Buying a new or used motor vehicle
Before you start looking
- Decide on the type of vehicle that best suits your needs - 4 or 6 cylinder, wagon or sedan, manual or automatic.
- Decide how much you can afford to pay - consider not just the purchase price of the vehicle but also running costs including petrol, insurance, servicing and registration.
- Set yourself a price limit.
- Check advertisements to get an idea of what you can expect to pay, and if you have a vehicle to trade-in, what you can expect to get for it.
- Have a look at Redbook for information on new and used vehicle values. Redbook also has other useful information such as details of new models, vehicle reviews and comparisons and motorcycle values.
- Consider the cost and availability of spare parts - especially for imported or older vehicles.
- If you need a loan, shop around for the best deal and have it approved before you start looking.
- Visit the How safe is your car website.
Finding your vehicle
- Research and compare prices and deals.
- Check the warranty conditions.
- Check as many details as you can yourself. Make sure items such as seat belts, headlights, brake lights, indicators, tyres, spare tyre, and accessories (including audio systems, air conditioning, clock, cigarette lighter) work properly and that items such as the jack and tools are present.
- Check to see if there is any rust visible in the body. Look not only for obvious holes, but also for brown stains or bubbles under the paintwork.
- Take the vehicle for a test drive over a range of conditions, eg holding a straight line, performance up hills, braking, stop/start performance.
- Have a complete mechanical inspection or 'pre-purchase inspection' performed by a qualified mechanic or your auto association before you agree to buy the vehicle.
There is not a set amount for a deposit. This should be negotiated between you and the seller.
If you decide that you like a vehicle and you are asked to pay a deposit, check first whether you are paying a holding deposit or a purchase deposit.
A holding deposit:
- does not oblige you to proceed with the purchase. It is simply to ensure that the vehicle is not sold to somebody else while you are considering it;
- may go towards the purchase price. You will need to negotiate this with the seller before paying your deposit;
- can be refundable or non-refundable depending on what is agreed between you and the seller. Make sure it is clear before paying the deposit;
- only applies for a limited time. You should negotiate with the seller how long your deposit holds the vehicle for before paying the deposit.
If paying a holding deposit, make sure you receive a proper receipt which sets out the agreed terms and conditions.
A purchase deposit:
- is committing you to purchase the vehicle.
- is usually non-refundable.
- will involve signing a contract to purchase the vehicle.
- all terms and conditions relating to the sale, including the deposit, must be stated clearly in the contract.
- Do not sign a document or contract until you have read and agreed with all the terms and conditions.
- Examine all documentation carefully and don't be pressured into signing anything you don't fully understand or are not entirely happy with.
- There is no statutory cooling-off right for motor vehicle sales in Tasmania.
- You can request to take the contract away and consider your options or seek further advice.
- Make sure all conditions regarding the sale are included in writing within the contract. These may include:
- promises for additional work to be carried out;
- finance conditions.
- Do not accept verbal promises from the seller. Make sure all agreed terms are included in the documentation.
- Check that all blank spaces on the contract have been crossed out and initialled by both you and the seller. All special conditions must be fully explained in the contract.
- Make sure you keep a copy of the contract once it is signed by all parties. Keep this document for future reference.
Purchasing from a motor vehicle trader
The law requires the contract to be in writing and include the following:
- the motor vehicle trader's licence number. You can search a motor vehicle trader licence to confirm the number is valid or check whether a trader is licensed;
- any special conditions relating to the sale or exchange. This could include extras, finance, on-road costs, or insurance;
- the change-over price paid by the purchaser on any trade-in;
- any promise made by the motor vehicle trader in any advertisement or in person, that is not already included in the warranty;
- the terms of a statutory warranty (if the vehicle is eligible);
- the terms of any additional warranty offered including the manufacturer's warranty;
- the total price of the vehicle inclusive of any change-over price. The total price does not need to include duty payable to the Government on transfer of registration.
If the contract involves the supply of a second hand vehicle, a copy of the Pre-sale Disclosure Statement must be attached to the contract. The pre-sale disclosure statement then forms part of the contract.
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Purchasing from a private seller
- There is no legal requirement for the contract to be in writing
- There is no warranty protection
- The seller does not have to:
- fix anything that goes wrong with the vehicle
- inform you of any faults
- pass clear title to the vehicle
- It is the purchaser's responsibility to:
- Check the registration plate matches the number on the registration papers
- Have a pre-purchase check done by a qualified mechanic to make sure the vehicle is mechanically sound and meets your needs
Your rights as a purchaser - when buying a new vehicle from a motor vehicle trader
You are provided with a number of important protections under the Australian Consumer Law (ACL) and the Motor Vehicle Traders Act 2011 (MVTA) that are not available when purchasing privately.
- A trader guarantees that a new vehicle and all of its parts are in working order
- All new vehicles come with a manufacturer's warranty covering any faults and defects
- Read the warranty carefully as the length of the warranty period can vary
- Identify and correct any faults at the first mechanical service which should be arranged soon after delivery of the vehicle
- Scheduled services can be done by qualified independent mechanics without affecting the warranty
- If repairs are required return the vehicle to the place of purchase. Faults that occur due to no fault of the purchaser are generally covered under the Australian Consumer Law.
