How to Avoid Purchasing a Lemon
12/04/2019

After your house, your car is probably going be the biggest investment that you make in your life.

Avoid going in blind with our guide to purchasing a good used car.

1. Don’t Rush Into Anything!

There comes a time in every car’s life where further investment is no longer viable. If you’re heavily reliant on your car, getting a replacement vehicle can start to become ever more urgent. While this might be the case, don’t rush into a rebound vehicle. Many used cars can seem like a dream but fall apart soon after.

2. Do Your Research

Never admit that you are a novice in the car purchasing market. Sellers (especially of used cars) will make the most of it.

Do your research. Have an idea of which model you are looking for, and the price you are looking to pay for it. Reliability ratings and consumer reviews are usually good places to start. Look specifically for reviews from people who have owned used cars. A specific make and model might be judged as a five-star car when bought new but have incurred a variety of problems after six or seven years.

Be wary of cars that have a lot of modifications or customisations. The car may have had its electricals, suspension or steering altered by an unqualified enthusiast.

It can also be beneficial to have a list of questions prepared to ask the salesperson.

Good questions to ask include:

  • How many previous owners has the car had?
  • What has the car been predominantly used for?
  • When was the car last serviced?
  • Can I see the service and repair history?
  • Has the car ever been involved in any kind of accident?

Ready to start going to look at some cars?

3. When You Do View a Car, View it in Daylight

If you ever arrange a viewing of a car with a private seller – or a dealer tells you they’re open late – you’re better off waiting until you can see it during the day. Daylight brings the opportunity to see any small scuffs, scratches, tell-tale signs of the car being involved in an accident, chips to any of the windows, or any other signs of damage.

Check the tyres, too. Many sellers will put new tyres on the car, but older tyres might give some clues to how the car has been treated overall. If tyre tread has been allowed to wear right down, what else has potentially been neglected? If the outer tyre walls look heavily worn this is a sign that the car has been driven aggressively. Uneven wear may be a signal of problems with the car’s suspension, steering, or brakes.

Take a look at the interior. You may not be able to draw too many conclusions, but there might be some tell-tale signs that the car has not been particularly well looked after.

Have a check under the bonnet, too. We’re going to address this properly later, but you’ll be able to spot warning signs of wear and tear yourself. If the seller starts talking too much, this might be a sign that something’s up!

4. Take the Car for a Test Drive

Happy with what you’ve seen so far?

Any seller worth their salt will have enough fuel in the tank for interested buyers to take a test drive. If anyone tries to discourage you from taking a test drive, they’re probably not worth doing business with.

What do you need to look out for when test driving your car? Choose the relevant checklist based on whether you’re going to be looking at a manual or an automatic car.

5. Pay an Independent Mechanic to Complete a Pre-Purchase Inspection

Even if the test drive went like a dream, you need to do this.

A pre-purchase car inspection might cost you a couple of hundred dollars, but that’s small change compared to what you’ll spend if you buy a lemon and are landed with a car repair bill in a few months’ time.

Any reputable seller will be happy for a mechanic to conduct such an inspection. Some might even be expecting it. If you can get a mechanic who you know and trust to do this, all the better, but at least ensure they are acting independent of the seller.

While your concern may rest with the more complex mechanical aspects of the vehicle, it is also worth getting a professional to examine the external bodywork and interior. Try to be present when the inspection takes place.

If your mechanic finds any minor issues, you may be able to negotiate on price or get the seller to pay for the repairs first. Minor issues from private sellers aren’t necessarily a big red flag. They might be just as clueless when it comes to cars as you are!

 

6. Check paperwork, Repair History, and do a REV’s Check

Relevant vehicle documentation should always be verified prior to purchase. If possible, get the mechanic that has looked over the car to look through this for you. Your mechanic will be looking for anomalies in the cars’ history, such as a pattern of repeat issues, cover up repairs, or neglected

A Register of Encumbered Vehicles (REV’s) check enables you to check there is no outstanding finance attached to a car. Imagine buying a great car and it being repossessed a week later! An REV’s check can also determine whether a car is stolen, if it has been written off, water damaged, and that the mileage is correct on the odometer.

Car dealers are obliged by law to have carried out these checks and guarantee the car is good. You would hope they would check before buying the car themselves! If you are buying a car privately, you will need to use the REVs website to do this yourself.

To complete a REVs check, you need:

  • The car registration number
  • The vehicle identification number (VIN)
  • The engine number

 

7. Should the Vehicle Have a Roadworthy Certificate?

Depending on where you are, or if you are transferring the vehicle interstate, your vehicle may be legally required to have a valid a roadworthy certificate when you buy it. Make sure you find out if you need a roadworthy certificate, and make it the seller’s responsibility to get this before you do a deal on the car.

The table below highlights the different state rules on needing a roadworthy certificate for a car.

 

8. If You Buy From a Dealer, Make Sure You Get a Warranty!

The biggest advantage of buying from a dealer versus buying privately is that you can get a warranty.

Many dealers will sell cut-price cars with terms such as “no warranty given or implied”. Don’t buy these! They’re openly admitting they’re selling you a lemon!

All of the steps you have taken so far, particularly your research and your check of car’s service and repair history, should mean you’re buying a car that you trust will be reliable anyway. That being said, sometimes things go wrong despite adequate research and preparation.

Make sure you are clear on the warranty terms when you buy a used car from a dealer. Often the warranty will be 1 – 3 months as standard. Check whether you have the option to purchase an extended warranty once the standard warranty has expired. At least then if you have unwittingly bought a lemon despite everything, you won’t have to shell out thousands on repairs!

 

Have You Considered Buying a New Car?

While some car manufacturers don’t have great reputations for producing reliable vehicles, buying a new car might be your best bet when it comes to ensuring you’re not buying a lemon. Warranties are much longer than on second hand vehicles, and all cars sold in Australia new are required to meet government safety standards.

 

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