A Guide on Buying a Car Privately in Australia

Both buying a car privately and buying a car from a dealer have their pros and cons. For most buyers, the biggest benefits of buying a car privately is the chance at getting a better deal financially. The perception is that car dealerships have a few tricks up their sleeve to ensure that you don’t walk away with too much of a bargain.

If you do some quick online comparisons between private car prices and dealership car prices, you’ll see that the car dealers often cost more. What people don’t realise is that this is often due to the relative safety that comes with buying from a dealer compared with buying a car privately.

If you are looking to buy your vehicle privately, it means you have to be more thorough. This guide will give you the checklist you need to ensure you’re making the right purchase for your needs.

Know that you may be buying without the safety nets

When you buy a car privately, you don’t get to enjoy the ‘cooling-off period’ that is provided by car dealerships. The cooling-off period gives you a chance to go back on your purchase (for a small loss) during an agreed period of time. However, if you are buying privately, once you process payment, everything is final.

There is no statutory warranty either, but, if the car you are hoping to buy is over 10 years old or has travelled more than 160,000km, you won’t qualify and needn’t worry about it.

A statutory warranty is put in place so that if a part on your car needs repair within a certain timeframe after purchase, you’re able to have the dealer fix it. Most statutory car warranties cover you for 3 months or 5000km after purchase. These can only be offered by licensed car dealers.

Statutory Warranty and cooling-off periods can vary from state to state, so check your local authority for more details.

Still sold on buying a car privately? Start doing your legal checks

Let’s get into it.

As the buyer, it is your responsibility to check that the car hasn’t got money owing, been stolen or has been involved in any other criminal activity.

Adrian Allier from First Rate Car Loans suggests that “A Personal Property Securities Register (PPSR) check can check this all out for you. Head to the ‘Quick motor vehicle search’ section and you can enter in a vehicle’s VIN or ‘chassis’ number if the car was made before 1989. You must create an account to use the PPSR and fees do apply.”

Other red flags to look out for when buying a car privately are if the car is being sold well below the market average for no apparent reason or if the seller is asking for a full cash payment. This doesn’t necessarily mean the car is dodgy, but it should raise concerns.

Things that will make your vehicle purchase more expensive in the long run

Often, we are sold on the look of a car before weighing up all our options. Before you start looking at specific types of cars for sale, you should consider the following:

Fuel consumption: If you plan on having this car for a long time, buying something that doesn’t cost a fortune to fill will make things cheaper in the long run.

Insurance: The type of car you have can impact insurance costs greatly. If it’s fast, modified, or risky, odds are your insurance costs will be higher. How safe your car is also comes into play here. The safer it is, the less likely you are to be in an accident, which insurance companies love.

Holding value: Different brands have different reputations and this holds fast when it comes time for you to eventually sell. You may have got it for cheap, but does that mean it will be worthless when you want to sell in a few years?

Start by browsing for cars online

Online car search engines are the best place to find a private car for sale. Some of the biggest names in Australia are:

Some of the above cost to advertise on and some don’t, meaning you’ll get varied results on the same search between websites. At the beginning, put the same search into a few different websites and see what comes back, then narrow your focus from there.

Also remember to exclude ‘dealerships’ from your search if you are set on buying a car privately.

You’ve found your potential cars, now start calling sellers

You’ve been through the process of narrowing your list of cars in line with what their ads have detailed, now it’s time to find out anything they might be hiding. Never underestimate the sneakiness of a car seller, even when buying privately.

Here’s a few good topics to base your questions around:

  • Does it come with a Roadworthy Certificate (RWC)? This should be spoken about and agreed upon early.
  • Vehicle faults - is the car too good to be true?
  • Accident history and logbooks of services/repairs
  • Reason for selling the vehicle

These are all topics to talk about before inspection so that you aren’t wasting your time driving around looking at duds. Write down each person’s answers and bring them with you when you go for a physical inspection.

Organising to inspect the car

Once you have further shortened your list after initial phone calls, it’s time to organise inspections.

A few things to note when organising when and where to meet:

  • Meet at the address that is on the car’s registration. If they don’t want to, push them on their reason.
  • If the name on the car’s registration doesn’t match the seller’s name, be wary.
  • Whilst difficult, try to inspect the car on a dry day so that any driving faults aren’t masked by rain.
  • Don’t inspect the car at night as dents may be hard to see.

At the inspection

Bring a friend along with you so you have an extra set of eyes. The more they know about cars the better. Have your notes ready and add to them as you go.

