Buying a vehicle

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ConsumerMotor industry

It is important that you consider a range of issues and do a number of checks before you buy a vehicle. Buying a car is a big investment for most people. Make sure you do your homework before doing the deal, regardless of whether it is through a private seller or with a car yard.

It is worth your while to read the information in the publication "Buying a Car - a buyers checklist". It gives you a comprehensive overview of what to look out for when buying a vehicle, whether new or used.

Legal Aid WA has produced a new guide for "Legal information about buying a car". The guide contains essential information regarding your legal rights and responsibilities, as well as information regarding loans and repayments, and warranties and guarantees.

Getting the best price

Do as much research and inspect as many vehicles as you can. You can research prices in the local newspaper or on the internet. This will give you valuable information to negotiate the best price.

If an inspection reveals that certain repairs are required, you may be able to negotiate a reduction in the price.

If you need to obtain a loan to buy the vehicle, again it would be a good idea to shop around. Many motor vehicle dealers offer finance, but you may get a better deal from your own bank or credit provider.

Buying from a licensed dealer

If you buy a vehicle from a licensed dealer, the vehicle is guaranteed to be "encumbrance free", ie. there is no money owing on it. (see Personal Property Securities Register (PPSR))

Before you sign the contract

A contract is a legally binding promise or agreement that is made between two or more people.

Licensed motor vehicle dealers are required by law to enter into written contracts when they sell vehicles. The contract contains prescribed terms and conditions.

Before signing a contract you should:

  • Read the whole contract very carefully, including the fine print;
  • Not rush into signing anything on the spot;
  • Seek legal or other advice if you don't understand any part of it;
  • Check that all figures and any other information inserted into the contract are correct;
  • Check that all verbal promises or claims made by the salesperson are written into the contract;
  • If you want to have the vehicle inspected, write on the contract "Purchase is subject to an inspection by (your nominated inspector) and purchaser’s satisfaction with the inspection report".

Remember there is no cooling off period for buying vehicles in Western Australia.

Before you drive away

Make sure the seller/dealer gives you:

  • all keys including those for the ignition, glove box, boot and alarm;
  • the service books, owner’s manual and log book;
  • instructions for working and de-activating any alarm;
  • radio security number (if it has one).

Don't forget to arrange insurance before you drive out of the car yard.

Stamp duty

The Office of State Revenue levies stamp duty when a vehicle is licensed or its licence is transferred to a new name.

The Department of Transport, Licensing Services collects the stamp duty on the Office of State Revenue's behalf. You will pay stamp duty on the market value of the vehicle or on the price you paid for the vehicle, whichever is higher.

Checklist

Check the following key steps when buying a car:

  • Your budget
  • Have a vehicle inspection done
  • Do a PPS check
  • Negotiate the price
  • Check vehicle licence papers
  • Arrange vehicle licensing
  • Pay the stamp duty
  • Arrange insurance
  • Organise finance
  • Check the contract before signing.

MoneySmart Cars app

The Australian Securities & Investment Commission's MoneySmart team have developed an app to help car buyers become more aware of the real costs of buying a car while giving tips on common traps. 

The app helps you:

  • Save money by giving you the real cost of your car purchase
  • Avoid common car buying traps and identify hidden costs
  • Find alternate ways to finance a car

Visit the MoneySmart Cars App page for links to download your app today. 

Watch Craig Lowndes explain some of the features of the new app.

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