Buying a used vehicle

Before you buy

Buying a car or other vehicle can be a big financial commitment. Shop smart by doing your research. Before you buy a used vehicle, think about:

what best suits your needs, lifestyle and budget
whether you want to buy a used vehicle through a private sale, online, auction or dealership. Each option has pros and cons
if you’re buying an electric vehicle, consider how and where you will charge the vehicle
the total costs involved in buying a used vehicle. This includes registration, insurance, maintenance or repairs and interest on any loan.

There are many ways you can buy a vehicle in NSW. You can learn more about where to buy a vehicle to help you decide what is best for you.

What is a motor vehicle?

Any vehicle which is constructed or adapted to carry passengers or goods over a public road is a motor vehicle. It does not matter whether it is registered or not.

‘Motor vehicle’ can refer to a car, motorcycle, scooter, truck, caravan or trailer.

Know your rights

There are guarantees under the Motor Dealers and Repairers Act 2013 (MDRA) and the Australian Consumer Law (ACL) to protect you when buying and selling used vehicles.

Dealer guarantees under the Motor Dealers and Repairers Act 2013

If you buy a used vehicle from a licensed motor dealer, in most cases you are entitled to a dealer guarantee under the Motor Dealers and Repairers Act. This means:

a guarantee that the vehicle is free from encumbrances and the buyer will have title of the vehicle
the motor dealer guarantees to cover defects that occur after purchase
access to compensation fund that covers loss in the event that the dealer does not meet their obligations and the loss cannot be recovered.

Dealer guarantees apply to:

used vehicles that are less than 10 years old and have travelled less than 160,000km, this also includes demonstration or 'demo' cars
used motorcycles that are less than 5 years old and travelled less than 30,000km

Learn more about dealer guarantees and warranties.

If you buy a vehicle from a private seller, you are not covered by the MDRA or Australian Consumer Law.

Consumer guarantees under Australian Consumer Law (ACL)

The ACL also offers protections for consumers buying vehicles from dealers. Most vehicles sold through motor dealerships are covered by consumer guarantees. This means they must:

be of acceptable quality (including that it is safe)
be fit for any purpose disclosed before the sale
match the description provided or demo model
have spare parts and repair facilities available
come with title possession and securities guarantee.

Consumer guarantees are your automatic rights under ACL. These cannot be restricted or excluded.

Learn more about consumer guarantees.

Used vehicle buyer's guide

Before you buy a used vehicle, there are some important steps for you to take.

1

You can shop for a used car through car sales platforms, online marketplaces or directly from a business such as a used car dealership.

'Demo' or demonstration cares are also classified as used cars. Often these are displayed in a showroom with new cars but are offered at a cheaper price because they have been driven before.

Be careful when shopping for a used car privately, particularly in online marketplaces that do not require user authentication. Scams are more common in online marketplaces where the seller is not verified. Use trusted car sales platforms instead.

2

Buying a used vehicle can cost much more than just the purchase price itself. Work out what you can afford to spend before beginning your search. You can use tools like the Moneysmart budget planner to help you.

On top of the cost of the used vehicle, you need to consider:

getting the registration changed to your name
insurance
maintenance
repairs
yearly registration fees
motor vehicle duty (also called stamp duty).

3

Before you financially commit to a used car purchase, check the vehicle registration online to make sure the odometer reading has not been tampered with.

A free registration check includes:

the registration expiry date
whether the registration is suspended or cancelled
any registration restrictions
any registration concessions (additional charges that might apply when transferred to a new owner)
the compulsory third party (CTP) insurance provider and policy expiry date
the past three odometer readings (if applicable).

You can also purchase a vehicle history report for a comprehensive overview of the vehicle. Compare this online data with the odometer reading of the vehicle, as well as the log book entries.

Learn more about protecting yourself from odometer tampering.

Check a vehicle registration

4

It’s important to know whether there is money owing on a used vehicle before buying it. If you buy a used vehicle with money owing, action could be taken to repossess it, even though the debt isn't yours.

The Personal Property Securities Register (PPSR) will tell you if there is money owing on the used vehicle or if the registered owner does not own the used vehicle outright.

You can conduct a PPSR enquiry online or by calling 1300 007 777.

5

Before buying a used vehicle, it's important to inspect the vehicle thoroughly. Inspections can help you identify problems and assess a used vehicle’s value more accurately. 

