Avoid a lemon and love that car for miles into the future!

Buying a car can be stressful - after all it’s a big financial and emotional decision. When it’s time to buy a car, you might consider purchasing a used one.

You might have heard that due to the pandemic there has been a shortage of new cars available. In turn, this has made used cars a more popular option for buyers, with second-hand vehicle prices jumping to 35% more than they were before the pandemic.

Plus, buying a used car doesn’t always mean buying an old car - there are plenty of used cars on the market that are less than five years old.

In this article, we’ll explain what used car buyers should be aware of to help you avoid a lemon and find a car that’ll take you miles into the future.

How to go about buying a used car

Whether you’re buying a new car or a used one, doing your research first is essential. Take the time to explore your options and figure out what model suits your needs and financial situation.

For example, a family might prefer an SUV, while a single person might opt for a hatchback. Or if you’re someone that gets in a lot of kilometers, it might be worth considering a fuel efficient or hybrid car.

Cars can depreciate in value quickly, so if money is tight it may make more sense to opt for a practical, affordable car, rather than a flashy one. It’s important to research what a reasonable asking price is for the model of car you are after.

Be sure to compare with similar private and dealership listings to get a good idea of what the car is worth. Hot tip: having this information handy could also help you when negotiating a price with a private seller or dealer.

Be sure to read reviews on your dream car for additional insights. This is important if you are taking a click and collect approach in choosing a car due to lockdown, or are confident with the manufacturer and warranty terms.

You can buy from a used car dealership which allows you to view and compare a range of vehicles in one place. Alternatively, you might find your dream car from a private sales listing. Whichever route you choose, make sure you test drive the car and ask plenty of questions.

When you’re looking at used cars online, the photos may be different (or more flattering) compared to real life. So, be skeptical and don’t get your hopes up too much. Be prepared to keep searching if you check out a car and it isn’t quite what you need or expected.

Here are some quick tips for buying a used car:

• Bring along a sensible and knowledgeable friend or family member to get a second perspective. They may spot things you don’t, or can help you navigate the negotiation and buying process.
• Find out the fuel efficiency and how fuel prices will impact your finances. You can find out more about the car’s emissions rating using the Green Vehicle Guide.
• Understand that used car values have increased roughly 35% this year, and access to new vehicles are still affected by global shortages and shipping delays. Since there are delays on new car purchases, many people are looking at used vehicles. This increased demand naturally increases prices.

Buying a used car from a private seller

Purchasing a used car through a private seller is very common, and it can be cheaper than buying from a dealer. Private sales are often advertised through car sales websites, social media, and car markets.

However, there are some risks involved that may not come up when buying from a used car dealership. Here are some questions to consider before you commit to buying from a private seller:

1. Is the car registered and does it have a current certificate of roadworthiness? How much time is left on the registration?
2. Has it been involved in a crash, or is it hail damaged?
3. Is the seller’s drivers license the same as the vehicle owner?
4. Is the vehicle still under its 3 or 5 year manufacturer warranty? (N.B. some makes now offer up to 7 years warranty).
5. Is there money owing on the vehicle? You can check the Personal Property Securities Register (PPSR) for a nominal fee for private sales. If you’re purchasing through a used car dealer they are legally obligated to do this for you.

It’s also a good idea to watch out for ‘clunk’ noises when changing gears, smoke from the exhaust, a warning light on the dashboard, wear on the tyres, steering pulling to either side, leaking fluids and any rattling or other body noises when driving.

If you’re not a car expert, don’t worry. You can get an independent vehicle inspection through the motoring body in your state. There are often specialist inspectors for different manufacturers, for example those that specialise in German manufacturers.

If you take out a loan through Aussie, we will arrange the inspection and check the PPSR on your behalf.

Ultimately, you don’t want to sign until you are fully comfortable with the purchase. Don’t be afraid to ask the seller questions about the vehicle’s history. If you still have hesitations after asking questions and getting a formal inspection, you may want to move on. Even though used cars are less expensive than new ones, it’s still a major financial decision.

Buying a used car from a dealership

Buying from a used car dealer can come with a number of advantages when compared to buying from a private seller. To start with, you can look at a range of used cars all in one place. This can make your search more efficient, and you’ll often find that staff can clearly explain the car specs. Other advantages can include:

• Warranties on your purchase, but check which parts of the vehicle are covered and which aren’t.
• They can guarantee that there is no debt associated with the car.
• Many dealers will offer a trade-in on your existing vehicle.

On the downside, buying from a dealer can be more expensive. The dealer will want to make a profit somewhere, either with a lower trade-in value or higher cost for the vehicle you are buying.

It’s also important to note that the states and territories regulate used car sales differently. For example, some states offer cooling-off periods after the purchase agreement has been signed, while others don’t.

Even though buying through a used car dealer may be a more professional, streamlined process than buying through a private seller, it’s still smart to get an inspection. If you take out a loan through Aussie, we will arrange the inspection and check the PPSR on your behalf.

Don’t forget to look up reviews on the dealership to find out if they have a good track record of honesty, customer service and high-quality sales.

Buying a used car vs. a new car

There are many pros and cons to consider when buying a used or new car. Here is a brief comparison to help you make a decision.

Buying a used car

• New cars are expensive, and you can save a lot of money by buying second-hand.
• Cars depreciate in value very quickly, so it can sometimes be a smarter financial decision to opt for a newer used car than a brand new one.
• Buyers may find that there is more room to negotiate price with used car sales.
• No need to wait for the car to be imported from overseas.
• If the used car is newer, it may still have years of remaining warranty on it.
• You won’t always know the full history of the vehicle which could result in issues down the track.

Buying a new car

• New cars are clean, fresh and typically come with the latest features.
• Purchasing a new car is easy and you don’t have to worry about getting inspections and the other hassles associated with used cars.
• You can be pickier with the colour, exact model and various specifications.
• New cars usually come with between 3 and 7 years’ warranty.
• Car insurance is usually less expensive for new purchases.
• New cars are often more fuel efficient and eco-friendly compared to older ones.

Can you get a car loan for a used car?

Yes, car loans are available for used cars, whether bought from a dealer or privately. It’s a common misconception that car loans are only available for new cars.

Used cars may be cheaper than new ones, but they can still put a big dent in your wallet, so getting a loan can help.

A used car loan is much the same as a regular car loan or personal loan.

You borrow money to purchase a vehicle and repay it over a set period of time, with interest added. Interest rates for car loans are typically higher than home loan interest rates. 

For used car loans, lenders may have stipulations on the age of the car and loan amount. Aussie can help you find a suitable car loan for your next used car purchase. Get in touch today to learn more. 

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