Buying a used vehicle
There's a lot to consider when buying a used vehicle. Learn about what to do before you buy and your consumer rights if something goes wrong.
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Before you buy
Buying a car or other vehicle can be a big financial commitment. Doing the right research can save time and money. 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.
Know your rights
The buying and selling of used vehicles in NSW is governed by the Motor Dealers and Repairers Act 2013 (MDRA) and the Australian Consumer Law (ACL). Under each of these laws there are guarantees to protect you.
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 dealer guarantee includes:
a guarantee 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, and
a compensation fund to cover loss because the dealer did not meet its obligations and the loss cannot be recovered.
Dealer guarantees apply to the following vehicles:
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
You can learn more about dealer guarantees and warranties.
Consumer Guarantees under the Australian Consumer Law
The ACL also offers protections for consumers buying vehicles from dealers. Most vehicles sold through motor dealerships are covered by consumer guarantees that 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
title possession and securities guarantee
Consumer guarantees are your automatic rights under the ACL. These cannot be restricted or excluded.
Read more about consumer guarantees.
Used vehicle buyers guide
Before you buy a used vehicle, there are some important steps for you to take. NSW Fair Trading has created this video and information to help you buy a used vehicle.
A used vehicle also includes demo cars (demonstration cars). Often these are displayed in a showroom with new cars but are offered at a cheaper price because they have been driven before.
Set your budget
Buying a used vehicle can cost much more than just the purchase price itself.
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)
Check the ownership of the vehicle
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.
If you buy a used vehicle with money owing, action could be taken to repossess it, even though the debt is not yours.
You can conduct a PPSR enquiry online or by calling 1300 007 777.
Get a mechanical inspection
Before buying a used vehicle, it is 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. You can find a licensed mechanic in your area on Service NSW.
If you choose to inspect your own vehicle, you can learn more about the process and watch a vehicle inspections video for tips on what to look for.
Bullbars and autogas
If you have purchased a car with a bullbar or autogas (also known as LPG) installed, it's always best to check they are compliant and installed correctly.
Bullbars need to follow Australian Design Rules. You can read more about installing bullbars 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 over an autogas or bullbar installation or want to check the qualifications of an installer, contact NSW Fair Trading on 13 32 20.
Negotiate a deal
Research and inspections will give you valuable information to negotiate the best price. If an inspection shows that you may need to pay for certain repairs, then the seller should adjust the price to reflect that.
Finance and contracts
If you’re looking to get a loan for your vehicle, make sure to read through your finance agreement and you understand it.
Read any contract or finance agreement carefully and make sure that it contains and you understand:
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.
Read more about finance and contracts.
Cooling-off periods
Cooling-off periods apply when you buy a car from a dealership and the dealership:
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 a cooling-off period will give you 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.
Before signing a contract
The contract of sale for a motor vehicle is a legally binding document. It’s important that you make sure to read it properly and understand it before you sign.
If you find a car you want to buy, make sure you:
use the Personal Property Securities Register (PPSR) to check no one owes money on the car
inspect the vehicle and make sure that it is safe to drive
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
Forms and documents
If you are buying a vehicle from a licensed motor dealer, they should provide you with the following documents:
Motor dealer notice (Form 5-10)
eSafety inspection report
tax invoice
You should also request copies of the contract of sale and the PPSR.
Paying a deposit
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.
Make sure you get a receipt for this payment 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.
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Buying a Used Car in NSW
Before buying a used car in NSW, there are a number of things to consider.
Protecting yourself from odometer tampering
Odometer tampering is illegal. It involves the disconnection, resetting or changing of a motor vehicle’s display of the number of kilometres it 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 to help detect odometer tampering are being developed. You can also use the following tips to protect yourself:
- Buy from a motor dealer on the NSW Fair Trading public register of licensed motor dealers.
- Read the registration papers and compare the mileage on them with the vehicle’s odometer reading.
Inspect the publicly available odometer data. Up to three odometer readings for vehicle will be available. You can find the odometer readings while doing a free registration check and when you purchase a vehicle history report from Service NSW. You can compare this data with the odometer reading on the vehicle s 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
- ensure the Vehicle Identification Number (VIN) and engine number match the logbook and manual
- ensure 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. You can also 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 be sure they 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.
Before you drive away
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
location of the hidden ignition switch if there is one
radio security number.
Motor vehicle duty
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 Revenue NSW's behalf. 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. Stamp 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. Revenue NSW has more information about motor vehicle duty.
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.
Insurance and registration
Before driving your vehicle, you will need to register it in your name and have compulsory third party insurance (CTP).
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Registration
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 go to a Service NSW Centre and 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.
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Compulsory Third Party insurance (CTP)
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
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Insurance for your vehicle (optional)
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.
Vehicle inspection checklist
NSW Fair Trading has created a helpful video guide and checklist to help you learn what to look for when inspecting used vehicles.
Contact NSW Fair Trading
Online: Complaints and enquiries
Phone: 13 32 20 (Monday to Friday, 8:30am-5pm)
In-person: find a service centre