Check that the details on the car’s registration match the:

  • Owner’s name
  • Number plate
  • Engine number
  • VIN

Then, ask the same questions you asked over the phone and check if their answers are consistent. If they are, start working your way around the car systematically conducting the following tests.

Outside the car

  • Look for rust. Look under the car, on side panels and inside tire wheels.
  • Look for welding marks as they are a sign of major repairs.
  • Check the gaps between body panels. If it looks larger than usual, some work has been done.
  • Check to see if the tyres are worn. They can be a big cost if they fail soon after purchase.
  • Check the car’s suspension by pushing down above each wheel. Shocks should go down, up and then stop. Repeat a few times.
  • Lay down in at the front or back of the bar and check that the wheels are aligned. If they aren’t it could mean a bent chassis.

Pop the hood

  • Look for rust again.
  • Check for any sign of liquid leaks both in and and under the engine.
  • Check the oil. If it is low, then odds are the car hasn’t been looked after.
  • Check the coolant before you test the car as it will be too hot after a drive. If the coolant tank is empty and brown sludge is visible, or the coolant itself is brown, it means there’s a leak.

Inside the car

  • Check for rust again, especially on the floors.
  • Jiggle the steering wheel when the car is off. It should go an inch either way, with no funny noises. If it doesn’t, the car could have steering problems.
  • Check that all seatbelts work. Test them a few times.
  • Start the car with a ‘cold’ engine to see if there are any obvious starter problems. Also get someone to see if smoke comes out of the exhaust when you start it up.
  • Check wear on the driver’s seat and pedals for signs of tampering, especially if the car has unusually low kilometres for it’s age.
  • Check all the electrics:
    • Keyless entry
    • Locks
    • Alarm
    • Windows
    • Audio
    • Seats
    • Fans
  • Test the heater at full blast to see how long it takes to become warm. Same goes for the air conditioning to feel cool.

Get driving

Use a route chosen by you and have your friend sit in the back to get a different perspective. Try to spend up to half an hour test driving in a range of different traffic conditions.

Also, turn the radio off, it will allow you to hear things better.

There’s a number of things to look out for whilst driving:

  • With the handbrake on, try to slowly accelerate. The handbrake should hold the car back.
  • If testing a manual transmission, it should be smooth to put into gear and the clutch should engage close to the floor.
  • Drive in reverse and check that everything is aligned.
  • The brakes should not squeal excessively, grind or shudder. A little bit of squeaking is normal for some brakes, so feel it out.
  • Whilst parked with the engine running, turn the wheel completely each way. If it squeals, it might mean power steering problems. If it growls, that could mean low power steering fluid which stems from a leak in the system.
  • Get out of the car and check the transmission fluid whilst the car is running. It should look clean and smell sweet. Brown or burnt orange fluid means it has been a long time between changes. A burnt smell could mean the clutch band is slipping which may equal a transmission rebuild.
  • Check the oil again after the test drive when the car is off and cooled slightly. It should have no gritty residue.
  • Look under the oil cap for a white foamy substance. If it’s there, this can mean coolant in the oil, which will be expensive to fix.
  • Check for oil in the air filter and air intake (engine side of the filter). This can be a sign of a lot of kilometres or a revhead driver.

Even if everything checks out, don’t start talking prices yet. You need to go home and review your notes before going back with an offer.

Making the purchase

Review your notes or jot them down as soon as you can after the test drive. Do some research on how much things could cost you to fix, then subtract this from the asking price. You now have your maximum offer. Knock another few hundred off that and you’ve got your negotiating range. Don’t move outside of it!

Some other points to remember:

  • Don’t be scared of making an offer much lower than the asking price. They can only say ‘no’.
  • Do no rush up to your maximum limit. You’ll have this car for a few years, so take your time.
  • Don’t be afraid to end the conversation if the seller won’t work with your budget. You need them to be the desperate one.
  • Don’t let on that this is your dream car. You’ll instantly put the seller at an advantage.

Patience is the key.

Get the paperwork in order

Once the price has been agreed, get it in writing from the seller. Then it’s time for paperwork. Try to get originals of everything - no photocopies.

Each state has their own paperwork and requirements when it comes to buying or selling a vehicle, so it is best to look at details for the state you are purchasing in:

As a rule, you’ll need to have the following:

  • Roadworthy certificate (or similar) if it was agreed upon
  • Registration transfer
  • Registration papers
  • Service history
  • Logbook
  • Receipt for your payment

Remember, once the funds have been transferred, everything is final.

Something wrong after purchase?

If something goes wrong after purchase, it can be difficult to get your money back. If you follow the above guide, your chances of buying a lemon will reduce, so be thorough.

Good luck and happy car hunting.

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