Things to check when buying a second-hand car

There’s plenty to love about a used car!

They can be very budget-friendly, you won’t wear a massive depreciation hit and a pre-loved car can cost less to insure. 

But take a good look under the hood to be sure you’re not buying someone else’s problem. 

Lucky for you, our used car checklist explains what to look for! Read on to find out more about what’s required when buying a second-hand car. Or to skip ahead, download and print out our used car checklist PDF.

How to buy a used car and where to buy it from

When it comes to second-hand vehicles, car buyers have three main choices:

  1. Buying your used car from a dealership

  2. Buying your used car privately

  3. Buying your used car at auction

Let’s compare the pros and cons of each of these options to help you decide which is right for you...

1. Pros and cons of buying a used car from a dealership 

Dealers – a car yard offers a whole range of vehicles all in one spot, and you will be covered by a statutory warranty specific to the state or territory in which you are purchasing. The downside is that you’re likely to pay more for your car... After all, car yards are in business to make a profit.

Advantages Disadvantages

Lots of different used cars for sale – all in one location.

A dealer’s mark-up means you’re likely to pay more than with a private sale.

You’ll likely be covered by a statutory warranty, just be sure to check your state’s limits on how many kilometres are on the clock and the car’s cost.

Buyers need to be on their guard against high pressure sales tactics.

The dealer may offer a trade-in for your current car, so you won’t have the hassle of selling privately. 

You’re likely to get much less for a trade-in than if you sell a car privately.

You won’t have to arrange an appointment – just head to the car yard during opening hours.

A dealer may try to convince you to buy add-ons that offer little value like tyre and rim insurance.

2. Pros and cons of buying a used car privately

Private sale – buying a car privately may give you more room to negotiate on price, but you won’t get the protection of a warranty. If the exhaust falls off after you’ve sealed the deal, it’s your problem, not the seller’s.  And don’t forget about the all-important background check on the car, it costs just $2 to check the Personal Properties Securities Register (formerly REVS Check). It’ll tell you if the car is stolen, has been written off or if there are any security interests registered over the vehicle. It makes the $2 outlay for a PPSR a good investment!

Advantages Disadvantages

The car is likely to be cheaper than through a dealer.

The car likely won’t have as thorough of a check for any potential faults or problems.

You’re likely to face far less pressure to buy the car.

The car won’t be covered by a dealer’s warranty.

You can speak directly with the car’s owner to learn about the service history of the vehicle.

You don’t know who you’re dealing with. This makes it essential to check the Personal Properties Securities Register to be sure the car isn’t stolen, hasn’t previously been written off, and doesn’t have money owing on it.

The seller may be open to negotiating on price.

You’ll put in a lot more work in organising the sale paperwork and transferring the car’s rego into your name.

3. Advantages and disadvantages of buying from a used car at auction

Car auctions – an auction can be an opportunity to pick up a bargain though it’s definitely a case of buyer beware. Chances are you won’t be able to take a test drive, and it can be a dice roll to know if you’re bidding on a lemon.

Advantages Disadvantages

Auctions can be a chance to grab a bargain-priced car.

You could get caught up in a bidding war and pay more than the car is worth.

Plenty of makes and models all in one place.

The cars listed for sale can usually only be inspected from the outside. You won’t normally be able to take a test drive.

The title of the car is guaranteed.

You’ll need to pay a deposit on the day of the auction, usually 10% or $500-$1,000, with the balance often payable the following day.

When you’ve found a car you like

When a car catches your eye (for all the right reasons), it’s time to run a series of checks. 

Don’t be swayed by the fluffy dice dangling from the mirror or the lush sheepskin seat covers.

Follow our checklist to buy with confidence.

Check all of the documents

Documents check – ask to see the car’s rego papers. Compare the vehicle identification number (VIN) on the paperwork with the VIN on the engine – it needs to be a perfect match. 

Service history and logbooks

Service history check – read through the logbook. It will show how well the car has been maintained. Ideally, a car should be serviced every 10,000-15,000 km or every six months.

How to verify a vehicle’s odometer reading

Checking the mileage –  the odometer can say plenty about a car. Australians drive an average of 12,000 kilometres annually, so a 10-year old car will on average have around 120,000 km under its belt. If the odometer reading doesn’t gel with the vehicle’s age, ask why. Low mileage could mean the car has been cherished by an elderly lady who only drove to the shops, OR be a sign the car’s spent months at the panel beaters after a major prang. 

It's illegal to roll back the odometer, but that’s not to say it doesn’t happen. Some simple steps can give you confidence about the accuracy of the car’s mileage:

  • Check the logbook – ideally it will have service dates noted that line up with the relevant mileage milestones

  • Assess the car’s appearance – as cars get older, owners can be a bit haphazard about having services recorded in the logbook. They may even have done some servicing themselves. That’s why it’s important to cast a critical eye over the bodywork. Put simply, does the car look like it’s racked up far more hard yards than the owner, or odometer, is saying?

  • See when the next service is due – mechanics often leave a sticker in the top right corner of the windscreen noting the odometer reading when the next service is due.  Check if this matches the logbook

  • If in doubt, get a professional opinion – Redbook Inspect offers a pre-purchase vehicle inspection, which sees a mobile mechanic come to you. It costs $270 but it could save you from buying a rust bucket that’s trying to act younger than its age.  

