Where to buy a car

There are a number of places you can buy a car or motorcycle. They each have their advantages and disadvantages. We’ve put together some information but it’s good to also do your own research.

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 also has to provide a warranty. Also, the dealer often allows you to trade in your old vehicle. Unlike buying at auction, you can test drive the vehicle to make sure it has the power and features you want. 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.

Buying from an auction

The benefit of buying a car at auction is that you can pick up a great bargain. 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 from auction is 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.

Go to the consumer guarantees page for more information.

Auction houses are responsible for making sure that the cars they sell have no money owing on them. Most auction houses require a 10 percent 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  current inspection report (pink slip) issued by an Authorised Inspection Station (AIS). The inspection report must:

  • not be more than 42 days old
  • 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.

A vehicle with number plates can still be sold at an auction without a current inspection report if:

  • a Form 11 is displayed for the motor vehicle
  • a current inspection report 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 inspection report (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’s 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.

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, you need to make sure the vehicle does not have a secured interest by completing a Personal Property Securities Register (PPSR) check. If you find out there is money owing on a car after you have bought it, you can get a court order for compensation.

Always ask the seller for, and note down, the information listed below:

  • the current certificate of registration
  • details of the vehicles service history and a copy of any recent inspection reports
  • 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.

Buying from a market

Car markets bring buyers and sellers together in the one place. When you buy from a market, you’re 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.

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 by online auction, NSW consumer protection laws may not apply. Go to the buying online page for more information.

Consignment sale

Licensed dealers can sell vehicles on consignment. This is where the dealer is not the owner of the vehicle and the owners have left the vehicle with them 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) and providing a current RMS inspection report.

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 money 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.

You should make sure:

  • that you sign and receive a copy of the consignment agreement and are aware of any charges that the dealer may ask
  • that your vehicle is covered by insurance whilst it is in the dealer’s care. Your own comprehensive insurance may not cover the vehicle if it’s damaged on a test drive by an unknown person. Dealers normally provide an insurance cover, sometimes at a cost
  • that you’re aware of what your 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 you 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 you 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.

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.

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, 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). Visit the RMS renew your registration page call the RMS Customer Service line on 13 22 13 or go to your local registry or service centre for more information.

Disputes

Fair Trading might be able to help if you can’t settle a serious dispute with a licensed dealer. Even when there is no dealer guarantee, the Australian Consumer Law may apply.

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