Buying A Car From A Private Seller Australia

Buying a car from a private seller can be a headache but with our 5 smart steps, you will avoid the lemons, find a reliable car and protect yourself.

In this guide, get expert insights on how to conduct a comprehensive vehicle inspection. Includes a checklist, how to identify odometer rollback, essential vehicle identification number (VIN) checks and deposit and sale receipt templates to protect yourself before handing over your money and taking the key. You can use the links below to jump to the section you are interested in:

What to Check for When Buying a Car From a Private Seller

Step 1: Check for Any Red Flags with a Car History Check

The first step when buying a used car privately is to do a car history check. You can check online using the Personal Property Securities Register (PPSR) for a small fee or learn how to do a free vehicle check before buying with a PPSR certificate. You will need the Vehicle Identification Number (VIN) to check any used vehicle built after 1st January 1989. This step is essential to avoid potential financial liabilities. It also ensures a smooth ownership transition.

The PPSR check includes a vehicle history report from NEVDIS to tell you if the car you’re interested in is:

• Debt Free
• Not Stolen
• Not Written-Off (WOVR)

The PPSR offers a valuable service that can protect you from the potential repossession of your car by a credit provider. For the small fee they charge, they provide a certificate that confirms that the car is unencumbered (no finance owing). This certificate proves that your vehicle is free from any debts and helps you avoid any legal complications down the road.

Buying a car privately with outstanding finance

If there is money owing DO NOT hand over any money to the seller.

If the seller needs to use the money from the buyer to cover the car loan (encumbrance), the quickest, safest and easiest way is to travel to the bank or lending institute together to complete the transaction. A bank officer will facilitate the transfer. If this is not possible it’s crucial to take certain steps. Learn how to buy a car with finance owing here.

Step 2: What to Ask When Buying a Used Car From a Private Seller

You should always ask the seller to see the service book to help establish future reliability. The service records and repair records can tell you a lot. They are considered the window to the future reliability of any used car.

Look for evidence of routine maintenance, such as oil changes and fluid replacements. A well-documented service history indicates the previous owner(s) took proper care. Following the manufacturer’s recommendations will likely lead to better performance and reliability. Look for regular replacement service items that have been replaced and the date they were replaced. Here is a list:

• Engine oil – is important to prevent premature engine wear. If the engine oil is used beyond the specified period, contamination causing greater friction of metal parts in the engine occurs. A regular engine oil change is important for the future life of any engine.
• The engine oil filter – is usually done at the same time the engine oil is replaced.
• Air filter – is important because it maintains the inside of the engine by keeping it free of dust, insects and pollutants. Clean air is one of the things your car needs other than fuel.
• Fuel filter – replacement is important because it keeps the entire fuel system clean and free of foreign matter so the correct amount can enter the engine.
• Spark plugs – are essential not only for engine performance and fuel economy but for other electrical components as well. If the spark plugs are used beyond the specified miles resistance builds and makes the ignition coil and spark plug leads work much harder.
• Drive belts are usually external belts with no covers and are located at the front of the engine in front of the timing belt or timing chain covers. The belts connect the engine rotation to drive the alternator, power steering, and air conditioning. There is no specific interval to replace them but to inspect and adjust.
• Timing belt – is hidden behind covers at the front of the engine. Its job is to connect the bottom of the engine to the top of the engine and hence the name keeps the engine and components in time. Not all vehicles have timing belts but a timing chain instead. Apart from adjustments that can be made on certain engines, there is usually no specific replacement interval for timing chains therefore replacement is only necessary when the timing chain tensioner and guides wear making a tinny noise when the engine is idling.
• Brake pads/Brake shoes – service life is usually between 40,000 to 60,000 kilometres with the front brake pads wearing faster than the rear. European cars tend to wear brake pads faster. Most modern cars all have disc brakes which means they have brake pads.
• Brake fluid is a specially blended hydraulic fluid that transfers pressure to the main braking components like the wheel cylinders and callipers. Brake fluid becomes contaminated over time reducing its characteristics and must be replaced at specific intervals depending on the vehicle manufacturer.
• Regularly replacing the coolant is essential in preventing a blown head gasket. Coolant, a mixture of water and antifreeze (ethylene glycol), reduces the freezing point of water in the cooling system. It prevents rust and corrosion. It also lubricates the water pump while efficiently transferring heat from the engine to the radiator. In colder, the coolant should be checked and changed annually, while in warmer may require replacement every couple of years. Doing this ensures optimal performance and reduces the risk of head gasket issues.

Service records and invoices hold significance for both buyers and sellers.

