Buy, rent or buy back?
Car rental in NZ is not too expensive, but the general rule is that if your trip is longer than about 8 weeks, it is worth buying instead. Remember that you probably need about a week at either end of your trip for buying and selling. You may also need to pay for insurance (not compulsory but a very good idea), roadside assistance (ditto), vehicle licensing, renewing the vehicle's warrant of fitness, and any necessary repairs. So it can be a gamble to buy.
New Zealand's population is only 4.7 million and the comings and goings of travellers do affect the market. Good vehicles are pricier and scarcer in October/November, and cheaper and more available in March/April, matching when most travellers arrive and leave. Many overseas travellers arrive at Auckland airport and depart from Christchurch in the south. This "direction of flow" means that you can sometimes make a profit if you buy in the buyer's market of Christchurch or Nelson and sell in Auckland.
Another option is to buy a car with a buy back guarantee. This basically means that you buy and own the car but when you have finished your trip you will get a guaranteed price back from the dealer that you bought it from. The percentages vary between companies but it usually is between 40 and 60 per cent depending on the length of time you have the car for. These can work particularly well for people who don't have enough time to sell or don't want to waste their time selling on their holiday.
Tips for renting
You can usually rent a car in New Zealand if:
- You're over 21 years old and the holder of a valid foreign licence (with either an English translation or an international drivers' licence) or, of course a current NZ licence. Foreign licence holders may drive for up to 12 months in NZ (after which they are required to take a local driving test).
- Some vehicle hire companies require the driver to be over the age of 25. Other companies have lower minimum age requirements, such as 18 and may require a surcharge.
- You understand and agree to uphold the road rules of New Zealand. Many companies will advise you take a short tourist Road Code test It's especially easy for visitors from the UK, Australia or South Africa to drive in New Zealand, as traffic drives on the left, but remember the local rules and that conditions are different.
Requirements for cars; many backpackers go for a van type vehicle such as the Toyota Previa or Hiace or a station wagon as they are planning to sleep in it to save money on accommodation. Before you do this, remember: New Zealand has an excellent network of inexpensive hostels and campsites, and also one major crime problem: theft from cars. A 'sedan' (saloon) with a secure boot which hides all your possessions will be much safer for your kit. Hostel owners don't generally like you sleeping in the car outside and expecting to use the hostel showers, etc., as this will overload the place.
Due to natural disaster many of the Central Christchurch motor vehicle dealers and backpacker dealers have left the city centre and are now selling vehicles in the Addington and Hornby areas, which is a short bus ride from backpackers around the city. However some companies are still operating within Christchurch.
The New Zealand vehicle market
Until the mid-1990s, hefty trade restrictions made it costly to import whole cars into New Zealand. Most car manufacturers therefore imported cars into the country as complete knock-down kits (like flat-pack furniture) and assembled them locally, with just enough New Zealand-made parts (paint, glass, upholstery, stereos) to keep the Government happy. Prices were also high: a new Toyota Corolla in the mid-1980s could set you back $38,000, equivalent to two years' income at the time. The 1983 Australia-New Zealand free-trade agreement meant some assembly plants closed in favour of importing pre-assembled cars from Australian assembly lines. In the 1990s, the trade restrictions were relaxed for other countries and all the remaining assembly plants closed.
In the late-1990s, a large number of used cars from Japan began to be imported and sold. At the beginning of 2008, New Zealand extended exhaust emission standards to all used vehicles entering New Zealand, which almost killed the used import market. However, the used import market has since recovered, but only for petrol-powered vehicles.
The three dominant car makes in the New Zealand market, as of 2017, are Toyota, Ford and Holden (General Motors).
Tips for buying
The best tip is to check the vehicle before you buy, for legal and mechanical problems. A website like carjam can help you checks the legal history of the vehicle including ownership history, mileage recorded at each warrant of fitness test (to help detect "wound-back" odometers), police interest and security interests registered against the car. The mechanical check can be carried out by the Automobile Association (AA) for a cheaper price if you are a member and is called a pre-purchase inspection. Most reputable mechanics will also perform such checks for you, and they normally cost between $100 and 160 depending on the company and the quality of the check; they should take around 2 hours.
