Used car buying guide

Buying a secondhand car can be a minefield. Read our tips and learn how to avoid disaster.
 
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01 .Introduction

Car on country road

If you're in the market for a used car, there are some simple inspections and investigative work you can do yourself to ensure you don't end up with a lemon.

Before you go shopping for a used car, do some homework. Once you've decided what type and size you want, decide how much you can afford to spend. There's more than just the purchase price to think of — the pre-purchase inspection by your motoring organisation, stamp duty, insurance and the fee to transfer registration.

Do some research into makes and models, considering:

  • Safety Search our database with the used car safety rating based on real-life accidents.
  • Security How easy is it to steal (from) the car?
  • Insurance costs This varies from model to model. Once you've narrowed down your choice to two or three models, get some quotes for each.
  • Environment Check the car's fuel consumption and emissions rating.
  • Decide where and how you want to buy the car (see Dealer, auction or private sale?).
  • Check the legal situation in your state or territory, including how to make sure there's no money owing on the car (see Rights and responsibilities).  

Hitting the road

You know what you want and you're ready to look at some cars. Here's what to do:

  • Inspect the car using the checklist in What to look for, paying particular attention to the problem areas identified in CHOICE's car reliability survey.
  • If you're definitely interested in a car and don't have the expertise yourself, you can arrange for an independent expert inspection through your state's motoring organisation (see Rights and responsibilities for contact numbers). This isn't usually possible if you buy at an auction.
  • If you buy the car from a dealer, they're legally obliged to guarantee that the car's debt-free. For private sales, check whether there's any money owing on it by calling the vehicles title register or REVS of the state or territory it's registered in (see Rights and responsibilities for contact numbers). Have the registration number, vehicle identification number (VIN) and engine number ready (see What to look for on where to find these). This service is free, but doesn't give you a guarantee that the car can't be repossessed. For peace of mind (and a fee), you can ask for a certificate that offers legal protection.
  • Don't sign anything until you're completely happy with the car and the amount you have to pay. Don't let the vendor pressure you into buying if you're not ready.
  • Once you've bought the car, arrange insurance before you drive it anywhere.
  • Transfer the registration to your name. You usually have to do this within a few days of buying the car.
 
 

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There's a lot you can check yourself when inspecting a car (make sure light conditions are good so you don't miss anything). Motorists organisations (for example, the NRMA) recommend the following:

Paperwork

  • In a private sale, make sure the vendor is the owner. Ask to see their driver's licence and compare the details with those on the registration papers.
  • Also for private sales, check whether there's any money owing on the car by calling the vehicle title registry - see Rights and responsibilities for contact details.
  • Look at the car's compliance plate, which is usually found on the firewall between the engine area and the inside of the car.
  • Match the vehicle identification number (VIN) and date of manufacture with those on the registration papers. Also check the engine number (which is marked on the engine itself) and the number plates against the registration papers. If any of the information doesn't match, ask for an explanation. It could mean the car's been stolen or (in case of the engine number) that the engine's been replaced without notifying the registration authority.
  • In some states (see Rights and responsibilities), the seller must provide a certificate of roadworthiness.

Outside

  • Check the paintwork for bubbles and colour differences, which could indicate rust or an accident. Use a fridge magnet to check suspicious areas for body filler — the magnet won't stick to filler.
  • Panels that don't seem to fit properly, or doors, the boot lid and windows that don't open and close properly can indicate the car's been in an accident.
  • Check the tyres, including the spare, for sufficient tread (at least 3-4 mm) and uneven wear (which can show a problem with the steering or suspension).
  • Check under the car for oil leaks.

Under the bonnet

  • Look at the dipstick. Grey or milky oil may indicate serious engine problems.
  • Take off the radiator cap and check the coolant. It should be brightly coloured and clean. Oil in the coolant may indicate serious engine problems.
  • Check the radiator cooling fins and the battery and its mounting platform for corrosion and other damage.

Inside

  • Inspect the upholstery, trim and carpets for wear.
  • Make sure the seatbelts are in good condition.
  • Check whether the seats are still comfortable enough.
  • Make sure all lights, equipment and accessories (such as air conditioning, windscreen wipers, power windows, wing mirrors, spare tyre, central locking and car radio) are there and work properly.
  • Look for signs of rust under the carpet (if possible) and mats (don't forget the boot).
  • Check that the jack and toolkit are in place and in good condition.
  • Ask for the car radio's security PIN, if applicable.

Start the engine

  • With the bonnet open, start the engine and let it idle.
  • Watch for exhaust fumes when starting the engine and during idling. For example, blue smoke may be caused by oil being burnt, which could indicate a serious problem.
  • Excessive noise from the exhaust can indicate rust and the need for a new muffler.
  • Listen for any irregular running noises, rattling or knocking in the engine.
  • Look for any signs of leaks.
  • Open the oil filler cap: fumes may indicate engine problems.

On the road

  • Take the car for a test drive, preferably on quiet roads where you can concentrate on the car rather than on heavy traffic. Make sure the car's adequately insured before you do, and take your time: one spin around the block is hardly enough to get a good picture of the car.
  • Make sure the engine runs smoothly in all situations -- when cruising, accelerating and decelerating both on flat roads and uphill.
  • All gears should change smoothly up and down.
  • Watch the dashboard for any warning lights, and keep an eye on the temperature gauge.
  • Listen for rattling or any other body noises -- driving over speed humps is a good check for this.
  • Watch the exhaust for smoke -- accelerating uphill is a good check for this.
  • The steering wheel shouldn't have more than 5cm of play.
  • On a straight road, ease your grip on the steering wheel and see if the car pulls to one side, which can indicate worn suspension or misaligned steering.
  • Also on a straight road and after checking for traffic behind you, try the brakes several times. The car shouldn't pull to one side, and the brake pedal should feel firm.