• For the buyer – It gives you a window into the vehicle’s history including ownership and helps with identification. It also gives you a resale tool.
• For the seller – It is an important sales tool that is money!

If the seller was selling the vehicle to a car dealer without a service history book or service/repair invoices the seller can lose up to $4,000 in the $20,000 price bracket.

Step 3: Check if the kilometres are Genuine – Odometer Rollback

Buyers can protect themselves by checking the logbook history to make sure the odometer readings match up or by having the car inspected by a mechanic before purchase. But, not all large motoring organisations will check vehicle history service or repair records. The Royal Automobile Club of Queensland (RACQ) says on its terms and conditions:

Any documents with the vehicle, such as the vehicle service records, vehicle owner’s manual, damage reports and repair records, are not inspected. We do not prepare those documents or verify their accuracy and so will not be making any assessment as to whether their contents are accurate.

When inspecting a car for odometer fraud, does the overall condition align with the age and kilometres travelled? For instance, read our blog post on “Mitsubishi Pajero Issues Exposed 32,000ks” to understand specific examples. Remember, average kilometres vary based on usage, location, and vehicle type. On average, private use accounts for 15,000 kilometres per year, higher for company use.

If the car has low mileage and is under two years old, compare it with the tyres including the spare. Tread depth indicators are essential to assess tyre wear, with a minimum of 1.5mm recommended. Additionally, check for UV damage signs like discolouration, cracks, or brittleness.

Interior Wear – be cautious if the interior wear and tear including seat belts doesn’t match the displayed kilometres, as the speedometer may have been tampered with (wound back).

If you’re buying a second-hand motor vehicle in NSW you can use the free registration check to get the past 3 odometer readings.

Step 4: Do a Road Test

When taking the car for a test drive, it’s a good idea to choose quiet roads to focus on the vehicle, ensuring it’s adequately insured. Take your time, as a quick spin around the block won’t suffice. Evaluate engine performance during cruising, accelerating, and decelerating on various terrains. Ensure smooth gear shifts and monitor the dashboard for warning lights and temperature gauges. Listen for rattles or body noises over speed humps. Check for smoke in the exhaust during uphill acceleration. Assess steering play, potential pulling, and brake performance. Evaluate rear visibility using NRMA reversing visibility test results for assistance.

The road test helps you make a product decision if you have more than one car you’re interested in buying. You get a feel for how a particular car drives and make sure it meets your needs before making a product decision and a final buying decision. It also, helps you feel if the car’s odometer is genuine too.

Step 5: Check for Proof of Ownership and Verify Vehicle Identification

It is important to check for proof of ownership before handing over a deposit or full amount. Check the seller’s identification (driver’s license) details match the details on the most recent registration certificate. Also, do all the vehicle identifiers including the rego number, VIN, engine number, make, model, year, colour and any other information on the registration certificate match the vehicle details?

Completing the Vehicle Details:

Record the Vehicle’s Identification Particulars That You Get From the Car Itself

• Record the registration number, engine number, vehicle identification number (VIN) or chassis number from the vehicle’s body/chassis, manufacturer plate and compliance plate. You can usually find the VIN etched into the body or chassis and the engine number on the engine block (the main part of the engine). If you have problems ask the manufacturer or your local service station/mechanic.
• Now check them against the seller’s ownership papers like registration papers, roadworthy certificates or safety certificates, car history reports (PPSR) e.t.c (see below):

Using the PPSR report you got:

1. Confirm registration number plates, engine and VIN (Chassis numbers pre-1981) numbers from the car itself match those on the seller’s registration certificate and PPSR report.
2. Ask yourself, Is the vehicle the one it is supposed to be?
3. Check if the vehicle was used as a taxi or rent-a-car.
4. Demand to have a copy of any required documents that outline the roadworthiness/safety of the vehicle that may be required by any state or jurisdiction. Depending on your area, you may need these to transfer registration from the seller to the buyer. If you don’t you will be buying an unregistered vehicle.

Complete the Seller’s Details:

Make sure the person selling the car is the real owner. Determine this by asking for the seller’s driving license or any other form of identity. Different States and Territories make available the required paperwork like online transfer forms that you can print out.

What to Do Before You Drive Off?

1. Get a cover note from your insurance company
2. Make sure you get all the keys to the car
3. Get the service book/log book and owner’s manual
4. If there’s an alarm, find out how to de-activate it
5. Is there a hidden ignition switch/immobilizer?
6. Remove any E Tags or Toll Tags from the vehicle

Is Buying from a Private Seller Better Than Auctions or Dealerships?

