Guide to best buys

Buying and running a car can put a big strain on the budget so Money has teamed with Wheels to find the best value in three categories: young couples/ singles, family and premium

Although a car is usually the second most expensive purchase we ever make, it’s often one that’s approached on anything but an objective basis. Car companies are past masters at getting us to spend with hearts rather than heads, so Money has partnered with the experts at Wheels magazine to focus on car buying with a wholly objective financial perspective.

While sorting the diamonds from the duds is a Wheels cornerstone, sifting through the new car market to separate the value picks from the money pits is the work of the annual Gold Star Cars awards.

The devil, as we’re reminded each year, is the insidious disease that is depreciation, which makes up the biggest chunk of the cost of owning a new car in the first few years. All cars lose value the moment they’re driven from the showroom, and quickly thereafter. A good one will lose only about 30% off its new price in three years, while a poor one will retain only 30%.

Yet a new car doesn’t stop at depreciation in its quest to empty your wallet. There are fuel, insurance, servicing and things that cunningly fail just outside the factory warranty.

A turbo-diesel will cost more but typically use less fuel than an equivalent petrol engine, but which one is less costly to run might depend on the day of the week, with our research indicating that while diesel prices are reasonably stable, unleaded prices can be higher or lower than them depending on the price cycle.

With an emissions cloud hanging over diesels, then there’s the question mark over which will be worth more at resale time. And can hybrids or electric cars justify their typically higher price tags in energy savings?

Insurance costs tend to increase with car size, price and performance; however, there are certainly examples of equivalent models with wildly different premiums.

Call us cynical but six-month service intervals are surely a means to rake in dollars, rather than a genuine technical requirement. Or is it that the unique conditions in Australia call for a service twice as often as is required for the same model overseas? Hmm … thankfully most cars work on a schedule of a service once a year.

The advent of the five- and seven-year warranty has given brands with traditional three-year, 100,000km warranties something to think about.

Those rare models that can combine decent depreciation, moderate fuel and insurance bills, a long service interval and/or a more generous warranty than their classmates rise as Gold Star Cars.

We applied a further filtering process to come up with the Gold Star Cars to match three profiles for Money.