Hmm, to some extent I would have a different take on this.
1) Assuming he is an Australian citizen and in a CSP place at university and after graduation he earns more than 50k p.a. he will be paying back those loans anyway. HECS/HELP is one of the cheapest loans (if not the cheapest) you can get in Australia and it may or may not be worth it to pay it as soon as possible. It is indexed at CPI and is which looking at historical data is between 2-4% p.a. Although there are benefits to paying off in chunks. A car loan would certainly have a higher interest rate.
2) The fact that he saved the money, and lived on a smaller amount shows that he can save, and provides some hope for the future.
Personally I would be on the holding off on purchasing a car as long as possible bandwagon as well but, he may have some other use out of it and they do provide some flexibility. If he keeps the long time, depending on how much he actually spent it wouldn't be the best purchase, but it certainly could be worse.
I also personally hold the belief that if you are purchasing a car around the 20k or lower mark in Australia then it may actually be beneficial to purchase new rather than used if you are planning on keeping it a long time.
