Things to Watch Out for When Buying a Used Car

You must verify the legal owner of the vehicle you are buying.

Licensed Motor Vehicle Dealers are required by law to guarantee clear title on the vehicles they sell. So if it turns out later that the car was owned by someone else, you are protected.

Watch out for the finance trap. You may "purchase" a car which was previously bought on hire purchase or conditional sale and which legally belongs to the finance company (until all the payments have been completed). So it does not have "Clear Title". If you buy a car under these conditions and there is outstanding finance on it, the lender can repossess it. Your only recourse is to sue whoever sold you the car through the courts - if you can find them.

There are some limited exceptions to this. If you were not aware that the car was subject to an outstanding credit agreement and bought it in good faith, you may be allowed to keep it. This does not apply to stolen cars or cars which are subject to a hire agreement. You must get professional legal advice on this.

Check with one of the organisations (contact details below) which keep databases of information about cars. They can tell you whether the vehicle you want is "clear". If you are buying from an auto dealer, ask whether this check has already been carried out.

To verify that the car in question has no encumbrances, contact your local Register of Unencumbered Vehicles (EVS) office. (In some states this system is known as the Vehicles Securities Register)

New South Wales

Victoria

Metro: 02 9633 6333

Metro: 13 1171

Country: 1800 424 988

Country: 1800 814 762

Queensland

Western Australia

07 3246 1599

1300 304024

South Australia

Tasmania

131 084

03 6233 5201

ARE THE KILOMETRES ON THE CLOCK GENUINE?

Low mileage is always a big selling point. But of course the odometer (mileage clock) can be turned back by unscrupulous sellers to reduce the number of kilometres shown. If the on-the-clock kilometres are low, but the car appears to have heavy usage wear and tear (such as on the edge of the seats) - the car could have been "clocked" or had a "haircut".

NOTE : Professional "clock-fixers" are crafty - often they attempt to further deceive you by changing the most obvious wear items, like pedal rubbers, steering wheels and gear-stick knobs, to hide the real age of the car. Another sign to look out for is when the numbers on the odometer don't line up correctly.

Try to find out about the history of the car.
Roadworthy certificates are mandatory but service documentation or log-books are valuable as they will show mileage readings taken by mechanics and verify the car has been well maintained.

The stated kilometre reading forms part of the "official" description of the car. Dodgy sellers sometimes try to protect themselves by covering up the odometer, or by issuing a disclaimer saying that the mileage 'may be wrong'. To be valid, such a disclaimer must be at least as noticeable as the kilometre reading and effectively brought to your attention.

If the opportunity arises, it may be worth the extra effort of contacting previous owners named on the registration certification to ask what the mileage was when they sold the car. You should obviously also ask what the vehicle was primarily used for, for example, short trips or regular motorway driving.

MECHANICAL CONDITION AND SAFETY

Carry out the vehicle inspection in daylight. ALWAYS take it for a test drive. Take someone you trust with you if you're not confident about assessing cars.

Make sure you wait until the engine is warm, then leave the car running and check whether the exhaust blows excess smoke . Check for oil leaks when you stop.

During the test drive, drive with the windows both 'up' and 'down' and listen carefully for unusual noises.

Front wheel drive cars: find a place where you can slowly turn on full lock in both directions. Clunking or unusual sounds may indicate problems with universal joints or drive couplings.

If a car has been in an accident, it may be unsafe. Sometimes, two damaged cars are welded together to create a new one. These are known as 'cut and shuts' and are almost certainly unsafe. If you suspect a car has been involved in an accident there are companies which can tell you, for a fee, whether a car is an insurance write-off.

STOLEN OR REBIRTHED CARS

If you buy a stolen car, the police can and may remove it from your possession and return it to the original owner, or the insurance company, if an insurance claim has been paid out. If this happens, you not entitled to any compensation, even though you bought the car in good faith.

While you can sue the seller for your losses, this often can be difficult if it was a private "sale", and the seller has disappeared. Worse still, if you bought the car using credit, you may still have to pay off the loan. This will depend on the type of loan agreement you signed.

It can be hard to tell whether a car is stolen. Its identity may have been changed or "rebirthed". For example, the identity number and number plate of a legitimate car may be transferred to a stolen one. Vehicle registration documents can be forged or obtained illegally by fraud.

But there are warning signs to look out for.

Warning Signs

Use this checklist to help you spot the signs of a stolen or rebirthed car.

Obviously ask to see the vehicle's registration papers. If the seller can't produce this document, be very suspicious. The excuse commonly offered is that the rego papers has been sent to the motor registration body for updating. This may possibly be true (for example, the seller may have changed address recently). But be cautious, as this means you can't actually check the car's ownership and identity details.

Ask the seller for proof of identity and address, such as a drivers licence, passport, recent gas or electricity bill. Check that the same name and address appears on the registration documents. All cars have three main identifying features:

the vehicle registration mark (the number plate)

the vehicle identification number (VIN) - this can be found on a metal VIN plate, usually in the engine compartment. As a security measure some cars have the VIN etched on their windows or lamps

the engine number

These are recorded on the registration certificate. Check the three types of numbers on the car are the same as those shown on the registration documents.

Check for signs that the identification numbers on the car have been tampered with. The engine number and VIN number may have been interfered with. Areas of glass may have been scratched off the windows, or stickers may cover up etching, which has been altered.

Another clue is whether the seller can show you the insurance policy for the car. If it is stolen, probably not.