Finding the right car

Here's how to shop around for a new or used car to be sure you don't end up with a lemon.

Dealers, auctions or buying privately

Smart tip

Most auction houses ask for a deposit at the fall of the hammer, so make sure you have the deposit available.

Classified ads in newspapers, car magazines and online car sales sites are a good place to start when looking for a car. The cars you see advertised may be for sale at car dealerships, auction houses or at private homes.

Auctions

Buying a car at an auction can be cheaper but there's no warranty, no test drives and no inspections. Make sure you check the paperwork and research any debts and warnings on pre-owned cars you see at auction. You can do this by checking the Personal Property Securities Register (PPSR) - a national service allowing you to check a private vehicle before you buy.

Do your homework before making a bid at an auction. If you haven't bid at auction before, take along someone who has experience buying at auction.

Buying from a car dealer 

Cars sold by licensed dealers can be more expensive than buying privately but dealers guarantee the car won't be taken away from you because someone else owes money on it.

Dealers also have to give a warranty on cars under 10 years old that have travelled less than 160,000km.

Consumer affairs and fair trading government agencies regulate how cars can be sold through car dealers. Visit your state's agency to get more information on buying from a car dealer.

Extra insurance offered by car dealers

If you are arranging finance for your car you may also be offered add-on insurance products from a car dealer like loan protection, gap cover or tyre and rim insurance. Think twice before you take up these offers as they may not be good value for money and only pay in limited circumstances. Find out more about add-on insurance.

Private sales

Private sales can deliver a bargain. However, test-driving and mechanical inspections are a must.  Be sure to ask if the car has been in a crash.  Always go to the seller's home address. Don't arrange to meet them somewhere. Check that the home address is the same as the one on the registration certificate.

Take a test drive

The best way to assess a car, particularly a used car, is by taking a test drive. Whatever you do, always set aside enough time to do this.  Always look at cars during the daytime, as darkness may hide all kinds of problems. 

Consider taking a friend with you when you do a test drive. Those extra eyes, ears and hands will come in handy and it will help if they know something about cars.

If it's a rainy day don't go looking for cars.  The rain hides previous paintwork, nicks, and scratches, and makes thin, worn paint look slick and shiny. 

Get a qualified mechanic

If you don't feel confident about doing your own inspection, bring along a qualified car mechanic. The cost of this will be worth it when you get a car in good working condition. All state and territory automobile clubs offer a comprehensive mechanical inspection service.  

Safe cars save you money

Smart tip

Visit www.howsafeisyourcar.com.au to check the car's crash rating before you buy.

Buying a car with advanced safety features such as anti-lock brakes, air bags, electronic stability control and high crash protection ratings will decrease the chances of serious injury and death in the event of a crash, reduce the cost of your car insurance and may also boost your vehicle's resale value.

If you want to know what safety features to look for in your first car, go to: Australian New Car Assessment Program (ANCAP) and Used Car Safety Rating Program (UCSRP).

Check the warranty

Smart tip

There is usually no warranty if you buy a car privately.

The purpose of a warranty is to save you major expenses when your car breaks down.

Manufacturer's warranties on new cars

A manufacturer's warranty applies to all new cars, and goes with the car even if it changes owners within the warranty period.  A full manufacturer's warranty provides all service necessary and is free of charge to the owner. If something is wrong mechanically with the car it will be fixed free of charge. 

Used car warranties

Used car warranties vary from car to car.  Low-mileage late-model used cars may have some of the original manufacturer's warranty remaining, which is then transferred to the new car owner.

Extended warranties

Watch out for extended warranties offered by some dealers. Car dealers usually receive a commission for selling these products so make sure you are getting value for money.

See the ACCC's warranties webpage and NSW Fair Trading's extended warranties webpage for more information.

Read the contract carefully

A sale contract is a legally binding agreement between the seller (dealership) and buyer (you). Before signing a contract you should:

  • Read it carefully, including the fine print
  • Don't be pressured into signing it on the spot (If you need more time to read it then take it home to read through.)
  • Get help to understand the contract
  • Never sign a contract that contains blank spaces
  • Make sure that all parties initial any changes that are made to the contract you sign
  • Always get a copy of any contract you sign

Some contracts cannot be cancelled because you change your mind. For more information on cooling off periods when you can change your mind on car contracts, see your state's fair trading or consumer affairs website.


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Last updated: 26 Feb 2016