When purchasing a used car, making the right decision depends on your risk tolerance and the level of assurance you seek. Opting for a new car from a reputable dealer tends to be the least risky choice due to its brand-new condition and accompanying warranty, offering peace of mind. On the other end of the spectrum lies buying a car from an auction, which entails the highest risk factors – vehicles are unavailable for test drives. Also, have difficulty assessing their ownership history.

To help you make an informed choice, let’s explore the advantages and drawbacks of three primary options: buying from a dealer, a private sale, or an auction.

Buying from a Private Sale: Pros and Cons

Pros:

• Potential Bargains: Private sellers may offer more competitive prices, providing opportunities for cost savings.
• Direct Communication: You can directly interact with the current owner, gaining valuable insights about the vehicle’s history.

Cons:

• Limited Recourse: Unlike dealerships, private sales may not offer warranties or guarantees, increasing the risk of unforeseen issues.
• Lack of Selection: The range of available vehicles might be limited compared to dealerships.

Buying from a Dealer in Australia: Pros and Cons:

Certified Pre-Owned Vehicles (CPO) have gained popularity in the automotive market. While most come with their in-house dealer inspections, including history checks, you still need an independent pre-purchase car inspection by a qualified mechanic who can spot repair damage to paint or panels caused by accidents. CPO offers benefits like factory-backed warranties, low mileage, and like-new condition. Dealers like Toyota have a Certified Pre-Owned Warranty and use CPO to attract customers and build long-term relationships. Buyers can save thousands compared to new vehicles, making CPO a compelling choice in the market.

Pros:

• Reliability: Dealers typically inspect and refurbish used cars before selling them, providing a level of assurance in terms of vehicle condition and reliability.
• Warranty: Many dealers offer warranties or guarantees on used cars, providing additional protection and peace of mind.
• Trade-ins: Dealers may accept trade-ins, allowing you to offset the cost of your new purchase by trading in your old vehicle.
• Financing Options: Dealers often provide financing options, making it more convenient to purchase a used car by offering loans and payment plans.
• Professional Guidance: Dealerships usually have knowledgeable sales staff who can assist you in choosing the right car based on your needs, preferences, and budget.

Cons:

• Higher Prices: Compared to private sales or auctions, dealership prices tend to be higher due to added services and assurances.
• Limited Negotiation: While negotiation is possible, dealerships may have less flexibility in price negotiations compared to private sellers.
• Limited Selection: Dealerships may have a more limited selection of used cars compared to online platforms or private sellers, limiting your options.
• Sales Pressure: Some dealerships employ high-pressure sales tactics, which can make the car buying experience stressful or uncomfortable.

Buying from an Auction: Pros and Cons:

Pros:

• Competitive Prices: Cars at auctions often sell at competitive prices, which can potentially result in significant savings compared to buying from a dealer or private seller.
• Unique Finds: You might discover rare or unique models commonly unavailable elsewhere.
• Wide Selection: Auctions offer a wide variety of vehicles, including different makes, models, and price ranges, providing ample choices for buyers.
• Transparency: Auctions typically provide detailed information about the vehicles, such as vehicle history reports, condition reports, and odometer readings, enabling buyers to make informed decisions.
• Quick Purchase Process: Once you successfully bid on a car, the purchase process is usually straightforward and efficient, allowing you to acquire the vehicle relatively quickly.
• Potential for Bargains: Occasionally, buyers can find exceptional deals like ex-government cars for sale or rare vehicles at auctions, offering the opportunity to get great value for their money.

Cons:

• Uncertain Condition: Since test drives are usually unavailable, assessing the car’s condition can be challenging.
• Limited Information: Detailed vehicle history may not always be accessible, making it harder to make an informed decision.
• Limited Inspection Time: Buyers often have limited time to inspect the vehicles before the auction, which means you may not have sufficient opportunity to thoroughly assess the condition of the car.
• No Test Drives: In most cases, test drives are not allowed at auctions, preventing you from experiencing the car’s performance firsthand.
• No Warranties: Vehicles sold at auctions are typically sold “as-is,” without any warranties or guarantees, which means you bear the responsibility for any potential repairs or issues.
• Competitive Bidding: Auctions can be highly competitive, with other bidders vying for the same vehicles, potentially driving up the final sale prices.
• Limited Recourse: Once you win a bid and purchase the car, there is often limited recourse if you discover issues or problems with the vehicle after the sale.

When considering buying from an auction, it’s crucial to research the auction process, familiarize yourself with the vehicle’s history, and set a budget to ensure you make an informed and sensible purchase decision.

Ultimately, the best place to buy a used car depends on your preferences, budget, and risk tolerance. Weighing the advantages and disadvantages of each option can help you make a well-informed decision that aligns with your needs and ensures a satisfying car-buying experience.