There are a number of factors which must be considered when buying a used car. As the purchase is likely to be large in comparison to others made during day to day life, it’s worth stopping and considering each point in turn.
In addition to the information provided below, to make buying a used car easier, AANT has produced a used car buyers’ inspection checklist, which members can print out and use as a point of reference.
Buying checklist
How much should you spend?
One of the most frequently asked questions when buying a car new or used is how much to spend. Deciding on a maximum price before starting the buying process will help you stay on budget. It is important to remember that buying a car involves expenses such as transfer fee, stamp duty, insurance and registration. Be sure to allow for these additional cost in your budget.
If you are borrowing money it is best to arrange finance beforehand. The amount you can afford to borrow may determine your budget. Make sure to carefully check the interest rates and loan conditions, as they usually vary between financial institutions. Examine the loan repayments carefully - do they allow for changes in your income or interest rates?
To get an idea of the likely price range of cars that you're interested in our Technical Advisory Service can provide you with pricing information. We use Glass's Guide, a comprehensive database that includes information on vehicle prices and specification data, residual value information and market intelligence. This is the industry standard and only available to subscribers so you'll have the same information as the professionals. To obtain this information and speak to one of our Technical Advisors call 1300 661 466.
If you want to get an online indication of the likely price range of cars that you're interested in, try an online database such as Redbook. click here for access to the Redbook site.
Choosing the right car
Ask yourself what kind of driving you will be doing in the vehicle and whether this may change in the future.
Questions like how many people will the vehicle usually carry and will it be required to tow a caravan or trailer will help determine the type of vehicle and engine size.
For example if you plan to tow, a six cylinder engine would be best suited. However, if your driving will be done mainly in the metropolitan area then a four cylinder model may be best.
Think about how much you can afford to spend each week to run the car. The more cylinders, the higher the registration and usually, the higher the fuel consumption.
Also consider that it may be harder to obtain parts for a less popular model of car.
Where to buy from?
There are three different options when choosing where to buy your used car from. You can buy privately from the current owner, through a vehicle dealer or through an auction.
Buying privately or through an auction may provide you with greater bargaining power but does not allow you to trade in your old vehicle. If you purchase from a dealer, a warranty may apply, when buying privately or at auction you’ll receive no warranty.
What to look for
- Take your time when looking at cars.
- Never inspect a car at night or in the rain as paint and body faults may be difficult to detect.
- Minor rust spots can quickly become serious.
- Ask to see the service record to ensure the vehicle has been regularly maintained.
- Unevenly worn tyres can indicate faulty brakes, suspension or steering.
- Abnormal free movement when the steering is rocked from side to side indicates wear in the steering components.
Road testing a car
When you have found a car you like, you should test drive it to check its condition. You should ensure that it starts easily, has no excessive engine noise and doesn’t blow smoke from the exhaust. However, only an experienced mechanic can tell you whether the engine is in good condition.
While driving it listen for body squeaks and changes in engine noise. Check for oil and petrol smells, leaks and overheating. Whining noises from the gearbox or differential could mean expensive repairs. Loud thumps resounding through the car on rough roads could indicate worn suspension components.
Check that all instruments and controls on the interior of the car are working. Make sure that the heater blows hot air and if air-conditioned, ensure it blows cold air.
While certain things can be picked up during a simple road test, there is much that can't. This is why it’s always best to have the vehicle checked by an independent expert. AANT offers a number of different vehicle inspections.
Used Car Safety Ratings
Buying a second-hand car doesn’t mean you should be in the dark when it comes to safety ratings. The 2011 Used Car Safety Ratings brochure uses the most recent crash data from over three million police-reported crashes in Australia and New Zealand to calculate which used cars are the safest. Download a copy of the brochure at the How Safe is Your Car website.
Register of Encumbered Vehicles
If you buy a car listed as stolen, written off or with a loan attached, it can be repossessed and you will lose your money. A new Personal Property Securities Register will come into effect in February 2012 and combines Commonwealth, state and territory registers – including the Register of Encumbered Vehicles – into one national system.
Provided you have the car’s rego, VIN and engine number, you can search online for any Australian vehicle to check it’s legally allowed to be sold. To make an enquiry call 1800 424 988 or visit the REVS website at http://www.revs.nsw.gov.au/
The Register isn't able to give any guarantee regarding its accuracy on stolen vehicles as a car may be stolen and sold before its theft is reported to the police.
If you are buying from a licensed motor vehicle dealer, they must guarantee that there is no finance owing on the vehicle. In this situation you do not have to ring the Vehicle Securities Register, unless to satisfy yourself about theft or write off.
Warranties
A vehicle purchased from a dealer will be covered by a 3 month / 5,000 kms statutory warranty if the car is less than 10 years old and has travelled less than 160,000 kms. A motorcycle which is less than 5 years old and travelled less than 30,000 kms at the time of sale will be covered by a 3 month / 5000 kms statutory warranty.
The dealer must comply with the warranty unless you sign a specific form, called a Form 12), giving away your rights. That means you sign away your rights if the vehicle is found to be faulty. Think carefully before signing this form, even if the dealer offers you a better price to do so, as it may turn out to cost you a lot more money in the long run. You can choose not to have a warranty in order to negotiate a better price however, a dealer is not permitted to make it a condition of sale.
A vehicle is required to be in a roadworthy condition, if the car is registered when sold.
Holding Deposit
There is NO cooling off period in the NT.
Don’t sign anything until you are absolutely sure that you want to buy the vehicle. If you are just looking or thinking about buying a vehicle there is no paperwork involved at all. If you are asked to sign something, it will most probably be a Form 10 contract for the sale of a second-hand vehicle and this is a legally binding contract. You will be expected to purchase the vehicle or if you decide to withdraw you can lose your deposit or any trade-in as long as this does not exceed 10% of the purchase price of the vehicle.
Transfer of registration
A licensed motor vehicle dealer may offer to process the transfer of registration for you, but in the case of a private sale, it is the buyer’s responsibility to transfer the registration of a second hand vehicle within 14 days of purchase. When applying for this, a transfer fee is payable along with the stamp duty.