, it will still make more sense to drive the family car and have yourself listed on the family policy.
With that in mind you should get your first car when:
Whether buying new or used you’ll be required to register the car in your name, which will require:
If you are buying from a dealership, they will usually help you register your vehicle once you have provided them with the relevant proof of identity and address.
Other things you might need for your first car depend on whether you are buying it cash or having it financed.
If you are buying a used car for cash, you should get:
If you are buying a car under finance, there will be additional requirements to prove you can meet your monthly payment obligations.
So, if you are financing your first car you’ll need:
A car’s ‘make’ refers to its manufacturer, or the company that builds and distributes the vehicle. Examples of vehicle ‘makes’ would be Toyota, Ford or Holden.
Where you should buy your first car will depend on whether you buy a used or new vehicle.
The best place to buy your first car if buying new is directly from authorized manufacturer dealerships.
Used cars can be purchased either directly from the seller or from a used car dealership.
Whichever of these two options you choose, always ensure you have any used car you are considering buying checked out by an independent mechanic and preferably purchase a car that comes with an extended warranty.
The financial rules when it comes to buying your first car don’t differ much from the rules that apply to other car owners.
n Australia first car prices can be very reasonable, and you can get high quality used cars for between $4000 and $6000.
These include some of our recommended cheap first cars for new drivers such as the:
The date of first payment on a car that has been financed will depend on where you get your finance.
Some financing institutions will require you to make your first payment within a month of buying a car, while other providers offer a grace period of 30 days or more before your first car payment is debited, which means you can effectively ‘skip’ one or more car payments.
First time car buyers are technically subject to the same interest rates as other car buyers, as financing institutions do not factor driver experience into interest rates.
However, your credit profile may affect the interest rates you are offered by financiers, and younger drivers may not have the type of established credit profiles that attract preferential rates.
You can expect to pay interest rates of between 5% and 14% depending on a variety of factors, including:
According to research done in the United States, the average age of the vehicle on the roads is around 11.4 years, while most drivers hang onto a new car for around 6 years.
However, the averages hide a lot of variation within the car owner population, as many people will hang onto their cars for longer or shorter periods.
This reflects the fact that how long you keep your first car will depend on variables that will be unique to your situation, including:
This means it’s not practical to recommend keeping any vehicle for a specific number of years.
Instead it makes sense to replace a vehicle once the cost of maintenance and repairs push the cumulative monthly costs of ownership above what you would be paying for a comparable replacement car.
You may also want to replace your car once your requirements outgrow what your current vehicle can give you, for example if you have a family and require a bigger car.
The initial costs of purchasing your first car in Australia will vary slightly depending on whether you are buying a new or used vehicle, whether the vehicle will cross state borders during the transfer of ownership, and which state or territory you live in.
However, as a rule of thumb the following costs will apply to vehicle purchases:
Expert claims around the average depreciation rate for new cars in Australia vary, with depreciation rates between 14% and 19% quoted for the first year of ownership.
These averages have limited relevance as new car depreciation rates are dependent on the make and model of vehicle you are purchasing.
Cars that are in higher demand in the second-hand car market will depreciate more slowly than cars that attract less general interest in that market.
The extent to which you have customized a car, and how much value these customizations retain in the used car market also influences how much your car will depreciate by in the first year of ownership.
What mileage you should look for in a first car depends to a large extent on the manufacturer and model, how and where the car was driven and whether its maintenance was kept up to date.
A reliable car like a Toyota Camry that has been well driven and regularly serviced can provide several years of reliable use at a mileage of 120,000km.
The best way to determine whether a used car’s mileage could cause issues is to have it assessed by an independent mechanic to get an objective idea of what the costs of ownership are likely to be, given the car’s mileage.
Cost of ownership, reliability and safety are the primary considerations for first time car buyers.
In Australia several brands not only offer all three of these, but also manufacturer models with young and first-time buyers in mind.
Good first car brands include:
Any car with a 5-star ANCAP rating can be considered a safe first car to buy, although first time buyers should avoid high performance vehicles even if they carry 5-star ratings.
ANCAP tests most car models available in Australia and scores them across critical safety features.
