Buying a used car can be a wise choice when it comes to keeping your costs down while getting enough bang for your buck. The downside, of course, is that a car that’s pre-loved may also come with some mechanical baggage.
To make sure that you get the pick of the bunch and don’t end up with a lemon, we’ve written the below guide on the top five things to avoid when buying a used car.
1. Shopping outside your price range
Car buyers find it easy to get carried away with excitement. Many people have fallen into the slippery slope of thinking ‘oh, for just a few dollars more, I can get this slightly better car’. By all means, getting the most value for your money is important, however, setting a realistic budget for your dream car is paramount.
Accessing and applying for vehicle finance is made easy with Finance One. Even if you’ve experienced bad credit, we will work with you, so you know what you can afford. Once you know your budget, you can start researching the market to find out what’s in your price range.
2. Not taking the car for a test driveIt should go without saying that you should avoid buying a second-hand car before taking it for a test drive first. Firstly, you’ll want to make sure that you enjoy driving the car! Understanding how a car drives is crucial, given you’ll be the one driving it. More importantly, you’ll want to look out for:
- Warning lights that come on while you’re driving — this might indicate a fault with the engine somewhere.
- That the engine runs smoothly without any stalling or unusual noises.
- Air conditioning that is cold.
- Power windows all work smoothly.
- Instruments like windscreen wipers, indicators, headlights, tail lights and your park or hand brake all function properly.
- The odometer reading matches the ad and any safety certificate that’s provided.
3. Forgetting to have the car inspected by a mechanicIn most states, it’s up to the registered owner at the time of the sale to have a safety inspection report/roadworthy certificate completed in order to transfer registration. This is known differently between states; a Certificate of Inspection (COI) in QLD or a Pink Slip in NSW, for example. Regardless of what it’s called, you cannot rely on standard practice and just these standard certificates alone to provide you with peace of mind when it comes to the car’s mechanical safety. This makes even more sense if the car is being sold unregistered and doesn’t require a safety certificate. Mechanics can help identify:
- Oil Leaks.
- Uneven wear on tyres or belts which can indicate alignment issues.
- Overall health of the engine is in good condition.
- Fluid levels such as oil, power steering or coolant.
- Other damage to either the engine or body of the car that went unnoticed to your untrained eye.
4. Failing to run a vehicle history report
It’s easy to get caught up in the excitement of finding a new car for yourself, even if it’s not brand new; but buying a vehicle with a history does mean stopping to check the vehicle’s history. Particularly when it comes to private sellers, you cannot assume that every previous owner is going to give you the full story when it comes to the car you’re falling in love with.
The small price of a vehicle history report is nothing compared to what it might cost you if there’s not a clear title on the car, or if it’s been written off in the past. A Personal Property Securities Register (PPSR) Certificate only costs around $2.00 and replaced the previous REVs check that you may have heard of. Conducting a car search through the Personal Property Securities Register will tell you if the car you’re looking at buying has been written off, has money owing against it or has been stolen. You’ll need more than the number plate to run a search; a PPSR certificate needs the car’s engine number or vehicle identification number (VIN) to conduct the check.
Vehicles that are encumbered (have debt against them) mean a credit company (such as a loan company) hold that vehicle as security against someone’s loan. So if that person defaults on their loan, the company might come after the car to recover their losses, even if you now own the car!
5. Driving off without insurance or registration papers
Car insurance should be a no-brainer to make sure that you’re not putting your new purchase at risk! Make sure that you also have signed registration papers in hand, particularly if you’ve bought from a private seller. Even if the car is still in factory warranty, this won’t save you from a collision on your way home!
Some finance companies will provide you with car finance under certain conditions, one often being that your car is comprehensively insured before you drive it away.
How to buy a used car: dealership vs private sale
Whether you buy a used car from a dealer or are planning on buying privately, there are some pros and cons of buying used cars via either.
New cars aren’t the only option from a lot of dealerships, in fact, car dealers are often keen to offload their used cars to make way for more stock. So this can work in your favour when looking for a used car. Bear in mind, that once you sign a contract to purchase a car, it becomes legally binding. Buying from a dealer means that you are entitled to:
- A one business day cooling off period, if for whatever reason, you change your mind.
- A test drive of the car.
- A statutory warranty that ensures any vehicles the dealer sells have to be road worthy.
- Some level of protection under the office of fair trading.
Be sure to seek independent legal and financial advice on any contract before signing it, so that you understand all the terms and conditions fully before entering into any contract with a dealer.
Obtaining a vehicle through a private sale can mean more flexibility in terms of negotiating how much you pay, but doesn’t come with a cooling off period or a statutory warranty. However, it means that you can work more closely with the sellApply Nower — and they may even allow you to return the car if something goes wrong outside of one business day! But make sure you seek independent legal and financial advice on any agreement you make with a private seller before driving the car away so that you are fully aware of all your rights and obligations post-sale.
However you choose to buy a used car, know that Finance One want to help as much as possible and enjoy helping Aussies improve their lives through vehicle finance every day.
Disclaimer: The information above is of a general nature only and does not consider your personal objectives, financial situation or particular needs. You should consider seeking independent legal, financial, taxation or other advice to check how the information relates to your particular circumstances. We do not accept responsibility for any loss arising from the use of, or reliance on, the information. All new loan applications are subject to normal lending criteria. Fees and charges payable. Terms and conditions apply.