Give the car a once over

  • Check for dents and scratches

A few scuffs are normal wear and tear, but dodgy bodywork can spell serious trouble. Ask for the car to be parked in sunlight where defects are easier to spot. Telltale signs to look for include uneven panels and blistered paintwork, which can indicate rust. You can even bring along a magnet – it won’t stick to areas that’ve been patched with cheap plastic filler.

  • Assessing glass

Small stone chips aren’t too much of a worry, but glass cracks spread over time, potentially leaving you forking out for a new windscreen.

  • Tyre check

Check out all the tyres, front and back, looking for signs of uneven wear, this can show poor wheel alignment. Then examine the tread, if there’s less than 1.5 mm left, the tyres need to be replaced.  

  • Spare wheel

Spare tyres can go untouched for years, have a look to see if the spare is in good condition. 

  • Check the engine

Always check the engine when it’s cool. Dust and minor dirt in the engine bay is normal, but be wary of oil splatters, a battery covered in corrosion or loose and dangling wires. Hoses and belts should be firm and supple to the touch, not brittle.  

  • Check the electrics

Cars rely on electrical components to run smoothly. To be confident everything is working, turn the ignition. If the engine doesn’t crank into life straight away, it could be a sign of an electrical issue – anything from a dud battery to an alternator on its last legs. With the engine running, listen to see if the car idles smoothly and doesn’t blow clouds of exhaust fumes. Test all the functions including the heater, air-con and sound system to be sure they work.

  • Checking the lights

While the engine’s running, check all the lights from high-beam and indicators to hazard lights. 

Take the car for a test drive

With the engine warmed, it’s time to take the car for a spin. Here are the key factors to look for:

  • Test the steering – get a feel for whether the steering is loose or overly stiff. And use your ears too! Squeaky steering can indicate low power-steering fluid, or it could be a more serious mechanical problem. 

  • Test the brakes – when there are no cars behind you test the brakes at a low speed. Does the pedal feel spongy or does the car tug to one side when you brake? If the brakes aren’t effective, don’t try driving at a higher speed. 

Does it perform how you expect?

The car should handle well, turning corners smoothly, and should be accelerating or decelerating without a hitch. 

Keep an ear out for any rattles or clanks, and while you’re driving, take a glance at the temperature gauge – it should stay in the safe range.   

How to get the best deal

Pre-purchase inspections

If you don’t know a crankshaft from a cylinder head, it makes sense to bring along a friend with mechanical know-how. 

Alternatively, plenty of motoring associations offer a pre-purchase car inspection service for a small fee - but think of this fee as your “used-car-lemon-insurance-policy” to ensure you’re not buying a lemon!  

Search Google for your local pre-purchase car inspection service providers - and check their reviews!

Don’t forget, any minor faults can be used as a bargaining tool, just be sure they’re not part of a bigger problem. 

For example, if the car needs new tyres, that could be a good way to negotiate $500 - $1,000 off the price of the car (depending on how much each of the tyres cost to replace!).

Pull the paperwork together

Check in with your state’s regulations on the documentation and security you should expect to receive from either the dealer or private seller, so you can make sure you’re getting the best deal. 

A dealer will normally provide you with all the appropriate paperwork including any warranty. If you’re buying privately, ask for:

  • The car’s rego papers

  • Logbook

  • Roadworthy certificate – this is a requirement in some states like Queensland

  • Any defect notices

  • A copy of the owner’s drivers licence.

The more info you can get your hands on, the better you’ll feel about making the right decision.

Have copies of all this paperwork lined up even if you just plan to leave a deposit. You’ll need all the information to get the car insured – and that’s a must-do before you hit the road!

Seal the deal

Getting the best deal can be a matter of timing. (Hot tip - if you’re buying from a car yard, the end of the month can be a good time, when dealers are keen to reach their sales targets.) 

If you’re certain the car is right for you, make an offer. Add in a sweetener to seal the deal, for example, offer to pay a deposit on the spot. 

If you’re not comfortable with the price the seller insists on, you can always leave your contact details and walk away. If you’ve made a fair offer, it’s a reasonable bet they’ll come back to you.

How to pay for your used car: used car financing

The final step in buying your used car is paying for it. 

Let’s take a look at the options:

  • Paying cash – handing over cash means you won’t pay interest costs. But even if you’ve managed to save the purchase price, paying in hard coin could wipe out your savings, leaving you scratching for cash if an unexpected bill comes up. 

  • Used car dealer finance – if you buy from a car yard, it’s likely you’ll be offered dealer finance. This may seem convenient but may not be the best deal for you. 

  • A Nimble Car Loan – the beauty of a Car Loan is that you make set repayments over a fixed term. It makes the payments easy to budget for, and you know the date when the loan is fully paid out. Plus, you'll receive a personalised interest rate based on your individual circumstances.

A Used Car Loan combines a competitive rate with a quick decision. You could be driving away in your new set of wheels in just 60 minutes.*

Hit the Apply Now button below to learn more and get started!

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The information on this website is general in nature and does not take into account your objectives, financial situation or needs. Terms, conditions, fees and charges apply, and are subject to change. Applications are subject to Nimble’s credit approval criteria. Redraw not available.

*Terms, conditions, fees and charges apply, and are subject to change. Applications are subject to Nimble’s credit approval criteria. Redraw not available. Funds will generally be transferred to the seller within 60 minutes of the loan contract being signed between 9:00 am and 4:30 pm AEST on business days. Clearance times are subject to the bank receiving funds.

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