Advice request: Buying a car

Maelin

So I'm looking at buying a car. At the moment I am using my parents' old car, however when I move out of home I will not be able to take it with me, and it also lacks some of the features I would like (cruise control in particular).

I'm looking at buying a small car, probably a hatchback. At the moment I have saved around AU$12,000. My parents are willing to lend me some amount, probably up to $5000, and I work for a bank which can give me a loan at a very favourable staff rate. I earn a bit over $325 per week at the moment and I have few living expenses beyond luxuries, that income is bolstered semifrequently when I can work extra shifts. At the beginning of 2013 I will be seeking a full time job as a high school teacher.

Looking at a few car websites (in particular carsales.com.au) it appears I can buy a fairly good second hand car for around $15,000, or a brand new car that seems quite good for around $24,000. This is a very rough guide to local prices.

I am aware that my decision process in this judgement is very fallible because I don't know much about buying cars, e.g. the potential pitfalls of a second hand one, and any other things I need to take into account.

Being as this is by far the most money I will ever have spent on a single thing and it is likely to last me for most of a decade at least, I am strongly motivated to make this decision rationally.

Does anybody have any advice they can give on how I can decide how much money to spend, or things I should consider when comparing potential cars?

Being as this is by far the most money I will ever have spent on a single thing and it is likely to last me for most of a decade at least, I am strongly motivated to make this decision rationally.

Does anybody have any advice they can give on how I can decide how much money to spend, or things I should consider when comparing potential cars?

Could you explain and/or write up this method? Please?

In general the biggest issue is avoiding the biggest depreciation hit which is the first 2 years. Cars generally have another drop off in value a few years later when they aren't perceived as "new" anymore. This varies from model to model as the introduction of a new revision affects it, along with popularity and other factors. So you look at the depreciation rate of the cars you're interested in and choose the spots that minimize your expected cost. When I purchase I look at the kelly blue book values over time to see how they drop.