- Buying a used car requires a few considerations and can offer better value than new cars if carefully selected.
- Private sellers let you negotiate but handle your own paperwork, while dealerships offer convenience and warranties at higher prices.
When it comes to buying a used car, there’s a lot to factor in. You'll need to consider price, the age of the car, kilometres travelled, physical and mechanical condition, and the list goes on. For many Australians, a used car can often provide better value for money than a new car, provided it’s not a lemon.
Factors to consider when buying a used car
The used car market can be a complicated beast. By navigating this complicated beast, the silver-lining lies in your ability to save hard-earned cash.
Price
Price is one of the most important factors in the used car market. Navigating price however can be tricky.
Some private sellers price their vehicles based on a desired payout rather than true market value, often listing them thousands above worth. Others, both private sellers and dealerships, are more reasonable and open to fair negotiation without resorting to lowball offers.
Price ultimately comes down to your current financial position and your budget. When deciding on a budget, it’s important to factor in the ultimate cost of the car, rather than just the initial price of the sale. This ultimate cost includes stamp duty, registration and transfer costs, maintenance, repair costs and car insurance.
You can use handy tools like RedBook, Drive, and CarSales to determine the value of used cars.
Condition
For everyday Australians, it can be tough to determine whether the used car you have your eyes on is a ‘lemon’. In fact, Allianz Australia notes Australians are missing key steps during the used car inspection process, such as organising a mechanic's inspection (73%), viewing the car’s logbook (48%), and checking whether the car had been in an accident (42%). All three of these factors are simple, yet significant checks that help determine the physical and mechanical condition of the car prior to purchase.
The condition of a used car will ultimately determine its longevity and the number of hits to your back pocket. If you dive straight into a sale without checking what lies under the bonnet, you may be slugged with unexpected costs and associated fees from immediate repairs.
Mechanical checks are a must for your safety and the safety of your passengers. No matter your location, mechanics often offer mobile services to perform pre-purchase mechanical inspections - all that’s required is a quick online search.
Some of the most common providers include:
- Roadside assistance or state based motor trade associations - RACQ, RACV, RAA, RAC, RACT, NRMA & AANT.
- RedBook.
- Independent mechanics.
Tools also lie at your disposal that cost no more than a gold coin. The Federal Government Personal Property Securities Register (PPSR) provides a search engine that can help you check if the car you’re buying is recorded as debt-free, stolen or written off.
Take note that there may also be different laws in your state when it comes to buying or selling a written-off vehicle.
Safety
When buying a vehicle, safety should be amongst your top priorities. If the unfortunate happens and you are involved in a crash, regardless of who’s at fault, your choice of vehicle could make the world of difference.
Generally, newer vehicles provide increased protection in a crash and include a range of active and passive safety features and technologies. An easy rule of thumb is, ‘Buy the safest car you can afford’.
If the used car your heart desires is manufactured 2018 or more recent, ANCAP safety provides comprehensive safety rating information. If it’s a bit older than that then never fear, the Queensland Department of Transport and Main Roads, together with the Monash University Accident Research Centre (MUARC), provides a Used Car Safety Rating list for used car models manufactured from 2000 onwards.
Some simple safety checks that you can complete prior to a professional inspection include:
- Ensuring seatbelts are in good working order.
- All airbags are intact.
- All brakes and brake lights function efficiently.
- Tread on tyres is sufficient - stick a 20c piece in the tread; if the platypus' bill is obscured then you have enough tread.
- Headlights are functioning.
- Vehicle comes with a spare tyre and tools.
- Dashboard is in working order.