Cars with 5-star ANCAP ratings perform close to optimally across all critical safety tests.
If you’re wondering what the best classic cars are for first time drivers, the answer is that none of these vehicles are suitable for a first-time driver.
These cars have several major issues which make them more suitable for serious hobbyists and collectors with more experience driving and maintaining vehicles.
These issues include:
4×4 vehicles are generally not suitable for first time car buyers, who are typically using their vehicles for short urban commutes.
A 4×4’s expensive purchase price, maintenance, insurance and fuel costs also disqualify it as a good first car.
In addition, specialized driving skills are required to drive these cars safely.
However, 4x4s are a necessity in some parts of rural Australia with dirt roads.
If you’re a new driver living in one of these areas, the Suzuki Jimny is a good option to look at.
This 4×4 is both compact and relatively affordable, and is renowned for its ability to handle rough roads and rugged terrain without costing you a fortune at the petrol pump.
The safest first car for a teenage will be one that has a 5-star ANCAP safety rating, as well as a smaller engine that discourages speeding and reckless acceleration.
Many manufacturers have released cars that meet these requirements and are specifically targeted at parents buying a first car for a teenager.
Good first cars for 17 year olds and 18 year olds include:
In Australia driving a sports or high-performance car as a first car is not recommended for the following reasons:
If you’re set on having a sports car as a first car, a Mazda MX5 equipped with one of the smaller engine options will give you the closest experience of a sports car as a first car.
If you assess a Range Rover using the key factors identified in what you want, and need, from a first car the answer would be that a Range Rover is not a good first car.
While safety features are excellent, the engines are powerful and thirsty, and these vehicles are expensive to insure.
Driving and handling a Range Rover well, typically also requires a lot of driving experience.
If you assess a Mitsubishi Lancer according to the factors identified in what you want, and need, from a first car the answer would be that Mitsubishi Lancers are reasonably good sedans for a first car.
While the safety features are satisfactory, and the car is solidly built and reliable, engines are not particularly fuel-efficient.
The BMW M3 is not a good first car according to the factors we identified in what you want, and need, from a first car.
Not only will this vehicle trigger high-performance vehicle restrictions for novice drivers in many states, but cost of ownership will push it beyond the reach of most first-time car buyers.
The Mercedes C Class is not a good first car, taking the factors we identified in what you want, and need, from a first car into account.
This is down to the fact that this is simply too much car for the first-time car buyer, with a powerful engine and a high cost of ownership in terms of vehicle cost, maintenance and insurance.
A Ford Mustang is a poor choice for a first car in Australia according to the factors we considered in what you want, and need, from a first car.
Not only does the Mustang have an overpowered engine for first time drivers, but this car also scored 3 stars in ANCAP testing, which suggests the safety features are not matched to the vehicle’s performance capabilities or price.
If you’re set on having a sports car as your first car, then models of the Mazda MX5 with smaller engines are appropriate first cars, according to the factors we considered in what you want, and need, from a first car.
This is due to this vehicle’s safety, impressive fuel efficiency, compact design and affordable cost of ownership.
Whether or not a BMW is a good first car will depend on the model and age of the vehicle in question.
With the possible exception of the 3 Series, most BMW models are not suitable for new drivers due to the higher power output of the engines, as well as cost of insurance and maintenance once out of warranty.
Below we list the pros and cons for the BMW brand in general, according to the factors considered in what you want, and need, from a first car.
Whether or not an Audi is a good first car will depend on the model and age of the car in question.
Entry level versions of models like the A1 are designed specifically with younger and first-time buyers in mind.
However, larger and sports Audis are more suited for mature and experienced drivers.
We consider the pros and cons of Audi as a first car below, according to the factors considered in what you want, and need, from a first car.
A BMW 3 series is a moderately good first car for a first-time buyer when considering the factors we identified in what you want, and need, from a first car.
While engine power can be a concern on performance models and this is not a cheap first car option, its safety and fuel efficiency mean that it is an option worth looking at for first time buyers with bigger budgets.
A Honda Civic is a good choice for a first car, and is one of the best first used cars to buy when considering the factors we identified in what you want, and need, from a first car.
