Our son is in Wellington and we fly out of Wellington, so we're coming back to the north Island whether we have the car or not. Our son could sell it for us when we leave. I was told (haven't actually looked into it myself) by the father of our son's girl friend that insurance would run around NZ$300/yr. Sounds low to me.
Also wondering if the owner is having trouble selling it due to it being in Hawkes Bay and if it would be easier to sell in Wellington]
The price delta to add a vehicle to the fare across Cook Strait is about $150 per round trip, assuming two adults are travelling.
Flying between the two islands is actually fairly reasonable if you book well in advance. Major rental companies actually forbid using the ferry for their vehicles. You rent "one" car but leave the car at the ferry terminal and pick up a different car at the other ferry terminal. Kiwis have most of such stuff well sorted and generally very pragmatically.
Other big risks of buying are roadworthiness issues needed to get the car licensed and repair issues. NZ has pretty stiff roadworthiness requirements similar to UK MOT certificates but I see the WOT is good to April next year. Just remember you'll need to ensure that WOT can be renewed without much expense if you are selling close to the expiry date. Rentals come with de facto roadside assistance. If the car breaks down you get another one.
I'm sure you've priced rentacars. I'm getting a corolla or equivalent (not our corolla anyway) for 16 days, inter island for nz$1,200.00 at the height of summer January 2015. The economics look rational in an Alfa sort of way. Hawke's Bay is kind of the Napa valley of NZ so rust free cars are no surprise there. Just by the by the drive from Turangi to Napier is quite the drive, especially the last 45 minutes or so. You cannot make up any time lost. The first part of the drive back up to Taupo is alongside the lake more or less. Then you get up onto a high plateau east of taupo. The last section descends rapidly through volcanic canyons to the sea level plain that is Hawke's Bay. You are then no closer to Wellington than you were 2 hours ago.
While I concur NZ driving is more enjoyable with a good car it is a sad truth that an out of the box rent a Hyundai will blow the doors off an old Sud or 33.
True but driving is a big part of a holiday in the South Island. It is a long drive from some stops with very similar scenary.Could be fun, but is the riskier option. I guess, unless you get to drive a pretty cool car, I kinda don't see the point. I know Richard wants to drive an Alfa, I did as well, and got to (a 2002 V-6 Spider, thanks AlexG), but renting is much more worry free for actually seeing the country.