Buying a Used Car Privately

Deciding to buy a used car is a big decision.

You may find that it can be cheaper if you decide to buy a used car privately (directly from the previous owner) as opposed to from a licensed motor vehicle dealer.  Buying a used car privately can however involve greater risk for a buyer.

This is because when you purchase a vehicle privately from a previous owner:-

• you are not entitled to the 1 business day statutory cooling-off period that applies to purchases of motor vehicles from licensed motor vehicle dealers.
• you will not get a statutory warranty (which covers vehicles sold by licensed motor dealers that have less than 160,000 km on the odometer or were manufactured less than 10 years before the sale date).
• the seller does not have to give you a Personal Property Securities Register (PPSR) certificate or a clear title guarantee.

In light of these risks, before you start negotiations on the purchase of a used car from a previous owner, it is important that you ensure that you are able to answer the following questions:-

1.  Does the used car belong to the person selling it?

If you buy the vehicle you may wish to sight the person’s licence to ensure they are the registered operator of the vehicle.  The current registration certificate or vehicle registration notice will show the registered operator.

2.  Is the used car what the person says it is?

You should check the number plate, construction date, vehicle identification number and engine number on the registration certificate all match the vehicle exactly—you can match this against the vehicle’s VIN plate.

3.  Is the used car safe?

Before a vehicle is offered for sale, the owner must obtain a current safety certificate from an approved inspection station.  If requested, the seller must produce the certificate to you so that you can ensure it is valid.  The safety certificate could be a printed copy, or via an electronic method like a smartphone, tablet or computer.  You should ensure that the safety certificate has not expired or exceeded the 2,000km allowed or 2 months (whichever comes first) before a new certificate is needed for a private sale.

4.  Is there any unpaid debt attached to the vehicle?

A Personal Property Securities Register certificate tells you if the vehicle that you are thinking of buying has:-

• any outstanding debt attached to it
• the details of the vehicle if it has been written-off
• been stolen.

A vehicle can get debt attached to it if a bank gave a loan to the seller—to help them pay for the vehicle when they first bought it—and they have not fully repaid the loan at the time of sale.  If this happens, it means that, by law the bank can take back the vehicle if the seller cannot finish paying off their loan—even if you purchased it.

When you buy a used vehicle privately, there is no guarantee that the vehicle is clear title.  The seller does not have to give you a PPSR certificate.

You should look up the vehicle and view the PPSR certificate before you buy it.  If the certificate shows any outstanding debts, make sure the previous owner clears the debt before you pay them.

Our office can assist with advice regarding issues that may arise with the purchase of used motor vehicles.  Our office can also assist with conducting searches of the PPSR.

Should you need advice on the law regarding these issues or assistance to conduct a search of the PPSR, please contact our office.