NSW Fair Trading recommends using a licensed mechanic to inspect any vehicle you may be thinking of purchasing. Consider engaging a licensed mechanic for a pre-purchase inspection.

You can verify a mechanic is licensed through the Verify NSW tool.

Bull bars and autogas

If you have purchased a car with a bull bar or autogas (also known as LPG) installed, check they are compliant and installed correctly.

Bull bars need to follow Australian Design Rules. Learn more about the guidelines and regulations for bull bars and accessories.

All autogas installations and repairs must be done by a trained, qualified and licensed person. Authorised autogas installers attach the warning labels to number plates. Autogas tanks must be inspected every 10 years. You can check the label/plate attached to the tank to see when the last inspection was. Read more about warning and safety labels.

If you have concerns about an autogas or bull bar installation or want to check the qualifications of an installer, contact NSW Fair Trading on 13 32 20.

6

By doing your research and inspecting the vehicle you'll have valuable information to negotiate the best price.

If an inspection shows that you may need to pay for certain repairs, have a conversation with the seller about adjusting the price to reflect that. 

7

Shop smart and read the contract of sale carefully before you sign. The contract of sale for a motor vehicle is a legally binding document. You should not sign a contract of sale until you have:

checked the vehicle history
inspected the vehicle
read and understand the contract.

If you change your mind later, you might not be able to get your money back.

Never sign a blank contract or one with any unfilled spaces. Make sure all the costs are clearly itemised in the contract.

Buying a car with a loan

If you’re getting a loan for your vehicle, make sure to read and understand the finance agreement. This should be included with the contract.

Make sure the agreement contains the information and terms you agreed to, including:

all fees and interest rates
repayment rates and due dates for payment
the total amount you will have paid at the end of the loan period
all insurance requirements.

Learn more about finance and contracts.

8

Cooling-off periods apply when you buy a car from a dealership and the dealership either:

arranges your loan for the car, or
supplies application forms for, or a referral to, a credit provider.

This is called a linked credit arrangement.

Under these arrangements you have a cooling-off period of one business day to change your mind about the purchase.

The cooling-off period starts when you sign the contract and usually ends at 5pm on the next business day. 

A 'Form 12', also called a cooling-off period notice, will form part of the contract if you enter into a dealer-financed arrangement. During this period, you can cancel the contract by giving a signed written notice to the dealer. You’ll have to pay the dealer $250, or two per cent of the purchase price, whichever is the lesser amount. 

You may also choose to waive your cooling-off period. 

9

When you sign a contract of sale with a licensed motor vehicle dealer, it’s common practice for them to take a holding deposit for the vehicle. The deposit amount may vary.

Be careful if a private seller requests a deposit prior to an inspection. This could be a sign of a potential scam.

Make sure you get a receipt for your deposit and any future payments. If you change your mind and break the contract, the seller may be entitled to keep the deposit and ask you to pay a cancellation fee.

10

Make sure the seller gives you (if available):

all keys including those for the ignition, glove box, boot and alarm
the service books, owner’s manual and logbook
instructions for working and deactivating any alarm
the location of the hidden ignition switch if there is one
radio security number.

If you are buying a vehicle from a licensed motor dealer, they should provide you with the following documents:

a motor dealer notice (Form 5-10)
an eSafety inspection report
a tax invoice.

You should also request copies of the contract of sale and the Personal Property Securities Register (PPSR) search certificate.

If you're inspecting a used car yourself, use our Vehicle inspections checklist to make sure you don't miss anything.

Everything you need to know when buying a used car
Read transcript

Protecting yourself from odometer tampering

Odometer tampering is illegal. It involves disconnecting, resetting or changing the display for the number of kilometres a motor vehicle has travelled.

NSW Fair Trading, Transport for NSW and NSW Police are committed to reducing odometer tampering. They regularly investigate and penalise individuals and organisations for this offence.

How to protect yourself from odometer tampering

Smarter data systems are being developed to help detect odometer tampering. There are also things you can do to protect yourself.

Buy from a licensed motor dealer. You can check a dealer is licensed on the NSW Fair Trading public register of licensed motor dealers.

Read the registration papers and compare the odometer reading on them with the vehicle’s odometer reading.

Inspect the publicly available odometer data. You can find the odometer readings by doing a free registration check or by purchasing a vehicle history report from Service NSW. Compare this data with the odometer reading on the vehicle to help you spot low mileage and other signs of odometer tampering.