Sellers fall into categories: private sellers and motor vehicle dealers. Anyone selling more than six cars in a 12-month period must be licenced as a motor vehicle dealer. Buying a car from a private seller is generally cheaper, but you don't have the same legal protections you get buying from a dealer.
Many of these tips are true regardless of where you are looking to buy a car, but there are a few concerns specific to cars in New Zealand:
- Because fixing cars is cheap in NZ and it receives lots of Japanese imports, many cars that would be completely uneconomic in Europe are still on the road, sometimes going round and round the country with a succession of backpacker owners. Ideally, you want a car that has just come into the backpacker circuit after a long time with one lady owner and full-service history. They do exist but they take some searching.
- Don't buy a car you have not inspected and test-driven yourself. If you are too scared to drive it, ask the seller to take you on a short ride and tell him what you would like him to do: brake sharp, accelerate fast, etc. New Zealand's unique state-organised Accident Compensation Corporation system means you are covered for personal injury in any vehicle (very handy for test drives) but that is all, so don't hit anything. Don't just drive "around the block"; drive the vehicle for at least 20 minutes through varying conditions.
- Don't buy a car if you do not have at least some basic knowledge of cars and know what to look for.
- Don't buy a car from a dealer unless he (or she) is specialized in providing for backpackers and has a good reputation (ask them for feedback from his customers and check the Internet).
- Don't buy a car that is leaking any fluid (black = engine oil/brake fluid, brown = engine oil/brake fluid, red = gearbox, green = radiator or other), has an oily looking engine head or rust on important parts of the chassis such as the door areas, or near the suspension mounts.
- Don't buy a car that has problems with the gearbox (automatic or manual) - this type of repair can be very expensive. Don't buy the argument that you will have to use overdrive or use neutral position when parking.
- Don't buy a car that doesn't stop (sharp!) when you want it to stop.
- New Zealand cars first registered on or after 1 January 2000 need a Warrant of Fitness (WoF) inspection at three years and then every year after that. Cars first registered on or before 31 December 1999 need a WoF inspection every six months. By law, a car cannot be sold with a WoF over 30 days old, unless you're buying from a private seller and you agree to buy it "as is, where is". A Wof can cost as little as $30 (although $40-50 is the usual price) and, like the MoT in Britain, is not a guarantee of mechanical condition. The only factors that are looked at on a Warrant of Fitness inspection are for the safety of the car, not the engine, gearbox or cooling system (apart from the fact they work and they aren't leaking oil/fluid), so if you are told "the car has been mechanically inspected, it has a new WoF" these are not the same.
- Check all the car lights (headlights, tail and stop lights, indicators, etc.) with the help of a friend.
- Check the tyres for adequate tread and signs of wear. You can quickly check the tyre tread depth with a New Zealand 20-cent coin; if you can see the bottom of the "20", the tread depth is less than 2 mm and the tyres need to be replaced (driving on tyres with less than 1.5 mm tread is both unsafe and illegal). A complete set of new tyres can easily cost $400-$500 including fitting and balancing.
- Check the windscreen (windshield), windows and wipers. Any chips or cracks in the driver's vision area (i.e 150 mm either side of the centre of the steering wheel) or any large chips or cracks elsewhere will cause the vehicle to fail its WoF. While small chips can be repaired for around $50 to $100, a major chip or crack will require the entire windscreen to be replaced, costing between $250 and $1,000.
- Avoid buying a car if the timing belt was replaced more than 10 years ago or 100,000 km (check the service record or the sticker in the engine bay or on the timing cover). The timing belt and associated components will need to be replaced, and this can cost you between $500 and $2,000. Not replacing the timing belt can result in it breaking and causing enough engine damage that your vehicle will be an economic write-off.
- Do buy a car that can easily and cheaply be fixed; this means a Japanese make and model (Toyota, Mazda, Nissan, Honda, etc.) or alternatively a Ford or Holden. There is an abundance of Japanese vehicles, Fords and Holdens in New Zealand and this means they are the cheapest cars to fix, and you can often find second-hand replacement parts.
