|NRMA CarWise helps you select the right used car, conducts a background check on the car you wish to buy and provides key information to help you negotiate the right price.
Note: the following information is intended primarily for use in NSW and the ACT
Choosing the right car
You need to consider more than budget when looking for the right car. You also need to consider:
- your price limit
- safety and security
- the makes and models you like
- fuel consumption vs performance – high-performance usually = high consumption
- running costs – high-tech and luxury imported models can be expensive to service, repair and insure. Check the prices of common spare parts (eg headlights, oil and air filters) and insurance premiums.
- how many passengers you normally carry
- whether you need power to tow a trailer or boat
- space for work materials (tools, samples) or sport gear (golf clubs, skis)
- whether you need room for sleeping – most passenger vans and some sedans and wagons can be converted to provide a bed.
Know the real cost
There’s more to the cost of a car than the retail price. Extra costs include stamp duty, registration, the transfer fee and insurance. Once you’ve got the car, there are running and maintenance costs to consider. These vary from model to model, so factor them into your budget early on. Get an NRMA Insurance quote and consult your car repairer to get an idea of service and repair costs, especially on common parts such as wiper blades and filters.
Set an upper limit to your budget and stick to it.
Make sure the car you love is also the car you can afford with our guide to Vehicle operating costs.
Where to buy
There are several places to buy used cars, each with its own pros and cons. How you choose between them will depend on your priorities. If you’re concerned about price, then privately may be the way to go. But if it’s a guarantee of title you’re after, a dealership could be better.
|Guarantee of title||Often more expensive|
|Warranty available in NSW & ACT on cars under 10 years or 160,000km & below the Luxury Tax Threshold in NSW||A trade-in may not get the best price for your old car|
|Best legal protection||Generally, you pay more at a dealer but have a guarantee of title.|
To get the best quality used car, go to a dealership that specialises in the makes you like. Often, loyal car owners will have their car serviced where they bought it, then trade it in there. Plus, new car dealers usually don’t sell ‘lemons’. Any used cars they don’t like they dispose of at trade auctions.
|Often cheaper||No warranty|
|No security of title|
|No legal comeback if you get a lemon|
When you buy privately, you’re taking a risk. You’ll probably get a cheaper car, but you’re not guaranteed a clear title, and you’ve got no legal backup. Reduce your risk by checking with the RTA and REVS.
|May be cheaper||No warranty|
|Guarantee of title||Can’t test drive|
|No legal comeback if you get a lemon|
|Not much time to check car’s history|
You can save money at an auction, but you must do your homework.
Ex-government and fleet cars are often good value and have usually been regularly maintained but they might not have been driven as carefully as privately owned cars. Fowles Auction Group, Moorebank, holds auctions of ex-government vehicles every Tuesday – 9.30am passenger cars, 12:00pm Commercials and 4WD vehicles.
|You don’t have to drive to dealerships||You may not be able to see/test drive cars|
|There’s plenty of research material available|
|You don’t have to negotiate face-to-face|
Ways to pay
The general rule about borrowing money is: the longer you take, the more you pay. Only borrow as much as you need, and don’t over-commit.
- pay as much as you can up front – in cash or as a trade-in – and pay less interest.
- pay for your car with a bank cheque (if possible) so you don’t have to carry a large amount of cash around.
- get a receipt from the seller. Our print-friendly buyers’ kit includes a receipt form.
- shop around for the best finance deal.
- consider leasing or hire-purchase, particularly if you’re in business. You may be eligible to claim some of the payments as tax deductions. Talk to your accountant or business adviser before entering into a lease or hire-purchase agreement.
You can only get a warranty on a used car if you buy through a dealer. Each state has different laws regarding warranties. In NSW and the ACT, all non-commercial cars under ten years/160,000km (and under the luxury car tax limit in NSW) have a minimum warranty of three months or 5,000km – whichever comes first, unless a form six is displayed excluding certain items.
Basically, you are covered for the car and all accessories fitted at time of sale, but you are not covered for superficial damage (eg, to paint, upholstery) or normal wear and tear.
You are not covered for:
- any items listed on the defect notice
- routine adjustments and services
- tune ups
- tyres (however tyres must be roadworthy at time of sale)
- defects arising from an accident or misuse of the vehicle (ie motorsport).
You should check with the dealer which items are covered and which are not. If any faults are found, you might be able to get the dealer to repair them before you buy.
For more information about warranties read our new and used car warranties Q&A and state by state warranty information.
False advertising is illegal but you need to be wary of vague or exaggerated claims. Do your research before you enter a car yard – know the type of car you want and how much you can afford. Advertisements must state if statutory charges are extra, and the general term ‘plus on-road costs’ is prohibited in NSW.
Part 2 – Doing the deal
Used cars have their advantages and disadvantages. They cost less but they could have mechanical problems the seller hasn’t told you or doesn’t even know about. Find out what’s involved in buying a used car and how to reduce the risk of a bad buy.
Note: the following information is intended primarily for use in NSW and the ACT
Checking over the car
You don’t have to be a mechanic to do an initial check on the condition of a used car. Use our initial inspection checklist to assess the condition.
It’s unwise to buy a used car which has major faults – unless you’re particularly keen on a vehicle and are prepared to have it fixed. Do a preliminary inspection of any car you’re considering buying to see if it’s in good condition. Get our inspection checklist.
Essential safeguard checks
Check for stolen parts
It’s possible a used car has been involved in a serious accident and is not completely genuine. It could even have been repaired using stolen parts. In NSW, call the RTA (Roads and Traffic Authority) on 132 213 to ask if the vehicle has been reported as stolen or a write-off.
