At a glance
| Licensed dealer | Private seller | |
|---|---|---|
| Price | Usually higher | Usually lower, with more room to negotiate |
| Consumer guarantees (Australian Consumer Law) | Yes | Generally no |
| Dealer statutory warranty | In many states, for newer cars under certain age and kilometre limits | No |
| Clear title (no finance owing) | Generally required of licensed dealers | Your responsibility to check |
| Trade-in and finance | Usually offered | No |
| Paperwork | Dealer usually handles the transfer | You and the seller lodge it |
Buying from a licensed dealer
Consumer guarantees. When you buy from a business, the Australian Consumer Law guarantees that the car is of acceptable quality, fit for purpose and matches its description, taking into account its age, kilometres and price. If it has a major problem, you may be entitled to a repair, replacement or refund.
Statutory warranties. Many states also require licensed dealers to give a short warranty on used cars under certain age and kilometre limits. The rules differ between states, so ask the dealer what applies to the car and get it in writing.
Clear title. Licensed dealers are generally required to make sure the car is free of finance before they sell it, which takes most of the finance-owing risk away from you.
Things to watch: add-ons such as extended warranties, paint protection and insurance can add a lot to the price, and you don’t have to buy them. Read the contract before signing, and ask whether there’s a cooling-off period and what it costs to use it.
Buying from a private seller
Lower prices. Private sellers don’t have a dealer’s overheads, so the same car is often cheaper.
Fewer protections. The consumer guarantees generally don’t apply to private sales, and there’s no statutory warranty. The car is usually sold “as is”, so if something goes wrong after you buy, your options are limited, unless the seller misled you about the car.
More checks are on you. In a private sale, it’s up to you to confirm the car isn’t under finance, written off or stolen, and that the seller has the right to sell it.
Watch for backyard dealers. Someone selling lots of cars “privately” may be an unlicensed trader avoiding the obligations dealers have. If the seller’s name isn’t on the registration papers, ask why.
What about auctions?
Car auctions can be cheap, but consumer guarantees generally don’t apply to goods sold at auction, and you often can’t test drive. Read the auction house’s terms, inspect beforehand if you can, and run your own checks on the VIN before you bid.
Checks to do either way
- A PPSR check for finance owing, write-off and stolen status. In a private sale, run it on the day you pay.
- A free rego check to confirm the registration is current and the plates belong to the car.
- A VIN match between the car, the papers and your check results. Where to find the VIN.
- A pre-purchase inspection by an independent mechanic.
- An odometer check and service history review, especially on a higher-value car.
For a step-by-step private sale, see the used car buying checklist. If you’re buying online, read buying on Facebook Marketplace or Gumtree.
For your rights when buying from a business, see the ACCC or your state’s fair trading or consumer affairs office.