Inspect the vehicle’s service logbooks and:

compare the odometer reading with the vehicle’s maintenance records
make sure the Vehicle Identification Number (VIN) and engine number match the logbook and manual
make sure the logbook is intact and the front-page/cover is not replaced or glued on
check the service stamps have the details of the service provider’s name, ABN, address, or telephone number
look for oil change and maintenance stickers and see if they are consistent with the odometer reading. These stickers can be found on windscreens, door frames, in the glove box or under the bonnet
check the numbers on the odometer are aligned correctly. If they are crooked, contain gaps or jiggle when you bang on the dash with your hand, this may be a sign of odometer tampering
look for scratches around the screws and fingerprints or dust on the inside of the glass covering the odometer display
do a Google search of the VIN to see if you can find previous online advertisements or auction records, including previous condition reports and odometer history
look at the wear and tear on the vehicle, especially the accelerator, brake, and clutch pedals to assess whether seem appropriate for the number of kilometres displayed on the odometer
seek an independent vehicle inspection to check for odometer discrepancies in the vehicle’s history.

If you suspect odometer tampering, you can report it online at Service NSW.

Penalties for odometer tampering

Under section 52 of the Motor Dealers and Repairers Act 2013 penalties for odometer tampering can include:

an infringement notice of $1,100 or
prosecution with a maximum penalty of $55,000 for each instance of odometer tampering.

Next steps once you've bought a used car

Before driving your vehicle, you will need to register it in your name and have compulsory third party (CTP) insurance.

In NSW, you generally need to pay motor vehicle duty (commonly known as stamp duty) when you are:

registering a new vehicle for the first time 
transferring a vehicle’s registration to another person 
registering an imported second-hand vehicle in NSW for the first time.

Transport for NSW collects the motor vehicle duty on behalf of Revenue NSW. You will pay motor vehicle duty on the market value of the vehicle or on the price you paid for the vehicle, whichever is higher. Motor vehicle duty is three per cent of the market value of the car, up to $44,999, then five per cent on the value over $45,000.

If you are purchasing a used electric vehicle, you may be eligible for an stamp duty exemption. Learn more about the stamp duty exemptions for EVs.

If your seller has a paper copy of their Certificate of Registration, ask them to complete and sign the form on the back. Then, ask the seller to submit a notice of disposal.

You can then transfer the registration online or at your nearest Service NSW Centre. You will need to provide:

proof of registration entitlement, for example, the paper certificate of registration for your vehicle, completed and signed on the back by the seller, or the receipt showing that you are the new owner
proof of your identity, for example, your driver’s licence
the transfer fee and stamp duty cost.

You have 14 days to transfer the registration into your name. After this time, you will be charged a late transfer fee. If you do not transfer the registration, Transport for NSW can cancel the registration and your vehicle will then be unregistered, meaning you won’t be able to drive it.

Remember the receipt is the only proof that you now own the vehicle. The Certificate of Registration shows only the person who takes responsibility for the vehicle, it does not prove ownership.

Learn more about registering your vehicle.

Before you can register your vehicle with Service NSW you must prove that you have a green slip, also called Compulsory Third Party (CTP) personal injury insurance. You can purchase a green slip from an insurer.

The green slip scheme covers the cost of injuries caused by your vehicle to:

you, if the accident occurred in NSW
anyone else, anywhere in Australia.

A green slip needs to be purchased every year, so it pays to shop around. You can use the green slip check to find the cheapest green slip provider in your area

You may also wish to get other types of insurance to cover the vehicle for theft or the cost of repairs if you are involved in an accident.

Read more about different types of car insurance.

What to do if things go wrong with your used vehicle purchase

Talk with the seller

If you have purchased a vehicle and are having issues, contact the dealer or business you purchased the vehicle from in the first instance.

For more information about handling your problem with the business, including sample complaint letter templates, see our Talk it over page.

Make a complaint

If you're unable to find a solution after contacting the business, you can lodge a complaint with Fair Trading.

When making a complaint, you should include:

details of the issues you are experiencing
copies of any correspondence that shows how you have tried to resolve the matter.

You can make a complaint:

online
by phone on 13 32 20.

Contact NSW Fair Trading

If you are unable to find the information you need, you can call us between 8:30am to 5pm on Monday to Friday. You can also make an enquiry online.