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Where to buy a car 

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 from a dealership 

Buying a vehicle from a licensed motor vehicle dealership provides many advantages. Unlike buying privately, 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.

Also, the dealer often allows you to trade in your old vehicle. However, you may get more if you sell it privately.

Unlike buying at auction, you can test drive the vehicle to make sure it has the power and features you require. Most licensed car dealers can also offer you finance or insurance but you don't have to accept it. Shop around and check out the rates offered by banks, credit unions and finance companies.

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Buying from an auction 

The benefit of buying a car at auction is that you could pick up a real bargain. The cars come from situations that include deceased estates and repossessed vehicles. Generally, you can’t take the car for a test drive, although you can arrange an independent vehicle inspection at your own cost but not on the day of the auction.

A car bought via auction will not be covered by a statutory warranty or consumer guarantees if the auctioneer is selling the car on behalf of the owner. If the car is owned by the auctioneer it will be covered by consumer guarantees.

For more information, visit the Consumer guarantees page on the Fair Trading website.

Auction houses are responsible for ensuring the cars they sell have no money owing on them. Most auction houses require a 10% deposit or $500 at the fall of the hammer.

Where motor vehicles are sold with number plates attached to private purchasers 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
  • be attached to the vehicle at the time it is offered or displayed for sale
  • be provided to the purchaser at the time of delivery of the vehicle.

However, a vehicle with number plates can still be sold at an auction without a pink slip under the following circumstances:

  • a Form 11 is displayed for the motor vehicle
  • a pink slip is provided to the buyer within seven days following the sale
  • the agreed purchase price of the motor vehicle does not change following the sale
  • the buyer does not pay any additional costs to get a valid pink slip for the vehicle.

The Form 11 must state that the vehicle is not subject to the dealer guarantees under the Motor Dealers and Repairers Act 2013 and displayed either on the vehicle, adjacent to the auctioneer or at each entrance to the auction. Consumer guarantees under the Australian Consumer Law may continue to apply depending on whether the vehicle sold at auction is owned by the dealer. 

Generally, it is good business practice for the Form 11 to be displayed when a vehicle is offered or displayed for sale at an auction, no matter the circumstances.

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Buying privately 

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. Also, making sure the vehicle does not have a secured interest such as the owner owing money on the car or not owning the car outright is the responsibility of the buyer. Doing a Personal Property Securities Register (PPSR) check will help you ascertain this. If you find out there is money owing on a car after you have bought it, you can seek court orders for compensation.

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.

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Buying from a market 

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 as there are no warranties. Markets are often temporary situations and have become an outlet for backyard operators to dispose of substandard vehicles, or even possibly stolen vehicles.

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Buying online 

When buying online you are either buying from a dealer or buying privately so follow the guidelines that apply to those purchases. When you purchase goods online from overseas or another state, NSW consumer protection laws may not apply and may only offer you limited protection. For more information on buying online visit our website.

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Consignment sale 

Under the Motor Dealers and Repairers Act 2013 (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 than 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.
  • have a trust account with a bank in NSW
  • keep 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 sale and 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.

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Something to avoid - roadside selling 

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.

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Registering the vehicle 

After you purchase the vehicle, you must transfer ownership of the vehicle to your name within 14 days online through the Roads and Maritime Services (RMS) website or at a registry or service centre.

If the vehicle is not registered you need to take it to an authorised inspection station. They will conduct a roadworthiness check and identify the vehicle for the purpose of registration for the RMS and provide you with a blue slip. To find your nearest authorised inspection station, call 1300 137 302 or visit the Find an inspection station page on the RMS website. You will also need a ‘green slip’ (Compulsory Third Insurance).  More information is available from the RMS Renew your registration web page, the RMS Customer Service line on 13 22 13 or from your local registry or service centre

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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 dealer guarantee, you have other legal fair trading rights.

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