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Purchasing cars from a private seller

Published on December 4th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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But what should you know before you buy? Here’s a guide to purchasing cars from a private seller. If you have a budget set and a shortlist of cars you have your heart set on, here’s ways to make sure you make the most of your buy.

First thing’s first: roadworthiness and safety

Any car without a roadworthy certificate isn’t worth your time. If your seller can’t produce a RWC, don’t buy it. Walk away! Your seller should show you all the logbooks and service history of the car, and better yet if the car has a recent safety check.

Make sure everything’s above board

Unlike dealer sales, when buying from a private seller you’re essentially in the wilderness. There aren’t any “cooling off periods” or consumer protections, as you’re making a transaction between yourself and another person, not a business. You should check that the sellers’ registration matches the VIN number and the engine number on the car. You must also check the Personal Property Security Register to make sure the car you intend to buy isn’t a write-off or has money owing on it.

A simple checklist to weed out the lemons

Sometimes, some cars are more trouble than they’re worth. Here are some simple tips to make sure you aren’t buying a lemon.

  • Check for discolouration or paint bubbles on the bodywork, as this can indicate rust or filler. To make sure, use a fridge magnet. Magnets don’t stick to filler!
  • Ill fitting panels or doors
  • Look at the oil dipstick – milky residue indicates problems
  • Check the coolant and radiator cooling fans
  • Look at the upholstery for signs of wear
  • Look under the carpet for signs of rust
  • Make sure the jack and toolkit is in the boot
  • Start the car with the bonnet open and listen for irregular or rattling noises – these mean trouble!

Your test drive

A private seller should accommodate a test drive at a time that suits both of you. This is a perfect way to figure out if the car is really for you. You’ll be able to tell if it handles well, is comfortable over bumps and other surfaces and if the engine feels smooth and doesn’t rattle. You can test the brakes and the steering, plus figure out if the visibility is good enough for you.

Arrange an independent inspection

If you’re keen on a privately sold car, you can arrange an independent inspection with one of your state or territory auto clubs. If the seller is reluctant, you know that’s a bad sign!

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Approval for car loans is always subject to our lender’s terms, conditions and qualification criteria. Lenders will undertake a credit check in line with responsible lending obligations to help determine whether you’re in a position to take on the loan you’re applying for.

The interest rate, comparison rate, fees and monthly repayments will depend on factors specific to your profile, such as your financial situation, as well others, such as the loan’s size and your chosen repayment term. Costs such as broker fees, redraw fees or early repayment fees, and cost savings such as fee waivers, aren’t included in the comparison rate but may influence the cost of the loan. Different terms, fees or other loan amounts may result in a different comparison rate.

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