Gearing up to buy? Do your research

Laws about buying and selling cars differ between Australian states – but no matter where you are, some simple steps can help you get the best deal. These include checking out running costs, finance, insurance and your legal rights.

A car’s value falls over time. This drop in value, or ‘depreciation’, can be the most expensive cost of owning a vehicle. Some cars depreciate faster, so research the rate for models you are considering. For Victorians, RACV’s online Vehicle Operating Costs Survey has estimated depreciation rates for popular new models.

Investigate running costs: fuel efficiency varies for different models. Refer to the Australian Greenhouse Office’s Green Vehicle Guide or the Green Wheels Buyers Guide.

Before you commit to buy, research how you will pay for your purchase. Many traders can help you arrange finance, but deals can vary significantly. Always check rates and fees offered by a range of providers, including banks or credit unions.

Some car brands and dealers also offer insurance, but it may be cheaper to arrange your own insurance. Contact insurance companies to compare the cost and policy coverage.

Understanding your legal rights before you buy also helps. Consumers across the nation have rights under the Australian Consumer Law, and each state has its own laws on sale of new and used motor vehicles.

The sale agreement, or contract, is legally binding. Make sure you understand the document and don’t sign if it has unfilled spaces. Insist all costs are clearly itemised and that the contract specifies a delivery date – if it doesn’t, you may have a long wait for the vehicle.

If the dealer cannot specify a delivery date, the contract should include a date after which you no longer want to buy the vehicle.

The contract should also specify the colour and any other particulars or optional extras, such as year of manufacture.

You can buy a new car from a licensed motor car trader, or buy a used car from a licensed trader or private seller. If you are buying from a private seller, check the vehicle’s status on the national Personal Property Securities Register website (Editor’s note – consider checking Carfacts).

Buying from a licensed trader gives you more legal protection. In Victoria, the benefits include a cooling-off period, statutory warranty and a guarantee of clear title. You can check a Victorian trader’s licence at the Business Licensing Authority website.

For more tips, contact your state or territory fair trading agency. If you’re buying or selling in Victoria, visit Consumer Affairs Victoria’s website.

Article provided by Consumer Affairs Victoria.