Used cars: How to avoid a lemon

It's understandable you might be feeling a bit nervous about buying a used car – no one wants to end up with a lemon, facing costly repairs and the inconvenience of being without a vehicle.

But there are ways to minimise risks and help ensure you’re getting value for money. Start by looking at which secondhand cars are worth the money, taking some key issues such as safety, vehicle history and fuel efficiency into consideration. There are several other issues to consider, too.

Do a thorough physical check

Never buy a car without thoroughly inspecting it first. You can perform these basic checks yourself:

• • Check for rust, dents and other damage
  • Look under the car for any signs of leaks
  • Check all the lights, indicators and brakes
  • Take it for a test drive and listen for any strange noises
  • Check the tyres for wear and tear
  • Make sure all the documents are in order (registration and proof of ownership).

Ask for the service logbook to see if the car has been regularly serviced. It's not uncommon for a logbook to be missing or incomplete in a secondhand car, however, so it may not be a deal-breaker. If the seller remembers where they had it serviced, you could contact the mechanic and ask for a history of the work they’ve performed on the vehicle.

For a more comprehensive check, organise a pre-purchase inspection. It is worth the extra money to help you avoid buying a lemon that looks good on the surface. This is particularly important if you are concerned about hidden damage, such as if the car has been in a flood.

 

 

Car inspection companies will send a qualified mechanic to inspect the car (or you can take it to your own mechanic). Then they will provide a report about its condition, which can give you peace of mind and help negotiate a better price if you still want the car but it needs a few things fixed.

Know where to buy

There are three main ways to buy a used car: from a used car yard, via private sale or at an auction. Each option has its own set of pros and cons.

If you're looking for the best selection of secondhand cars, then a used car yard is the best option, if you understand its golden rule. The biggest advantage of buying from a used car dealership is the statutory warranties. The downside is that you might have to pay more for the car than if you bought it privately.

Buying privately is often the cheapest option, as you're dealing directly with the owner of the vehicle. However, it's important to be aware that there is no cooling-off period and no warranties when buying privately unless, of course, it’s a manufacturer’s warranty.

Auctions can be a great place to find a bargain, but they are not without risk. If you're not experienced in bidding at auctions or you don't know much about cars, it's easy to get caught up in the moment and perhaps pay more than you intended.

 

 

Determine the car’s value

How do you know what a car is worth? That the seller hasn’t inflated it well beyond its actual value because they need the extra cash?

If you don’t know much about cars, it’s easy to get stung. Do the legwork first so that you can negotiate the best possible price for the car you decide you want.

There are a number of websites that allow you to search for used cars and compare prices, including Redbook, CarsGuide and Carsales.

Bear in mind that car dealers are running a business, so their mark-ups are likely to be much higher than a private seller. You need to weigh up the pros and cons of that price difference.

Know how to negotiate

Remember the seller wants to make a sale, so there may be some wiggle room on the asking price. Here are some tips:·

• • Be fair and reasonable — having checked the sites above, you know what the car is roughly worth so offer within that range
  • Don't lowball the seller — they will likely just walk away
  • Conversely, be prepared to walk away if the seller isn't willing to negotiate
  • Mention any defects or issues you've noticed with the car and see if the seller is willing to lower the price
  • If the seller is a dealer, ask what the trade-in will be on your old car
  • If buying from a dealer, ask if there are any extras (such as a free first service) to sweeten the deal.

 

 

Know your rights

If you have bought a secondhand car and it is still under the manufacturer’s warranty, you are entitled to repairs and replacements under Australian Consumer Law.

This is your hard-earned money and you are entitled to get what you paid for. If you are having any trouble with a used car dealer, please lodge your complaint with us and let us help you handle it.