How To Buy A Used Car – Part 2

Buy a Car Privately, From a Dealer or at Auction?

You know the makes/models that suit you best and their price range.

So now it is a matter of finding the matches for sale in your local area.

Irrespective of the seller.

Advantages of Buying From a Dealer

Buying from a dealer is heavily regulated in your favour and has definite advantages as follows:

Guaranteed Ownership

Buying a car with money owing on it (outstanding finance) is a big problem.

Licensed motor dealers are required by law to guarantee title eliminating this risk.

Cooling-Off Period

In most Australian states and territories (not all though – check with your state’s Office of Fair Trading, Consumer Affairs, or equivalent) you can change your mind within 1 business day of signing a purchase agreement for the loss of only a small deposit, at worst.


This is a huge advantage of buying through a dealer in your state.

Take Qld for example:

A car under ten years old and 160,000kms attracts a 3-month/5,000km warranty in your favour.

The dealer must repair any major faults in this period.

Office of Fair Trading Website – QLD

This cover can be quite expensive for a dealer so it is not in their best interest to knowingly sell you a lemon.

Reputable dealers have their vehicles pre-inspected.

Lemons, or those with too many niggles are wholesaled or sent to the auctions to be someone else’s problem.


It is a dealer’s job to show you their vehicles for sale when it suits you.

A customer-focused dealer may even bring the car to you for an inspection.

Dealers often specialise in a certain type of used car so may be able to show you similar makes/models in the one visit.

Code of Ethics

Reputable motor dealers are members of their state’s Motor Traders’ Association and are bound to their code of ethics.


Most motor dealers accept trade-ins.

Dealers are experts in these transactions and even if you owe money on your existing car, they can make a smooth swap for you.

You may however, with more effort, achieve a better sale price should you try and sell it privately.

Advantages of Buying Privately

Not a For-Profit Transaction

Dealers need to make a profit from each transaction, so there is little chance of paying significantly less than market rates.

You are more likely to find that rare bargain privately.

Dealers Are Better Negotiators

Dealers negotiate every day and are probably better at it than you are (if it isn’t something you do every day).

A private seller may not be a great negotiator either – to your advantage.

Buying at Auction

Beware! A motor auction is no place for amateurs.

Buying a car at an auction may cost you less than market rates, but you will get no warranty, no opportunity to test drive and no (or limited) prior inspection.