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Buying from a Licensed Auto Dealer
The safest way of buying a used car, with the maximum protection of the law.
In most States and Territories, Licensed Motor Vehicle Dealers are required by law to give statutory warranties on used vehicles. These vary in generosity depending on the price asked. There are also severe penalties, including fines, deregistration and even prison, for dealers who purposely mislead customers.
Nevertheless, there are still plenty of dodgy fly-by-night second hand car dealers, so choose an established firm with a good reputation. You can find your nearest reputable dealer in our Dealer Directory.
A sign featuring a trade association's logo may mean that the dealer follows a written code of practice. Your local Motor Trades Association can tell you which local dealers subscribe to a code of practice supported by your State or Territory¹s Office of Fair Trading. Some car yards advertise that their vehicles have been part-inspected by a State motoring organisation, (e.g. the NRMA, or State RAC organisation).
You can ask to see the written report on any car you are considering buying. However, it will not be as detailed as one you pay for yourself, but at least will provide some useful information. Or if possible choose a dealer with a quality-checking scheme.
When purchasing a vehicle from a second-hand dealer, the law says that a car must be:
- Of satisfactory quality
It must meet the standard that a reasonable person would regard as acceptable, bearing in mind the way it was described, how much it cost and any other relevant circumstances. This covers for example, the appearance and finish of the car, its safety and its durability. The car must be free from defects, except those specifically pointed out to you by the seller.
- Reasonable for any normal purpose
It should get you from A to B and should be suitable for any other purpose that you specify to the seller, for example, towing a boat or caravan, or in the case of a four wheel drive, going off-road.
- As described
A car said to have "one careful grandma owner" shouldn't turn out to have three previous owners, all tattooed males under 22.
These rights are not affected by any mechanical breakdown insurance (often sold by dealers if the manufacturer's warranty has run out), guarantee or warranty giving additional protection.
NOTE: A car dealer is not liable for any faults that an independent inspection should have uncovered. It's a very good idea to get a description of the vehicle's condition from the dealer. Ask whether there is a pre-inspection checklist.
- Check the car's documentation. This should include the car's vehicle identification number (VIN). The VIN in the documents should be the same as that on the vehicle compliance plate in the engine bay. The car should also have a roadworthy certificate, and a registration certificate showing details of the previous owner.
- Clarify the details of the warranty. These are laid down by legislation and vary according to the value and age of the car. Full details of those applying in your state can be found on the websites of the various Offices of Fair Trading or their equivalent. These are listed below:
- Inspect the vehicle. A checklist of things to look for can be found at some of the websites listed above.
- Arrange a comprehensive mechanical check.
- Test-drive the car.
- Read the contract of sale carefully. If there is something you don't understand, don't sign it!
If you have bought from a licensed second hand car dealer, they are obliged by law to stand by that roadworthy certificate for 30 days.
Licensed auto dealers are also required to guarantee that
- no money is owing on the car,
- it has not been deregistered due to parking fines or previously declared a wreck.
If a car turns out to be a stolen vehicle, the full purchase price must be refunded by the dealer or, if no longer trading, the Motor Dealer Compensation Fund.
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