Private car sales vs dealerships

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What you need to know before buying a used car


On most car sale sites you can choose to search for cars from dealers or by private sale. Many car buyers believe they can get a better deal at a private car sale than through a dealer, however there is more to consider than just the sticker price. If you’re not extremely knowledgeable about cars, buying from a dealer might be a better option. Have a look at what you need to know when buying from a private seller versus a car dealer.

Private sales: prepare for the inspection

The car may look great from the exterior, but what’s happening under the bonnet? Some of the most critical (and expensive to repair) parts are not clearly visible unless you know what to look for. A private seller is not necessarily going to disclose or even be aware of all the potential issues with the car. Don’t know where the drive belt is, or what an oil leak might look like? Bring along someone who does.

When you go to an inspection, make sure you take notes about the repairs you think the car might need. Let the seller know that you are going to check the prices on these new parts and repairs, as that might help you in negotiating a lower price.

Safety and roadworthiness

Depending on your state or territory, cars older than 5 years need to be issued with what is known as either a safety or roadworthy certificate. The certificate indicates that the car has passed a minimum safety standard inspection that includes the operation of tyres, steering, brakes, suspension, lights, windscreen etc. It is not, however, a full mechanical inspection. If you are buying from a private seller, make sure you discuss the service history of the car and ask to see the logbook and roadworthy certificate. If possible have a mechanic check it out.

Warranties

When you buy a car through a licensed car dealer, the car will be covered by a statutory warranty which guarantees that certain defects found after purchase will be repaired free of charge within the warranty period. Dealerships may be able to offer additional warranties, which could be comforting if you are buying a used car.

If you buy from a private seller

  • Arrange for a mechanic to inspect the car and prepare a report
  • Test drive the car at fast and slow speeds
  • Ask to see the roadworthy or safety certificate and logbook
  • Call the PPSR to see if money is owed on the car or if it has been written off
  • Get a written receipt.

Benefits of buying from a used car dealership

  • You should receive a statutory warranty
  • A guaranteed title and comfort in knowing the car will be free of any encumbrances or money owning
  • You can trade in your old car at the same time
  • Financing options may be readily available (car loan, dealer financing etc.).

If you would like assistance in finding a new car, Macquarie offers a car sourcing service that can save you time and money.

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Car finance and sourcing services are provided by Macquarie Leasing Pty Ltd ABN 38 002 674 982 Australian Credit Licence No. 394925 (Macquarie Leasing). All applications are subject to the satisfaction of approval criteria. Terms, conditions, fees and charges apply.

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