What are my rights when I buy a car?

We want to trust people, especially those people selling us a new or used in exchange for a lot of money.

We want the car to be safe and reliable, and we want to be certain that it won’t be the subject of a police investigation.

But in the tradition of best laid plans, things can go wrong, and when they do you want more than just Murphy’s law on your side.

A dispute with a dealer may arise out of a warranty claim, vehicle ownership or the transaction price intially agreed.

In the event of a major mechanical failure – the death of an engine or transmission, for instance – your car may not be protected by the warranty coverage you expect. The dealer may point you to the statutory warranty applicable, which may have already expired – and if you didn’t know that the statutory warranty is as short as three months or 5000km, you’ll be left seething.

The statutory warranty may not apply anyway, if the vehicle has notched up too many kilometres or is too old. These limitations often vary from state to state.

Heading off disaster before it strikes, don’t rely on a statutory roadworthy check as an indicator of the car's condition. It only applies to a limited list of safety checks. If a compulsory roadworthy check missed specified items, state laws normally allow some recourse.

If you pay for the car to be inspected, the dealer is not responsible for any faults that the inspection finds unless they contravene the applicable statutory roadworthy requirements. Do not lock yourself into purchasing the car until the checks are completed and you have negotiated the rectification of any faults to your satisfaction.

If the car comes with a warranty, clarify the exemptions and your obligations. Some warranties are void if you do not follow the specified servicing requirements. Others cover very little once you eliminate the wear and tear items so don't depend on them to turn a dodgy car into a good one.

Should you purchase the car, only for it to suffer a ‘major failure’, you may have the option of claiming the cost of repairs through Australian Consumer Law, provided it can be established that the buyer was not warned of the possibility the failure would occur, and that it occurred within what would be deemed a ‘reasonable time’. In this event, the ACL may place the onus on the vehicle manufacturer or importer to effect repairs.

Again, however, don’t expect even ACL will be able to twist the arm of the importer if the engine has punched a conrod through the block at 200,000km – a decade after the last time the car saw the inside of a dealer’s workshop.

What if the problem is not mechanical, but ownership? In most states, the dealer must guarantee title and will face penalties if the car is misrepresented.

In theory, ACL can also help you in the event that a dealer sells you a car that is still subject to someone else’s finance contract. The dealer is required by law to ensure that the buyer will have title to the goods sold (the car being purchased, in this case). If it should happen – and it’s uncommon these days – that someone official confiscates your car because the previous owner didn’t pay off the secured loan, the dealer can be held liable under ACL.

Engaging a solicitor to wave ACL at a dealer is a good idea, if it should come to that. It may not.

Laws applying to dealers are quite comprehensive but differ in each state. You can contact your local consumer authority, automotive chamber of commerce or motor trade licensing authority to clarify current requirements, which may have changed since you last purchased a car.

Before you sign anything, read it carefully. Some states allow a cooling-off period after you have agreed to buy the car. You may have second thoughts, if you learn subsequently that you’ve paid too much for the car, or there was a car of a nicer colour sold by another dealer just down the road.

Treat the cooling-off period as a last resort only, as it is very difficult to renegotiate a deal if you have already agreed to a price and signed on the bottom line.

You have far less legal comeback when buying privately. The only obligation for sellers is to describe the car truthfully – but even if they don't, getting compensation from them can be difficult, time consuming and costly. Even if there is clear legal comeback, private sellers may no longer be at the address where you last met them.

If a car is supplied with a current Road Worthy Certificate (RWC) you have every right to expect it to meet the required standards. Most states will act on dodgy licensed vehicle testers but getting satisfaction can be time-consuming.

Make sure that it is owned by the person who is selling it – because if you later find out it has been stolen or sold without the owner's knowledge, you have no legal right to keep it. You’re in the same boat, what’s more, if the seller still owes money on the car. The financier has first dibs at recovering money if the car is the collateral for a secured loan. It’s easy enough to check the ownership status however. All you need to do is conduct a PPSR check, which you can also arrange through carsales vehicle history report.

Make sure that the conditions of purchase are covered in writing including the terms surrounding the payment of a deposit and its refund if a pre-purchase inspection does not meet your satisfaction.

Clarify what happens if the car has been damaged or key features have been removed when you come back to pay the balance. It is not unreasonable to note the speedo reading and specify that the car must not be used until you return with the balance, if you have paid a deposit and made a commitment to purchase the car as first presented to you.

If a car is subject to a financial agreement, verify the exact amount owing and how this is going to be paid out before you hand over the money. In some cases, the purchase price may not be enough to cover the money still owing on the car and the vendor will need to top it up before it can be signed over to you.

Don't forget to arrange insurance cover as it becomes your responsibility once you hand over the money.

Because used car problems can involve several bodies or government departments you will need to identify which area of the law applies or which body administers the relevant area. If a problem is the result of criminal behaviour, the police or an independent assessor may need to be involved.

If your purchase is suspected of being stolen or badly repaired, it may be impounded or put off the road for as long as it takes to complete an investigation. You may need legal advice under these circumstances. Insurance policies do not cover you if the car is found to have been stolen prior to you purchasing it.

The following organisations are a good place to start before thinking of engaging a lawyer.

Legal advice:
State motoring organisations
Automotive chambers of commerce
State consumer authorities and motor trade licensing authorities
Citizen's advice bureaus

Pre-purchase Inspections:
State motoring organisations
Check the Yellow Pages under "Motor Vehicle Inspection and Testing"

Technical Advice:
State motoring organizations
Vehicle Manufacturers and Distributors
Specialist used car publications and websites

Vehicle history, wreck registers and finance checks:
carsales vehicle history report
Personal Property Securities Register
Look under your state's registration authority

Problems with dealers:
State automotive chamber of commerce
State motor vehicle trade licensing authority

Insurance Problems:
Insurance Council
State consumer authorities

Financial Problems:
Consumer Credit and Trade Association