In the market for a new car? The table below features car loans with some of the lowest interest rates on the market.
| Lender | Car Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Interest Type | Vehicle Type | Maximum Vehicle Age | Ongoing Fee | Upfront Fee | Total Repayment | Early Repayment | Instant Approval | Online Application | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 7.07% p.a. | $579 | Variable | New | $8 | $400 | $34,749 |
| Promoted | Disclosure | |||||||||
5.67% p.a. | 6.10% p.a. | $575 | Fixed | New | $0 | $350 | $34,524 |
| |||||||||||
5.95% p.a. | 5.95% p.a. | $579 | Fixed | New | $0 | $0 | $34,757 |
| Promoted | Disclosure |
Private seller vs dealership vs auction
With three out of four vehicles purchased in Australia being used, deciding who to buy your used car from can be tricky.
Private seller
One of the strongest arguments for buying from a private seller is that you, the buyer, can haggle for the best possible price. The downside is that what you sacrifice in peace of mind from a reputable dealership can ultimately result in a lower price through a private seller.
When you buy a car from a private seller, you and the seller must handle all the details yourselves. Few, if any, private sellers will accept a trade-in, so if you want to sell your current car, you’ll have to sell it privately. Completing the paperwork, transferring title and registration, and paying the various fees will be up to you and the seller.
By staying on your toes, there’s a good chance you can find a mechanically sound, carefully driven used car for a great price via a private sale. Car Sales has a handy feature which details to the buyer if the car advertisement is a low, good, or great price.
Dealership
Buying through a dealer removes some of the pressure of a used car sale because it’s something they do on a daily basis. The dealer knows the ins and outs of a sale and understands the paperwork, including transfer of title and registration, and can organise a trade-in on your old vehicle.
Used cars sold through licensed dealers are typically less likely to break down immediately after purchase, and if they do, the repairs are, in most case,s covered by a statutory warranty. This means repairs are guaranteed on parts for a period of time. Statutory warranties are covered under consumer law, yet can vary state-to-state.
Dealerships will generally try to sell used cars at a higher price because, after all, they are in the money-making business of profits. It’s therefore important to prepare yourself if you go down the dealership route by understanding the current market price of the used car your eyes are on.
Auction
Buying a car at auction can save you thousands if you find one in great condition at a low reserve price, with few bidders. While the hustle and bustle of car auction houses can keep you on your toes, it comes with risks given that test drives aren’t allowed, condition reports may not reflect the vehicle’s full history, and there’s no cooling-off period once the sale is complete
Used car hurdles
Lying within the used car buying process you may encounter several hurdles that need to be overcome both before and after the keys to your ‘new’ car are placed in the palms of your hands.
These hurdles outlined by Allianz Australia can include:
Research not meeting expectations prior to and post-inspection.
Private sellers share little or no information about the car, making it hard to understand the car’s history.
Private sellers failing to understand the process of handing over details and documents to do with the sale – it’s much more than just swapping cash for keys!
The used vehicle requires immediate repairs and attention from a mechanic as it turns out to be ‘a lemon’.
Pros and cons of buying a used car
Pros
Cheaper than buying new – Avoid immediate depreciation and potentially save thousands.
Transferable manufacturer warranty – Some used cars still carry transferable warranties that offer added protection.
Dealership security – Dealers are legally required to inspect and repair vehicles before sale.
Cons
Unclear vehicle history – Even with a PPSR check, a car’s full history isn’t always known.
Greater risk of breakdowns – There’s no guarantee how long the car will run reliably.
Costly repairs – Maintenance and repairs can quickly eat into your initial savings.
Longer private sale process – Private purchases can be time-consuming and harder to coordinate.
Seller may back out – Verbal agreements aren’t binding, and sellers may accept a better offer.
Savings.com.au’s two cents
With the used car market running hot, it’s important to stick to your guns and avoid being rushed into a sale – there will always be another deal! Research and mechanical inspections are critical to avoid purchasing a lemon and hurting your back pocket down the track.
Consider using all the tools at your disposal, know your budget, stick to it, and arm yourself with a pricing guide to ensure you are paying a reasonable amount for your next new car. Always be prepared to walk away from both a private seller and a dealership to clarify your thinking, and don’t be afraid to ask for another opinion from a family member or friend.