- Due to NZ's small population, cars are much easier to buy and sell in the main cities. This means Auckland or Christchurch, the two gateways, and to a lesser extent Wellington, Nelson and Dunedin. Many travellers buy in Auckland and sell in Christchurch, so you could try arranging your travels the reverse direction. Remember that Auckland has five times as many people as Christchurch.
- Never buy or sell a vehicle over $10,000 by cash or cheque, and regardless of the vehicle price, if the other party insists on payment by cash or cheque, walk away from the sale. These are classic warning signs that the vehicle sale is being used for money laundering purposes.
You should do legal and mechanical checks before you buy. When it comes to selling, don't give away your flight date; if it is tomorrow they will smell the desperation and you'll be lucky to get $100 for the car. A good answer to 'when are you flying?' is 'when I sell the car'. Check for reviews of the place you want to buy or sell. Know the value of cars in New Zealand - do your research first - and don't be persuaded to go above what you know is the market price by the market proprietor - they may not be acting in your best interest.
Auckland has several car markets, the main one is on Sunday at Ellerslie Racecourse. Sellers $20, free to buyers. Turn up before 09:00 if you can, it will all be finished by 12:00. On site registration transfer and mechanical inspections. Christchurch's similar operation is at Christchurch's Addington Raceway on Sunday from 09:00.
The Backpackers Car Market is centrally located in Auckland and Christchurch and open daily 09:30–17:00. It's the only dedicated backpackers' or travellers' car market in Auckland.
Used vehicle sales websites
- Bedmobils - Budget backpacker campervans hire, sale and buybacks. Excellent value.
- TradeMe - This is a New Zealand auction site, like ebay. Its motor section covers all regions of NZ and you can arrange for pre-bidding inspection in all cases.
- Turners Car Auctions - Another NZ auction site, specializing in used vehicles. A tool is available to look up how much past vehicles have sold for.
- Transferring the car into your name: take proof of ID to a New Zealand Transport Agency (NZTA) agent (PostShop, AA, Vehicle Testing NZ, Vehicle Inspection NZ) and fill in a Notice of Acquisition of Motor Vehicle (MR13B). Alternatively, if you hold a New Zealand driver licence, you can transfer ownership online at the NZTA website (nzta.govt.nz) and pay by credit card. As of April 2014, the fee to transfer a vehicle was $9.00. When you sell, you need to fill in a Notice of Sale/Disposal of Motor Vehicle (MR13A) online or at an NZTA agent - this will limit your liability for any parking offences or traffic violations if the new owner doesn't transfer the car into their name. You will need a New Zealand address; it is ok to use your hostel or a service like Private Box.
- Vehicle license: also known as "rego". This can be bought in 3-, 6- or 12-month chunks, online or at an NZTA agent. You'll get a renewal notice from NZTA a few weeks before your licence is due to expire; have it beside you when you renew online or take this notice to an NZTA agent with payment. If you don't get a renewal notice, you'll need renew online with a New Zealand driving licence or to fill in a Application to license motor vehicle (MR1B) at a NZTA agent. A petrol car costs $75-80 for three months; a diesel car costs $110-115 for three months.
- Road user charges: unlike petrol, diesel is not taxed at the pump; instead, a diesel vehicle pays road user charges based on its weight, its number of axles, and how many kilometres it does. You can renew RUC online, or by filling in a Road user charges distance licence application (RUCLA) at an NZTA agent. The cost is around $53 for 1000 km for a standard car.
- Insurance: the Accident Compensation Corporation (ACC) gives everyone in New Zealand (including visitors) universal no-fault personal injury insurance; they take a percentage of the price of petrol and the vehicle licence cost to cover injuries caused by motor vehicles. However this will not cover damage to other vehicles and to property, so it is highly recommended that you get at least third party car insurance as well. AA Insurance, AMI, State and Tower are the main private car insurers. If you need short-term insurance then there are companies that specialise in this such as Traveller's Car Insurance.
- Roadside assistance: again not essential, but a good idea. AA and Vehicle Testing NZ offer roadside assistance, while AMI, State, and Tower offer roadside assistance as an extra on their car insurance.