Buying a Car From a Private Seller in Australia: What You Need to Know

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Buying a car from a private seller is very tempting because the price is usually quite low. However, no matter how desirable that low figure is, there is still some legwork to be done before you make the sale.

Before buying a car from a private seller, ask about the reason for selling it and its history. Once verbal checks are done, you (or an independent mechanic) must inspect the exteriors and interiors of the vehicle and take it for a test drive.

Sounds easy enough! Let’s make it easier. Here are some warnings and checklists to help you decide and (finally) make that purchase. Between these checklists and professional car inspection services provided by your local private mechanic, you’re guaranteed to avoid a lemon. This guide is all you need to know about buying a car from a private seller.

What Consumer Rights Do You Have When Buying a Car From a Private Seller in Australia?

You are not protected by any laws when you buy a car from a private seller. Fair Trading won’t be able to assist you when you buy from private individuals.

As a consumer making a private trade, the duty and responsibility falls on you to check if the car has money owing on it or has been written off. It’s important to ask the right questions, get all the certificates, and ask a licensed mechanic to do an independent inspection of the vehicle.

What Are the Benefits of Purchasing a Used Car From a Private Seller?

The main benefits of buying a used car from a private seller include the following: 

  • Affordability – When buying a used car from a private seller, prices are lower than dealerships. You can even negotiate lower prices because these individuals want to dispose of their vehicle, usually to upgrade.
  • Firsthand account of the vehicle’s history – Sure, logbooks will contain maintenance history. Still, nobody knows the vehicle’s history more than the owner. If they’re being honest, that’s good; if they’re a bit hesitant, you can read between the lines. While a firsthand account is no substitute for a proper car history check, it’s still good information to have directly from the seller. 
  • Generally better condition – Because you’re buying from private individuals, you’re assured that the owners took care of the vehicle and can easily tell if they have not. When buying from a private seller, it’s a lot easier to find out about and discuss any modifications made to the car from someone who has spent a lot of time driving it. 
  • There’s less pressure – Private individuals don’t have the skill and aggressiveness of salespeople. You won’t feel too pressured to buy on the spot because private sellers won’t offer you hard-to-resist deals.
  • It’s easier to find what you want – If you already know the make or model you want, you can easily filter your options. Sometimes looking at too many options at dealerships or auction houses proves too much, and it may take time that you don’t want to waste.

What Are the Drawbacks of Purchasing a Used Car From a Private Seller?

There are several downsides when purchasing a used car from a private seller, such as:

  • Possible dodgy background – If you don’t ask the right questions, you may face vehicles with a dodgy past. The vehicle may have been stolen, been in an accident, involved in a crime, or written off. If you’re not one to pry, it’s best to avoid getting a used car from a private seller.
  • Extra costs outside the sale – Getting a Personal Property Securities Register (PPSR) certificate is recommended to check if the car has money owing on it. Additionally, getting the car checked by a professional mechanic is best practice before making the deal to ensure you don’t get a lemon. Since a private seller is not legally bound to provide you with the PPSR certificate or do an independent vehicle inspection, you have to shell out a bit more than the vehicle’s selling price.
  • No warranty – Dealerships and licensed auctioneers will usually offer you warranties as part of the package to protect you from financial losses. Private sellers can’t provide you with this. (That’s why it’s important to get an independent vehicle inspection before the deal).
  • No cooling-off period – Licensed motor dealers provide buyers with 1 business day to decide if they really like the purchase. This is called the cooling-off period, and buyers can cancel the contract without huge penalties. With private sellers, this is not guaranteed.
  • No compensation claim fund – Auctioneers and dealerships must provide you with a compensation claim fund if your purchase is not as advertised. Additionally, customers can make a claim if they cancel during a cooling-off period or find out that the vehicle doesn’t have a clear title. However, this is not possible with a private sale.

What to Check for When Buying a Used Car From a Private Seller

It can be difficult to remember everything you need to check if you’re looking to buy a used car from a private seller. Below is a complete checklist of all the things to check when buying a used car from a private seller: 

Exterior Condition – Check the body for rust and replacements. If there are mismatched, loose, or misaligned panels and different paint colours, the car may have gotten into an accident, so be extra meticulous. Also, check the tyres (including the spare) and their treads. The lights should also be functional, and the exhaust system clean.

Age of the Vehicle – Match the age of the vehicle with the odometer reading. (Australians drive 20,000 km/yr on average). If it looks more used and battered than it should be, then reconsider or negotiate for the price. Carefully consider the availability of the parts, as well, since older makes and models will probably give you a hard time with parts replacement and servicing.

Proof of Ownership – The car’s title should match the seller of the vehicle. If they’re selling the car for someone else, look for another vehicle, as you’re likely looking at a scam.

Safety Certificates – Ask for a Safety Certificate or Roadworthy Certificate before you make a deal. It is a private seller’s responsibility to get this before the sale is made.

Gas Certificates – Applicable to LPG-run cars, gas certificates must be provided by sellers to buyers to show that the car is in good condition. Similar to a safety certificate, a gas certificate is also required before transferring ownership of the vehicle.

