Buying a car

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Buying your first car can be very exciting!  It’s the taste of freedom as you cruise along listening to your favourite music.  When you’re buying a car, it’s really important to do your homework so you don’t end up with a dud. This page outlines some important things you can do to make sure you get a good car that’s reliable.

To get started, check out this video about things to look out for when buying a car:

When can I buy a car?

In Victoria, you can’t buy a car from a dealer if you’re under 18, so it’s best to wait until you’re over 18.  While you can buy a car from a private individual, you should make sure you check it carefully – see our section below on ‘What should I look out for’.   

Going for a Test Drive

It is always a good idea to test-drive a vehicle before you buy it.  Some dealers won’t let you test drive a car if you’re under 25, so it’s good to check with them.  If they do let you drive it, make sure you understand any agreement you sign. For example, many car dealerships will make you agree to pay for any damage that you cause while test-driving a car.

I’m thinking of buying a second-hand car – what should I look out for?

There are four things you should always do before you buy a second-hand or used car:

1. Ask the right questions: make sure that you ask for as much information about the car as possible.  It’s a good idea to take a look at all the logbooks (these show when the car was serviced). This is useful if you want to see that the previous owner has taken good and proper care of it. It’s also a good idea to ask if the car has been in any accidents. If you have a friend or parent who is really good with cars, let them come with you to take a look at it.  Remember, two sets of eyes are always better than one.
2. Get it inspected by a reliable, independent mechanic or vehicle inspector.  An inspector can come to you at the owner’s house to look at the car. To find a service which can do this, search the internet for “used car vehicle inspection service”.
3. Do a PPSR check to see if there is any finance owing on the car: https://transact.ppsr.gov.au/ppsr/QuickVINSearch
4. Do a registration check to see if the car is registered: https://vre.vicroads.vic.gov.au/
   

When you buy a used car, you don’t know if the previous owner still owes money on it.  The law is very complicated and in some cases you could be caught up paying off someone else’s debt, even though you paid for the car yourself! The way to avoid this is to do a check on the PPSR register.  This is a website where you put in the engine number and the system tells you if there is any money owing on the car. If there is, DON’T BUY IT. If the car has no money owing on it then you can get a PPSR certificate saying that the car is unencumbered.

You are only protected if you do a search on the day you buy the car or up to one day before.

Always remember to:

• Ask for a receipt – this is really important in case something goes wrong – make sure they include:
• both your names
• the amount you paid
• the car engine details
• the owner’s full name, address and mobile phone number.

It’s also a good idea to get the owner to show you the registration papers and check that this matches his or her licence.

What if I’ve bought a car but have changed my mind – can I return it and get my money back?

If you purchase a vehicle from a dealer, you will probably have to sign a contract. This means there is a legal agreement between you and the dealer.   It is very important that you read the contract carefully before you sign it. If there is anything you do not understand or feel is unfair, you should get legal advice.  Whatever you do, don’t sign something you don’t understand!!! Once you sign a contract, it is very difficult to undo it! If you are under 18 and sign a contact, in most instances you will be bound by it.

If you get a used car from a car dealership, you may be entitled to a “cooling off” period.  This gives you time to change your mind if you decide the car is too expensive for you or you don’t like it. The cooling off period in Victoria is three clear business days.  

The three business days do not include the weekend or any public holidays. If you are still within the cooling off period, you should contact the dealer immediately. You will need to give the dealer a written notice if you want to give the car back and get your money back  

What if I want to get a loan to buy a car?

If you buy a vehicle from a dealership, the dealer may offer to arrange a loan for you (this is sometimes called ‘finance’).  This means they will sell you the car and you will also pay the car off through them. Although this might seem very attractive, getting a loan through a dealership is often more expensive than other options (such as a loan from a bank or credit union).  That’s why it’s a good idea to shop around to get finance.

Also, check out this video on things to look out for when getting a car loan: https://www.youtube.com/watch?t=191&v=ZsO8Wdlk0FE

It is against the law for a dealer to put pressure on you to use their finance instead of going somewhere else, like a bank.  If this happens, you should contact the Consumer Affairs Victoria on 1300 55 81 81or the Australian Competition and Consumer Commission on 1300 302 502.

To find out some important tips about budgeting for a car loan check out the ASIC MoneySmart website at: https://www.moneysmart.gov.au/borrowing-and-credit/car-loans 

Someone won’t sell me a car because of my age, race or gender – what can I do?

A car dealer should not refuse to sell you a car just because you are under 18. This is called age discrimination and is against the law. It’s also against the law if a car dealer refuses to sell you a car because of your race, gender, sexuality, disability, marital status or pregnancy, or if the car dealer sexually harasses you while you are looking to buy a car.

If you are under 25 and this has happened to you, you can get advice and help here. If you are over 25, please contact Legal Aid NSW on 1300 888 529.

I bought a second hand car from a dealer and there are problems - what can I do?

If you buy a car from a dealer, they usually have to give you a warranty for a certain period of time. A warranty means they will agree to repair any defects in the car so that it is in a reasonable condition. The warranty period only applies in certain situations:

• If you buy a new car: you will get a warranty for a certain amount of time from the maker.  Also, whatever the warranty says, the law says a car has to be of acceptable quality – which means it is safe, durable and free from problems unless you are told about it.
• If you buy a second hand car which hasn’t been driven more than 160,000km and is less than 10 years old: the dealer has to repair any major problem that happens within 3 months after you got it or you driving 5,000 kilometres in it, whichever happens first. If the dealer refuses to do this, you may be able to claim compensation from the Motor Car Traders’ Fund.
• If your car is older than 10 years and has been driven for more than 160,000 kilometres: there is no warranty, so watch out!

There are some things that warranties don’t cover.  This includes:

• Defects in tyres and batteries;
• Things which happen as a result of accidents or your misuse of the car;
• Defects on second hand cars which are covered by a defect notice.

I bought a used car privately and there are problems – what can I do?

If you’ve bought a used car from an individual (not a dealer), you don’t have the same protections in terms of warranties. If there are problems, it’s really important that you speak to a lawyer and get advice about it as soon as possible. If someone has lied to you about the condition of the car, you may be able to take legal action against them. If you are under 25 and you need advice, you can get free information and advice here.  If you are over 25, please contact Victoria Legal Aid on 1300 792 387.

I’ve bought a car – what do I need to do now? Do I need insurance?

Before you drive a car, you have to make sure it’s registered.  After you have bought a car, you have 14 days to get it registered or (if it is a second hand car) to transfer the registration into your name.   You can register a car or transfer registration by going to https://www.vicroads.vic.gov.au/registration/buy-sell-or-transfer-a-vehicle

It’s also important to make sure you have insurance on your car.  This will cover you in case you damage someone else’s car while you’re driving, for example in an accident.  For more information on getting insurance, check out our insurance page.

If you’re under 25 and you have a question about buying a car that we haven’t answered here, please ask us a question here and we can give you some free information and advice.