Your rights as a purchaser - when buying a second hand vehicle from a motor vehicle trader
The Australian Consumer Law and the Motor Trader Vehicle Act 2011 (the Act) requires the seller of a motor vehicle to guarantee certain things about a second hand vehicle. The Act requires that motor traders provide a statutory warranty on certain vehicles which guarantees the vehicle is fit for purpose and in working order. The trader may have to replace or repair parts, or offer an exchange or refund on the vehicle if it does not comply with the warranty.
Where a used vehicle is offered for sale, a Pre-sale Disclosure Statement must be provided. This document sets out specific details of the vehicle including a list of any faults in the vehicle that the trader is aware of.
Motor vehicle traders must guarantee the vehicle:
- is in working order except as specified in the pre-sale disclosure statement; and
- complies with the pre-sale disclosure statement
Your rights as a purchaser - when buying from auction sales
A statutory warranty applies to motor vehicles sold for a fixed price by auction houses, only if the auction house is a licensed motor vehicle trader. The warranty applies even if the vehicle is sold on consignment.
A statutory warranty also applies to vehicles auctioned by an auction house if the auction house owns the vehicle and is a licensed motor vehicle trader.
A statutory warranty applies:
- to vehicles sold for a fixed price on consignment
- where the auction house takes title of the vehicle and auctions
- where the auction house takes title and sells for a fixed price
A statutory warranty does not apply to:
- vehicles auctioned on consignment
A motor vehicle trader must provide a written statutory warranty for used vehicles in the following circumstances:
- a vehicle, that is not a motor bike or scooter, that has travelled less than 120,000 kms and is fitted with a compliance plate less than 7 years prior to its sale or exchange; and
- a motor bike, trike or scooter that has travelled less than 15,000 kms and is fitted with a compliance plate less than 3 years before its sale or exchange
In addition to the statutory warranty the motor vehicle trader may also offer to provide a warranty with the vehicle. This may come as 'standard' with the vehicle or it may be purchased as an 'additional' or 'extended warranty'.
How long does the warranty last for?
The statutory warranty ceases to have effect:
- three months after the vehicle is delivered or after being driven 3000 kms, whichever occurs sooner
- if used by the purchaser for rally driving or motor racing
- if used by the purchaser as a taxi or hire vehicle
- if repossessed by a financier
- if the purchaser sells the vehicle to another person; or
- if the odometer reading is altered
What is not covered by warranty?
The warranty does not cover any defect that:
- occurs in a brake lining, pad, drum, disc, clutch pressure plate, spigot bearing, clutch release bearing or flywheel clutch plate, tyre or battery
- is subject to a manufacturer's recall
- results from unauthorised repair after sale
- results from failure to maintain or service the vehicle after sale
- results from misuse, negligence, immersion in water, collision, accidental or deliberate damage, or water freezing after sale
- results from racing or trialling after sale; or
- results from unauthorised modifications after sale
What is the traders obligation for a warranty repair?
If a problem or fault is covered by the statutory warranty and no manufacturer's warranty applies, the motor vehicle trader must have the vehicle repaired at their expense. A claim for repair must be made:
- within 7 days of the problem or fault being discovered (unless a longer time is specified in the contract or any additional warranty); or
- within 7 days of the owner being notified that the manufacturer has refused repair under a manufacturer's warranty.
The repair must be carried out according to industry standards. The repaired vehicle must be 'fit for purpose' and in a reasonable condition, having regard to its age, its original price and description, and all other relevant circumstances. It may be acceptable for example to fit a second hand part to a second hand vehicle. It would not be acceptable to fit a second hand part to a new vehicle.
Cancelling the contract of sale
There is no statutory 'cooling off' right for motor vehicle sales in Tasmania. A consumer can only cancel a sale contract by agreement with the trader, or by a court order.
A consumer can apply to the Magistrates Court of Tasmania for an order cancelling the contract if they believe that:
- the contract does not comply with the Motor Vehicle Traders Act 2011; or
- the trader has made a false representation with respect to the odometer or odometer reading; or
- the vehicle is 'substantially different' from the pre-sale disclosure statement
The consumer must inform the motor vehicle trader in writing why they wish to cancel the contract within the first 90 days after they take delivery of the vehicle.
You have 60 days from the time you notify the trader to apply to the Magistrates Court for a hearing to cancel the contract. This is intended to give you time to attempt to resolve the matter with the motor vehicle trader.
If you are not able to resolve the matter and you wish to cancel the contract, you will need to lodge a civil claim with the Magistrates Court. The Magistrate can:
- order the contract remain in force
- order the contract is cancelled; or
- make an appropriate order to resolve the dispute.
For example, the magistrate might order the trader pay some money in compensation but the consumer keep the vehicle, or order the trader refund the purchase price minus compensation for the consumer's use of the vehicle.