Purchase of used cars – private sale or dealer?

By Steven Hayles

Buying from private sellers
While the advantage of buying through a private sale may be the obvious lower purchase price, other
risks relating to the operation of the vehicle may not be so apparent.

Furthermore, while there is a requirement that all used car vehicles are sold with a safety certificate,
which verifies the road worthiness of a car, this certificate does not provide proof that the car is mechanically sound and will operate effectively.

When purchasing used cars through private sale, buyers should, in addition to taking the vehicle for a test drive, arrange for the vehicle to be inspected by a mechanic to verify the mechanical condition of the car.

Arranging for an independent report on the mechanical soundness of a used vehicle will help identify any
issues that a buyer should be aware of and will avoid instances where buyers are left with a “lemon”, which requires costly repairs that in some cases exceed the value of the vehicle.

After the completion of the sale of a used car, it can be very difficult to make a seller responsible for defects (other than those identified in the safety certificate) after the sale. This is usually because agreements are not entered into in writing and it is not particularly clear what was agreed
between the parties prior to the sale being completed.

Buying from licensed used car dealers
Motor vehicles sold through licensed used car dealers are covered by a statutory warranty.
The statutory warranty guarantees that the warrantor repairs certain defects discovered after buying the
car, free of charge during the warranty period. The statutory warranty, as provided by the Property
Agents and Motor Dealers Act, may be in addition to other warranties offered by the motor dealer.
The statutory warranty operates on the following basis:

• For used vehicles with an odometer reading under 160,000km and manufactured less than 10 years
before the sale date – three months or 5,000 km (whichever comes first)
• For used vehicles with an odometer reading above 160,000km or manufactured more than 10 years
before the sale date – one month or 1,000 km (whichever comes first).

The statutory warranty does not extend to defects relating to:
• tyres
• battery
• lights
• radiator hoses
• installed radios, tape and CD players
• air bags
• paintwork or upholstery that were obvious at the time of sale
• any problems caused by the buyer’s misuse or neglect eg.
allowing the engine to run out of oil or water
• the air conditioning unit in vehicles greater than 10 years old or more than 160,000km.
In the event that a defect is discovered after purchase and within the warranty period, written notice of
the defect should be provided to the motor dealer, who will within five days respond to the notice by either confirming repairs will take place or providing reasons why the defects are not their responsibility. In most cases an inspection carried out by an independent mechanic will be required to support the claim of a buyer.

When in the market for the purchase of a used car, customers should weigh up the potential benefits and risks of buying through either a private sale or from a licensed used car dealer.