Dealers

Buying from a dealer is usually more expensive than buying privately. However, there are advantages:

  • In some states and under certain conditions, they must provide warranties (see Rights and responsibilities).
  • They must guarantee there's no money owing on the car.
  • You can often trade in your old car.  

Auctions

While you might be able to pick up a bargain at an auction, you really need to know about cars and what they're worth. You usually can't arrange for an inspection or even a test drive. So you'll be relying on visual checks. Types of auction vary from state to state — check with the auction house regarding warranty and money owing.

Private sales

Buying a car privately is usually cheaper than buying from a dealer. However, you have to rely a lot more on your own judgment as you won't get any protection, such as a statutory warranty. You can have it inspected by your state's motoring organisation, though. And you can check whether there's any money owing on the car by calling the vehicle title registry or REVS in the state the car's registered in - see Rights and responsibilities for contact details.

Markets

Car markets bring private sellers and buyers together in one place, so from a legal point of view they're the same as buying privately. However, they allow you to look at a number of different cars without having to drive all over town. You probably won't be able to have the car inspected on the same day, but you can usually go for a test drive.

Each state and territory has different regulations for the sale of used cars. For detailed information, call your fair trading or consumers affairs department on the number supplied.

Licensed dealers usually have to display a form on the car's dashboard or windscreen that provides some basic information such as the year of manufacture, odometer reading and warranty details. Dealers also have to guarantee there's no money owing on the car.

In most states and territories, they also have to provide a statutory warranty on certain used cars. However, this often excludes parts such as the radio, air conditioning or battery — make sure you clearly understand what's covered and what isn't.

Title register and debt (Australia-wide): PPSR at https://transact.ppsr.gov.au/ppsr/Home or phone 1300 007 777 (1300 00PPSR), or write to the ITSA National Service Centre, PO Box 1944, Adelaide SA 5001.

ACT

When you buy from a dealer, a car that's not more than 10 years old and hasn't travelled more than 160,000 km carries a three-month/5000 km statutory warranty.

When buying from a dealer, you're entitled to a cooling-off period of three days after you've signed the purchase agreement. If you want to cancel the agreement within the cooling-off period, you need to do so in writing, and the dealer can charge you $100 or 1% of the purchase price, whichever is greater.

Motoring organisation: NRMA, 13 11 22
Department of Fair Trading: (02) 6207 0400

Northern Territory

When you buy from a dealer, a car that's less than 10 years old and has travelled less than 160,000 km carries a three-month/5000 km statutory warranty.

Motoring organisation: AANT, (08) 8981 3837
Office of Consumer and Business Affairs: (08) 8999 1999

NSW

When you buy from a dealer, a car that's not more than 10 years old and hasn't travelled more than 160,000 km carries a three-month/5000 km statutory warranty. This doesn't apply to commercial vehicles.

There's a one-day cooling-off period once you've signed the purchase agreement, but only if you arrange credit with the dealer as well. If you withdraw from the deal within the cooling off period, the dealer can charge $250 or 2% of the car's value, whichever is less.

Motoring organisation: NRMA, 13 11 22
Department of Fair Trading: 13 32 20

Queensland

If the car has travelled less than 160,000 km and is less than 10 years old, car dealers in Queensland have to provide a 3-month, 5000 km statutory warranty. If the car has travelled more than 160,000 km or is more than 10 years old, there's a 1-month, 1000 km statutory waranty.
There's a one day cooling-off period once you've signed the purchase agreement. If you want to cancel the contract, you have to do so in writing and pay the dealer $100.

Both dealers and private sellers have to provide the buyer with a safety certificate.

Motoring organisation: RACQ, 13 19 05
Office of Consumer Affairs: 13 13 04

South Australia

When you buy from a dealer, a car that costs more than $6000 carries a three-month/5000 km statutory warranty. If it costs between $3001 and $6000, the warranty is two months/3000 km. Cars that cost less than $3000, are older than 15 years or have travelled more than 200,000 km don't have to carry a statutory warranty.

There's no cooling-off period once you've signed the purchase agreement.

Motoring organisation: RAA, (08) 8202 4600 (general); (08) 8202 4688 (inspection bookings)
Office of Consumer and Business Affairs: phone (08) 8204 9777

Tasmania

When you buy from a dealer, a car that's less than seven years old and has travelled less than 120,000 km carries a three-month/3000 km statutory warranty. This doesn't apply to commercial and four-wheel-drive vehicles.

There's no cooling-off period once you've signed the purchase agreement.

Title register and debt check: Vehicles Securities Register, 1300 851 225
Motoring organisation: RACT, 13 27 22 (general); (03) 6232 6300 (inspection bookings if in Hobart; different numbers elsewhere)
Office of Consumer Affairs and Fair Trading: 1300 654 499

Victoria

When you buy from a dealer, a car that's less than 10 years old and has travelled less than 160,000 km carries a three-month/5000 km statutory warranty.

When buying from a dealer, you're entitled to a cooling-off period of three working days after you've signed the purchase agreement.

Both dealers and private sellers have to provide the buyer with a certificate of roadworthiness.

Motoring organisation: RACV, 13 72 28
Consumer Affairs: 1300 558 181

Western Australia

When you buy from a dealer, a car that costs $4000 or more, is less than 10 years old, and has travelled less than 150,000 km, comes with a three-months, 5000 km statutory warranty. If it costs $4000 or more, is between 10 and 12 years old, and has travelled between 150,000 and 180,000 km, it has a one-month, 1500 km statutory warranty.

There's no cooling-off period once you've signed the purchase agreement.

Motoring organisation: RAC of WA, 13 17 03
Consumer and Employment Protection: 1300 304 054

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