Buying and running a car

Cars make getting around a lot more convenient – but it comes at a price! Two key decisions about buying a car come down to how to buy, and how much it’s going to cost.

Ways to buy a car

There are three main ways you can buy a car.

1. Buying from a car dealership

Buying through a car dealership gives you consumer rights under Australian law. This applies to both new and used cars.

• New cars come with a full manufacturer's warranty. If there's a mechanical problem and you're still in the warranty period, the dealer must fix it at no cost.
• The warranty on a used car from a car dealership varies from car to car. See the ACCC website for information on warranties.

Buying a car through a licensed dealer means you have rights which are easier to enforce. As at 30 June 2025, there are over 10,000 licensed car dealers in Australia. Licensed dealers have to display their licence number, and you can check this number on your state or territory consumer protection website 

2. Buying from a private seller

Buying a car from a private seller can sometimes be cheaper than a dealership, but you do not have the same consumer protections as you do purchasing from a dealer. For example, there’s no warranty and no cooling off period for private sales. Before you buy:

• Check the car is registered by doing a free vehicle registration search by the state or territory-based government department.
• Get the car’s vehicle identification number (VIN) or chassis number. This is like a serial number so, unlike rego, it can’t be changed. Then search the Personal Property Securities Register (PPSR) to check:

• • there are no debts owing on the car
  • it has not been reported stolen or written off

For a $2 fee, the PPSR will email you a report on the car.

3. Buying at auction

Buying a car at an auction can be cheaper, but you'll get no warranty and no test drive beforehand.

As with private sales, use the VIN to search the Personal Property Securities Register (PPSR).  Read all paperwork before you bid. Once you make a successful bid, you cannot cancel the sale. 

Buying a used car - checklist

If you are looking to buy a second-hand car, think about getting a qualified mechanic to do a vehicle inspection. If you don’t have a regular mechanic, or a recommendation from family or friends, a good starting point to find one is your state or territory motor club. You can find the motor club contact details here. 

When you’re looking at a used car, use this simple checklist as a starting point:

check_box Look for signs of rust or damage.

check_box Check that all lights, indicators and windows work.

check_box Make sure the tyres have enough tread.

check_box Look for leaks under the car.

check_box Check the service history and logbook.

check_box Take the car for a test drive on different roads.

check_box Listen for unusual noises when braking or turning.

check_box Confirm the VIN matches the paperwork.

A mechanic’s inspection is still the safest option!

How much a car will cost

Car costs can be divided into purchase costs and ongoing costs.

Before you buy a car, work out how much it costs to keep it on the road (the ongoing costs). It might be more than you think.

Car registration

Your car has to be registered before you can drive it, and you have to pay rego every year. How much you pay depends on where you live and what type of vehicle it is. Check with your state or territory's registration and licensing authority.

• NSW registrations
• VIC registrations
• QLD registrations
• WA registrations
• SA registrations
• ACT registrations
• TAS registrations
• NT registrations

Car insurance

You need basic insurance, called compulsory third party (CTP) insurance, to register and drive your car. This is the minimum insurance you can have and, in all states and territories except NSW, CTP insurance is included in your car registration costs. In NSW CTP (“Green Slip”) must be purchased separately from a licensed insurer and you will not be able to register your vehicle unless you’ve purchased it.

You can also choose to get extra insurance, that covers more situations. The types of car insurance are:

Compulsory Third Party (CTP): covers injuries to people caused by your car. Does not cover damage to cars or property. You must have CTP to register your car.

Third Party Property Damage: does not cover damage to your car but covers damage to other people’s cars or property caused by your car – which can really add up.

Third party property damage, fire and theft: this includes the same cover as Third Party Property Damage (above), plus it covers your car if it’s stolen or damaged by fire.

Comprehensive: covers damage to your car and other people’s cars or property, even if you caused the accident. Also covers your car if it’s stolen or damaged by fire or weather events. It won’t cover everything though – make sure you check what the exclusions are.

Repairs and maintenance

A trip to the mechanic is a major hidden cost of having a car. Servicing, tyres and unexpected repairs can cost hundreds of dollars each year. Regular maintenance helps keep your car safe and reduces the risk of major problems.

Petrol, parking and more

Petrol prices can change often and add up quickly. And unlike catching public transport, you have to park your car somewhere when you arrive. Parking and speeding fines – and even using tolls roads – can be a nasty surprise.

If you’re buying an electric vehicle, think about where you will charge it. Charging it at home might not always be practical, so include the cost of public charging stations in your budget.

How to pay for the car

If you’ve decided you can afford the running costs of a car, the next step is to buy one!

If you don't have enough savings, you might choose to apply for a car loan. You'll have to make regular repayments to pay back the loan and pay interest on top of what you borrow.

Car dealerships may offer you finance, but it's important to compare what they offer with other lenders (such as your bank) as well.