There are a number of options available to you in terms of where you can buy a car or motor cycle. They each have their advantages and disadvantages.

Buying a vehicle from a licensed motor vehicle dealership is the safest way and provides many advantages. The dealer has an obligation to guarantee that there is no money owing on the vehicle. In certain conditions the dealer is also obliged by law to provide a warranty.

The dealer also provides the opportunity to trade in your old vehicle, therefore saving valuable time and unnecessary headaches. However, you may not get as much money trading-in your car as you would selling it privately.

You get to test drive the vehicle and make sure it has the power and features you require. Finance can also be obtained through most licensed dealers again saving time and headaches.

Top of page

Where motor vehicles are sold with number plates attached to private purchasers at auction they have to have a Safety Inspection report (pink slip) issued by an Authorised Inspection Station (AIS). The inspection report must be:

• not more than one month old at the time of auction
• state that the vehicle is fit for registration
• attached to the vehicle at the time it is offered or displayed for sale or
• provided to the purchaser at the time of delivery of the vehicle.

Therefore, when a vehicle (other than an exempted vehicle eg. commercial) is offered or displayed for sale at auction a Form 9 should be displayed. The Form 9 must state that the vehicle is not subject to the warranty provisions of the MDA and may be displayed on the vehicle or:

• in front or immediately adjacent to the point from which the auctioneer will conduct the auction, and at each entrance to the auction and
• at each entrance to which the vehicle is parked
• so that the wording of the notice is clearly visible to persons who are attending the auction.

Be very careful

Vehicles sold at auction may be cheaper, but they also present the most risks. The vehicle is not covered by a statutory warranty, and generally the auction house will not permit you to test drive it. However, they must allow a reasonable inspection.

Know the terms of purchase

Most auction houses require a down-payment of around 10 per cent or $500 at the fall of the hammer. Payment is usually in cash or by bank cheque.

Check the paperwork carefully

If there are number plates attached to the vehicle, you must be given a safety check report that is not more than one month old, that states that the vehicle is fit for registration. (If the vehicle has been registered within the last month, you do not need a safety check report.) At the time of purchase, you should be given a receipt and the completed transfer of registration forms. The auction house is also responsible for ensuring that no money is owing on the vehicle and no other party can claim a financial interest in it.

Register the vehicle

After you purchase the vehicle, you must visit a Motor Registry within 14 days to transfer ownership of the vehicle to your name.

If the vehicle is not registered, you will need a safety check report and a 'green slip' (Compulsory Third Party Insurance) before you can register it. More information is available from the RTA's Customer Service line on 13 2213 in Sydney and Wollongong or from your local Motor Registry.

Disputes

The Office of Fair Trading may be able to assist you if you can't settle a serious dispute with a licensed dealer. Even when there is no statutory warranty, you have other legal fair trading rights.

Top of page

Buying a vehicle privately involves relying on your own judgement and knowledge. You can arrange for a vehicle inspection at your own cost but there are no statutory warranties. Ensuring the vehicle is not encumbered, stolen or de-registered is the responsibility of the buyer. Doing a REVS check will help you ascertain this but a REVS check does not guarantee that the vehicle is not stolen or is registered. Always ask the seller for, and note down, the information listed below:

• the current certificate of registration
• a Pink Slip which is no more than 42 days old (unless the vehicle was registered in the last 42 days)
• proof that the person selling the vehicle is the owner eg. a sales receipt or driver's licence to help identify the seller
• the registration number
• the engine number
• the VIN (Vehicle Identification Number) or chassis number

Also ensure the information shown in the paperwork matches what is on the actual vehicle.

Top of page

Car markets bring buyers and sellers together in the one place without the need to drive all over town. However, you are still buying ‘privately’ and therefore need to rely on your own judgement and knowledge. There are no guarantees of title or warranties supplied. They are often temporary situations and have become an outlet for backyard operators to dispose of substandard vehicles, or even possibly stolen vehicles.

Top of page

Under the Motor Dealers Act 1974 (the Act), licensed dealers are permitted to sell vehicles on consignment. This is where the dealer is not the owner of the vehicle and the owners have left the vehicle with the dealer to sell on their behalf. This provides dealers with the opportunity to sell vehicles supplied by both the public (consignor) and other dealers at little cost to the dealer (consignee).

Dealers are still required to comply with the requirements of the Act in relation to the sale of these vehicles. This includes having prescribed notices attached to the vehicles, providing statutory warranty (vehicles less then 10 years and 160,000kms) or a certificate of roadworthiness for other vehicles not covered by warranty.

The dealer must:

• have consignment agreements between the two parties which includes:
  • name and address of both parties
  • description of vehicle
  • agreed price to be paid to consignor
  • details of any encumbrance
  • direction for disbursement of proceeds from sale
  • the period of the agreement.
• a trust account with a bank in NSW
• trust account audit records including
  • deposit book
  • receipt book
  • cashbook
• deposit the monies from the sale into the trust account, on the sale of the vehicle, within one day
• pay the consignor from the trust account the amount agreed in the consignment agreement, within 14 days
• make consumers aware of all charges in the consignment period.

Consumers should ensure:

• that they sign and receive a copy of the consignment agreement and are aware of any charges that the dealer may seek from them. For example, some dealers charge a fee for the consignment, may bill consumers for petrol or for repairs necessary to bring the vehicle to a condition for saleand may charge costs for detailing etc
• that their vehicle is covered by insurance whilst it is in the dealer’s care. Consumers own comprehensive insurance may not cover the vehicle if it is damaged on a test drive by a person unknown to the owner. Dealers normally provide an insurance cover, sometimes at a cost to the consumer
• that they are aware of what their vehicle is worth. Be realistic. Get trade in prices from other dealers, the Red Book and check current advertising. Do not be enticed by dealers who offer over-inflated sale prices in order to get your vehicle onto their lot
• that they do not leave the vehicle and wait for the dealer to ring. Visit the dealer’s premises and ensure that the dealer is actively trying to sell the vehicle and that it’s not sitting in a dark corner of the yard with no exposure to potential buyers
• that they take photos of the vehicle prior to the consignment and note the condition of tyres etc. If the vehicle is returned to the consumer at the end of the consignment period, carefully check the condition of the vehicle and bring any damage to the attention of the dealer.

Top of page

There are no safeguards with this type of car sale. There are no guarantees of title and no warranties supplied. You could be stuck with a vehicle that has been poorly repaired or even written-off. No matter how good the bargain looks, steer clear.

Top of page