If it has been classified as ‘never to be registered again’ or as ‘repairable’, you should be extra careful. Check the owner is genuine.
If you buy privately, it’s vital you establish the seller is the genuine owner. Cars sold while stolen or without the owner’s consent may be repossessed without compensation.
Insist the seller provides proof of identity (ie, a driver’s licence) and the car’s certificate of registration. Check the names and addresses match, and make a note of the details (including the driver’s licence number) for future reference.
For cars registered in NSW, contact the Roads and Traffic Authority (RTA) on 132 213 and ask if the registration is current, and if the seller is the registered owner.
Always inspect the car and negotiate the sale at the seller’s home address, as printed on the driver’s licence and certificate of registration.
Check no money is owed on the car
If you buy privately, make sure the car isn’t subject to a financial liability. If you buy a car with such a liability, it could be repossessed by a finance company.
In NSW and the ACT, phone REVS on 13 32 20 to find out if the car has any outstanding financial liabilities or checkout their website at www.revs.nsw.gov.au
The information is free but make sure you have the registration number, the chassis/VIN number and engine number at hand.
For a small fee REVS will provide a certificate stating the car is unencumbered, which can prevent repossession by a credit provider. Even after gaining a ‘clear title’, there can never be a 100% guarantee that the car you’re buying will not be repossessed by someone other than a credit provider.
Trading in your old car
Trading in your car for another is easier in some ways than selling and buying privately but it does have its drawbacks. The main one is that you probably won’t get as much money for it. After all, the dealer has to re-sell your car for a profit – and that’s after fixing any faults.
Trade-ins can also be confusing. For example, the amount offered for your old car could include a discount on the car you’re buying.
Ask the dealer to give you the total changeover price – how much you’ll pay to leave your old car and drive away in a new one. When all is said and done, that’s the only figure that matters.
Ignore dealers’ negative comments, such as: “nobody wants to buy that model anymore” or “your car isn’t in very good condition”. These are often just sales techniques to get you to accept a lower offer
You could – if you have time – get a trade-in price from the dealer, then try to sell it privately for more. You might have to wait a few extra weeks to get your new car but you’ll keep the dealer’s profit margin for yourself.
Negotiating a deal
You know what car you want and you’re ready to negotiate. Don’t take this step too lightly – you can usually negotiate a lower price than the dealer is asking.
It often depends on how keen you are to buy and how keen the seller is to sell. Used car prices vary widely, depending on the condition of the car, the fitted options, the number of kilometres on the clock and even the colour. Estimate a realistic price, then offer slightly less.
If the seller meets or gets close to your price, do the deal. If they don’t, walk away and look elsewhere.
The golden rule is to keep the seller uncertain whether you’re interested in buying that car or another one from someone else. Until the deal is done, the price can always go a little lower.
After one seller quotes you a price, ask other dealers if they can do better for similar cars.
When comparing prices, ask for the ‘on the road’ price, or ‘changeover price’ if you’re trading in your present car. This will include all options you’ve selected, and the statutory and dealer charges. It removes the risk of getting caught by a ‘hidden cost’ that you hadn’t considered.
Make the seller nominate the first figure, then mention any lower offers by other sellers to force the price down.
Don’t worry if someone else buys the once-in-a-lifetime bargain you’ve had your eyes on. Another car is sure to come along soon.
Leaving a deposit
If the seller asks for a deposit, there is no set amount to leave, so pay as little as possible. Make sure you can get the money refunded if the car fails the inspection report.
If the reported condition of the vehicle is not satisfactory to the purchaser, he/she may rescind the contract, and the deposit paid shall be refunded in full to the purchaser.‘Our print-friendly car buyers’ checklist includes a receipt form. Take the checklist with you when you look at a vehicle.
When a used car has changed hands, the registration has to be transferred from the seller to the buyer. It’s the buyer’s responsibility to make sure the registration is transferred according to the law.
But don’t rely on this! Make sure you fill out the seller’s disposal notice and submit it to the RTA as soon as possible. Ask the RTA for a stamped photocopy.
If the new owner doesn’t transfer the registration and gets a traffic fine, you then have proof you are no longer the owner.
The seller is required to
- complete, tear off and send the ‘Notice of Disposal’ section of the car’s Certificate of Registration to the nearest Motor Registry
- complete and sign the transfer details on the remaining part of the Certificate and give this to the buyer.
The buyer must lodge, in person, at the nearest Motor Registry office within 14 days of the purchase date:
- an ‘Application for Transfer of Registration’ form
- the Certificate of Registration
- the roadworthiness inspection report (if applicable)
Failure to do so could incur a fine. Postal applications will not be accepted. Proof of identity is required (details are on the back of the Certificate of Registration and in a brochure published by the Roads and Traffic Authority (RTA), ‘Buying a Used Vehicle’).
The seller must
- complete the transfer details on a ‘Notice of Disposal’ form and lodge it with the Registrar of Motor Vehicles within 14 days.
The buyer must
- apply for the transfer of registration, in person, within 14 days.
- Proof of ownership and residency in the ACT is required.
Soon after you buy a used car, it’s a good idea to change all oils – engine, transmission, final drive, brake/clutch fluid etc – plus the engine coolant.
Some of these oils/fluids might not have been changed for a very long time. Check to see if your car has a timing belt and when it was last replaced. It has a limited service life and must be changed regularly as recommended by the vehicle manufacturer.