Who to buy a car from

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Consumer

There are a number of places where you can buy a vehicle. Each has advantages and disadvantages.

Buying from a dealer

Buying a vehicle from a licensed motor vehicle dealer is the safest way and provides some real advantages.

The dealer is obliged by law to guarantee that there is no money owing on the vehicle and depending on the type of vehicle, how old it is and how many kilometres it has done.

The dealer may be obliged by the law to provide a warranty.

You also have the opportunity to trade in your old vehicle. However, you may not get as much money trading-in your vehicle as you would selling it privately.

You are likely to get to test drive the vehicle and make sure it has the requirements and features you want. Finance is also usually offered through most licensed vehicle dealers.

Visit as many dealers as possible and satisfy yourself that you are getting the best deal.

Buying at an auction

You may pick up a good bargain by buying a vehicle at auction.

You may be able to negotiate a contract to buy the vehicle, or buy the vehicle on the 'fall of the hammer'.

In the event that an auction house will not allow a test drive, you should make a thorough inspection of the vehicle. Auctioneers have to have a dealers licence if they regularly sell vehicles, so be careful to check which vehicles have a warranty and those which do not.

Buying a vehicle privately

Buying a vehicle privately can be cheaper than buying from a dealer however it also offers less security.

As the vehicle will not be covered by a statutory warranty, it is a good idea to have it inspected prior to purchase. This will be at your own cost.

Furthermore, although the Australian Consumer Law provides guarantees as to clear title, undisturbed possession and undisclosed securities, you should still carry out a search of the Personal Property Securities Register (PPSR) to ensure that the vehicle is not stolen, does not have money owing on it or is not a write-off.

When inspecting the vehicle you should check the following information:

  • date and year of manufacture is the same as the date on the vehicle identification plate;
  • the number plate matches that stated on the licence papers;
  • the vehicle identification number or chassis number in the engine bay matches that stated on the licence registration papers;
  • the vehicle is licensed, and when the licence expires;
  • proof that the person selling the car is the owner, i.e. they have the vehicle licence papers, a sales receipt or driver's licence to help identify who they are.

Depending on the age of the vehicle, you may also be entitled to any remaining period of the manufacturer’s warranty, or any extended warranty that was purchased with the vehicle. Be sure to confirm whether any warranty remains on the vehicle and, if so, arrange with the seller to have it transferred where possible.  

Buying from a car market

A car market is a market offering second-hand vehicles for sale.

If you buy from a car market, you are considered to be buying 'privately' and therefore you need to beware of what you are intending to buy.

Similarly to buying privately, the Australian Consumer Law provides guarantees as to clear title, undisturbed possession and undisclosed securities but there is no statutory warranty. 

Reporting unlicensed dealing

Motor vehicle dealers, their yard managers, their salespersons and their dealer premises must be licensed by the Commissioner for Consumer Protection.

Licensed motor vehicle dealers must purchase or rent authorised premises, must undergo training, and possess a great deal of knowledge about the law before they can start operating their business.

As a result, establishing and running a dealer business can require a great deal of investment in time and money.

The advantage of this system for you is that dealer conduct is regulated and monitored. Dealers are required to give warranties on used cars and must market their products in a truthful and ethical manner.

By comparison, backyard dealers do not hold licences and consequently do not incur the cost of establishing and running a proper business and do not abide by the same laws regulating licensed dealers.

Backyard dealers buy and sell vehicles from residential or other non-business premises. They often have a well organised operation to obtain vehicles to resell. These vehicles are often bought as wrecks, repaired "on-the-cheap" and resold in private sales to unsuspecting consumers.

The backyard dealer avoids detection by not being licensed with the appropriate authorities for the payment of fees such as vehicle transfers, stamp duty and GST.

The unfair advantage gained by these people operating outside the law impacts directly on the car-buying public and affects the livelihood of licensed dealers. Consumers are left with little or no protection if something goes wrong with a car bought from a backyard dealer. The chance of a problem arising is increased, as the vehicles sold by unlicensed dealers are often subject to shoddy, sub-standard repair work.

You can often identify a backyard dealer by seeing the same private or mobile telephone number in the newspaper or the Quokka paper advertising different cars for sale, or by driving past a house which constantly has cars for sale on the front verge.

If you believe that unlicensed dealing is occurring, you can make a complaint to the Commissioner for Consumer Protection . A person convicted of unlicensed dealing now faces a maximum fine of $50,000.

Formal complaints can be address to:

  • Commissioner for Consumer Protection
    Locked Bag 14
    Cloisters Square
    PERTH WA 6850
  • Telephone: 1300 304 054
  • Fax: (08) 9282 4363
  • Email: automotive@dmirs.wa.gov.au

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