How to Determine Whether to Buy Your Used Car from a Dealer or Private Seller

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Many people worry about the level of depreciation that they will suffer, should they buy a brand-new car from a dealer's showroom. They know that they will lose some money as soon as they drive it out of the parking area and as a consequence, feel a lot happier buying used cars. Are there any risks associated with doing this, and are you protected properly when buying a second-hand vehicle? What's the difference between buying privately or from a dealer?

Levels of Protection

A number of laws exist across Australia to protect anyone who buys from either a private seller or a dealer. In a private situation, the person you buy from has to guarantee that the title is clear and that there are no liens or "undisclosed securities." You need to make sure that you have full ownership of the vehicle with a clear title and the buyer must show that they are the legal owner. Most importantly, you need to ensure that you have what is known as "undisturbed possession," and nobody else has a claim for at least partial ownership of the car. Of course, if you do happen to enter into an agreement with a finance provider, they will have a claim against the car, but this is entirely separate.

Asking the Right Questions

Don't forget to question the seller carefully about the condition of the vehicle you are buying. Make a record of this conversation, as in certain circumstances a seller can be found liable if they misrepresent the state of the car that they are trying to sell you. This can also include a deliberate omission, where crucial pieces of information are concerned.

Getting Extra Protection

If you want an additional protection, then you should consider buying your used car from a dealer. This is because the dealer has to guarantee that the vehicle is of an acceptable quality based on its age and mileage and fit for the purpose. If you happen to be shown a similar, demonstration model before you actually buy the vehicle in question, the dealer has to warrant that the description given is equal to the demo. There are also stipulations when it comes to the terms of the contract that you sign, as the dealership is not allowed to include any that could be determined to be unfair or misleading.

What Is Best for You?

Usually, you will be perfectly fine whether you buy from a private seller or from a dealer. However, in the latter case, you should have additional peace of mind, due to the extra requirements and guarantees.