While not the most exciting car on the market, its reliability, fuel-efficiency and low cost of ownership make it one of the best options on the market for new drivers.
The Toyota 86 is not a good option for a first car, based on the factors we considered in what you want, and need, from a first car.
The power of the engine, high cost of ownership and relatively poor efficiency mean this sportscar is best reserved for more experienced drivers with bigger budgets.
An Audi TT is not a good first car or suitable for inexperienced drivers according to the criteria we identified in what you want, and need, from a first car.
While there’s plenty to like in terms of the car’s appearance and specifications, its performance and cost both exceed the requirements of typical first-time car buyers.
Especially when bought used, Toyota Camrys are cheap, reliable first cars, making this one of the best options if you’re shopping for cool first cars under $10,000.
According to the guidelines set out in what you want, and need, from a first car, a Toyota Prius is a moderately good choice for a first car for novice drivers.
The vehicle is best suited to first time car buyers with a bigger budget who are in the market for a mid-sized sedan.
The Subaru BRZ is an alternative name for the Toyota 86, which we review as a first car above.
While the aesthetics and off-road capabilities of a Jeep may make cars by this manufacturer an attractive option for first time car buyers, our guidelines to what you want, and need, from a first carsuggest that it is not a good option for a first car.
The Mazda 6 is a good first car option for first time car buyers looking for a large family sedan, offering reasonably good fuel efficiency and excellent safety features.
However, it is an unsuitable option for younger first time car buyers according to the guidelines we set out in what you want, and need, from a first car.
With its attractive, modern design and low cost of ownership, the Ford Focus is a good choice for a first car according to our guide to what you want, and need, from a first car and is also one of the best second-hand cars for first time drivers.
However, young drivers should avoid the high-power sport versions of the car as these may trigger engine restrictions for novice drivers.
The BMW 5 Series is not suitable for first time drivers according to our guide to what you want, and need, from a first car.
While it’s safe and impressively light on fuel, it’s also a premium executive vehicle that offers more car than a first-time car buyer typically requires.
The BMW 3 series is moderately suitable for first time car buyers. We discuss the pros and cons of BMW 3 Series vehicles as first time cars above.
Safe and reasonably affordable to own and maintain, the Nissan Altima is a good option for first time car buyers – specifically those looking for larger family cars with bigger engines.
Whether or not a Mercedes is a good first car depends largely on the model you are considering and its age.
Older models with standard engines can be acceptable options for first time drivers. However, newer models are generally not ideal cars for first time buyers.
According to our guidelines to what you want, and need, from a first car the Hyundai Sonata is a moderately good option for a first car for first-time buyers specifically looking for mid-sized sedans.
A Chevrolet Camaro is not a good option for a first car according to the guidelines we identified in what you want, and need, from a first car.
As is the case with many other sports cars on the market, its high-performance engine, poor fuel efficiency and high cost of ownership mean this car is best suited to experienced drivers with bigger budgets.
BMW 3 series vehicles are moderately suitable cars for first time car buyers. We discuss the pros and cons of getting a BMW 3 series car above.
The Ford Falcon is a moderately good option for a first car according to our guidelines in what you want, and need, from a first car.
Manufactured in Australia, the Falcon offers low cost of ownership and a good safety rating. However, many first-time drivers will find it oversized and cumbersome for their needs.
Also known as the Honda Jazz, Honda Fit vehicles are good small cars for your first car.
Purpose-built for first time car owners, the Honda Jazz offers many of the features and qualities we considered essential in our discussion of what you want, and need, from a first car.
The Mazda RX8 is not a good first car for a first-time buyer, when considering the guidelines set out in what you want, and need, from a first car.
Expensive to own and maintain this car is also heavy on fuel and is likely to attract high insurance rates.
A Holden Commodore is not a good first car option according to the guidelines identified in what you want, and need, from a first car.
While it’s a local build that is relatively affordable to maintain and repair, older models feature excessively powerful engines that are heavy on fuel.
The Mitsubishi Colt is a poor first car option based on the requirements for first time buyers identified in what you want, and need, from a first car.
Most notably the car has a 3-star ANCAP rating which makes it significantly less safe than competing vehicles in its segment.