The Logbook – The vehicle logbook should indicate the car’s service and maintenance history. It’s also possible to see its sale history if it’s been sold multiple times.

How the Car Drives – It is important to test drive the vehicle and check the steering, acceleration, braking, transmission, and suspension. Go on roads with bumps and curves to check them, and drive for about 30 minutes to check for inconsistencies. Also, get a feel for how it is in the driver and passenger seats.

The Condition Under the Bonnet – You can get a mechanic to inspect the vehicle independently, so there’s no bias in reporting any flaws. Under the bonnet, the Vehicle Registration Number (VIN), condition of the battery, fluid levels, tubing, and smells should be checked. Also, inspect the overall condition for any signs of wear and tear. New painting or welding in the joins generally indicates a history of accidents. If you don’t know how to inspect a used car, make sure you bring a friend who does or bring the car to a private mechanic. 

A Car History Report – It is also recommended to get a vehicle history report to know if there’s any money owing on the vehicle, if it’s been stolen or written off, its valuation, and even its odometer reading, among others. A PPSR, a national view of the vehicle history, and ANCAP safety and emission ratings can also be provided.

Existing Registration – Check the vehicle registration papers. The VIN should show the car’s model, series, luxury level, and body style. Meanwhile, its licence plates should show the registration and compliance dates. 

What to Ask When Buying a Used Car From a Private Seller

Knowing what to ask, how to ask it, and what answers you’re looking for are essential when buying a used car from a private seller. Here is a checklist of questions you need to be asking the owner of a used car you’re looking to buy:

  • Why are you selling the car?
  • How long have you owned the car?
  • How old is the car? (has it had multiple owners?)
  • Is the car still under warranty?
  • How long until the Compulsory Third Party (CTP) insurance expires?
  • How often is it maintained/serviced?
  • What features don’t work (as well as they used to) anymore?
  • Has it had recent repairs?
  • What’s the car’s mileage?
  • Was the car used by smokers or people with pets?
  • Has the car been in any accidents?
  • Have any upgrades or replacements been done?
  • How did you arrive at this price?

How Do You Pay for a Car From a Private Seller in Australia?

Options include electronic bank transfers, over-the-counter bank transfers, spot cash, or potentially even cryptocurrency. Of course, paying for a private sale depends on the agreement of the seller and buyer. 

When dealing with cash or cash deposits, it’s best to do it at a bank to ensure you’re not dealing with fake currencies. Also, you get timestamps and records in your bank account.

Electronic bank transfers are convenient, but it is highly recommended for people who mutually trust each other. The danger with electronic bank transfers is that the amount is not always reflected immediately, which gives the buyer a chance to cancel the transaction.

Cryptocurrency is the riskiest because the amount is volatile. If you are dealing with cryptocurrency, share receipts and/or paperwork to document the transaction.

Privately Sold Car FAQs

Is Buying a Used Car From a Private Seller Cheaper Than a Dealership?

Yes, buying a used car from a private seller is usually cheaper than a dealership. This is because of overheads since dealerships need to pay for the space and workers in their shops.

Can You Insure a Used Car Bought From a Private Seller?

Yes, you can insure a used car bought from a private seller with CTP insurance, which covers injury to third parties in an accident. You can buy additional car insurance for better coverage. The most recommended insurance is comprehensive policy insurance, which covers accidents involving you and any third party. 

Can I Get a Car Loan to Buy a Used Car?

Yes, you can get a car loan on a used car in Australia. You can check a secured car loan for vehicles not older than 7 years old, or a personal loan for those older than 7 years old. You can also talk to your employer about a novated lease, where your salary can be bundled with lease payments. 

Is Buying From a Private Seller Better Than Auctions or Dealerships?

Many people choose to buy from a private seller because speaking directly to the person with intimate knowledge of the car makes it a lot easier to find out information about the vehicle and be sure of your purchase.

Dealerships and auctions have a lot more variety, but due to the nature of the business, many cars come in and out all the time. Buying from a private seller is the best way to buy a used car if you value having lots of accurate information about the car you’re buying. 

Related Questions

How Do I Prove Ownership of a Car in Australia?

To prove ownership of a car, you can show any of the following: the most recent registration certificate, a bill of sale from a recognised auction house or a licensed motor vehicle dealer, documents from a court of law allocating ownership of a vehicle or a letter, receipt, or notice of disposal from the former owner.

Can You Return a Car After Buying It From a Private Seller?

No, there is no law which allows for returns when buying a used car from a private seller. Therefore, if you don’t negotiate a cooling-off period, you can’t return a car after buying it from the seller.


In addition to providing expert advice, Shift Automotive offers a comprehensive range of services to keep your vehicle running smoothly and safely. Our wheel alignment service ensures your tires wear evenly, extending their lifespan and improving your vehicle’s handling. We also provide expert brake servicing to ensure your vehicle stops safely. Trust Shift Automotive for all your automotive needs.


Disclaimer:

This article is published in good faith and for general informational purposes only. Shift Automotive does not make any warranties about the ongoing completeness and reliability of this information, and specifics will vary according to your vehicle’s manufacturer and model. This article is not intended to replace consultation with a qualified automotive service technician.