Your guide to buying a used car

Last updated on February 15, 2024
Buying a used car can be a great way to save money and reduce your impact on the environment. Whether you’re buying a car from a stranger, or purchasing from a friend, we’ve designed this article as your own personal Private Buyers Guide to help you navigate the process.
The range of used vehicles available can be overwhelming for a private buyer. It’s important to do your research upfront so that you know the right car for your budget and needs. Knowing the questions to ask when buying a used car can also help.

Some sellers may seek a price for their vehicle that isn’t based on its value. Where possible, compare vehicles of a similar size, model, age, kilometres on odometer, and features to understand if a car you’re interested in is priced in line with the market. Price can often be negotiable, but try to be realistic in what you think you’ll be able to agree with the seller.

When deciding your budget, it’s important to factor in the ultimate cost of the car, including stamp duty, registration and transfer costs, maintenance and repair costs, as well as insurance. We recommend getting an insurance quote online, so you know what your premiums may cost and can factor this into your budget.

Asking yourself why you’re buying the vehicle and what you’re going to use it for will help you decide the size and space you need. Will it just be for your daily commute or for long-distance journeys? Is it for work? Or for leisure, like towing a trailer, camper, or boat?
You won’t be able to work out the full safety features of the vehicle until you see it in person and inspect its paperwork (including service history), but a good ‘for sale’ listing should clearly outline the safety features. These can be airbags, seat belts, overspeed warnings, lane departure warnings, and stability control.

Fuel economy means getting the most distance in your car from its tank of fuel. Older cars can have lower fuel efficiency; but to offset this, an older car’s price point may be lower.

Another consideration is the environmental impact of your car. The Australian Government’s Green Vehicle Guide allows you to compare the environmental performance of cars before making a final decision.

Understanding what to look for when buying a used car can be one of the hardest parts of the buying process. Here are some things you should consider when you’re at a private car inspection.
  • Check the seats, carpets, and interior plastics for stains and damage.
  • Check the seatbelts’ locking mechanisms work.
  • Ensure mirrors, visors, and headrests are secure.
  • Inspect the panels for accident damage. Sometimes it’s not always obvious so look for larger than normal gaps between panels, such as around the bonnet and bumpers.
  • Check the paint for chips, fading, dents, and any signs of rust.
  • Ensure all doors, the bonnet, and the boot open and close smoothly, latch completely, and form a waterproof seal.
  • Check all windows fully roll up and down.
  • Examine the tyres (including the spare). The legal minimum tread for tyres in Australia is 1.6mm. Uneven wear can suggest misaligned wheels or a bent frame.
  • Look around, under, and inside the bonnet for coolant, oil, or power-steering fluid leaks. Coolant leaves light-coloured residue, usually around the radiator cap and on the radiator. You’ll often identify oil leaks from stains on the driveway or street under the car.
  • Check that the car starts immediately and without any loud or unusual noises.
  • Ensure all lights are working (including high beam and brake lights) and the exhaust fumes aren’t a strange colour, amount, or noise.
  • Check the dashboard while the engine is running and look for any warning lights indicating internal issues.
  • While driving, consider if the brakes and clutch are smooth. Is it easy to steer the vehicle? Is the engine running quietly?
  • Check that any additional features are working, such as air conditioning, stereo, phone pairing, cruise control, reverse camera, or automated parking.
  • Check that the vehicle identification number (VIN) matches the car’s registration papers. The VIN is usually found on a silver plate in one of the rear corners of the engine compartment.
  • Establish the ownership of the vehicle by checking the seller’s licence details against the registration papers.
  • Review the service history in the car’s logbook to see if any information is missing or incomplete.
  • Check to see whether the car has been previously written off, if the odometer reading is accurate, and whether the car has ever been listed as stolen. Some states require private sellers to give buyers a certificate of roadworthiness, so check your roads and automotive services beforehand.
  • Complete a Personal Property Security Register (PPSR) check for finance owing on the car. If the owner has money owing on the car, it may mean you as the new owner take on the debt.
If any of the tests don’t check out, you always have the option of walking away. One small indication of wear and tear can be a sign of more extensive and expensive damage, and after the sale you may end up footing the bill.
Once you’ve found the used car for you, it’s time to begin the purchasing process.
You can pay a small deposit to secure the car while you finalise the change in ownership. From there, agree with the seller on how to proceed with payment. Confirmation you’ve paid in full, such as bank transfer receipts, can help cover you in the future.

Insurance for used cars is important and you need to consider and review which insurance you may need.

Compulsory Third Party (CTP) Insurance covers your liability and the liability of anyone who drives your vehicle for injuries you or they may have caused to other road users in a motor accident. It’s required to register your vehicle. In certain states, CTP insurance may also offer limited benefits to the driver of your vehicle (including yourself) if injured but at fault in a motor vehicle accident. CTP insurance doesn’t cover damage to your vehicle, other vehicles, or property.

Comprehensive Car Insurance covers accidental loss or damage to your car and to other people’s cars or property. Third Party Property Damage Insurance covers accidental damage you cause to other people’s cars or property. If you’re using the car for work purposes, you may also want to consider Commercial Vehicle Insurance.

As CTP Insurance is part of the vehicle’s registration, it stays with a vehicle when it’s sold. Comprehensive Car Insurance and Third Party Property Damage Insurance remain with the policyholder. If you have comprehensive cover on an existing car, you’ll need to take out a new policy to cover the vehicle you’ve just bought.

If you aren’t sure whether you need Comprehensive Car Insurance or Third Party Property Damage Insurance, visit our car insurance comparison page to find the cover that’s right for you.

If the car is currently registered, the new owner must transfer car registration within 14 days from the date of purchase. If the car has been unregistered for more than three months, you’ll be left with the additional fee of re-registering.

Check the value of the stamp duty you’ll have to pay on the car by visiting your state’s roads and automotive services. Remember to also change any registration with Tolls and e-Tags.

When you’re picking up your car, ensure you’re receiving all sets of keys. Make sure all the registration paperwork is in order and all necessary signatures are received. Request the originals of all paperwork regarding the car – never settle for photocopies.
If you’re experiencing difficulties buying a car privately, you can also choose to buy a used car from a dealer. Dealers can provide instant information, transparency about the car, and help with finance and insurance. Even if you’re buying from a dealer, it can still be useful to consult this guide so you don’t miss any important questions or information. Alternatively, you can check out our piece for buying a car and selling a car.

This article has been prepared by Allianz Australia Insurance Limited ABN 15 000 122 850 AFSL 234708 (“Allianz”). Information contained in this article is accurate as at and may be subject to change. In some cases information has been provided to us by third parties and while that information is believed to be accurate and reliable, its accuracy is not guaranteed in any way.

Any opinions expressed constitute our views at the time of issue and are subject to change. Neither Allianz, nor its employees or directors give any warranty of accuracy or accept responsibility for any loss or liability incurred by you in respect of any error, omission or misrepresentation in this article.

Allianz acknowledges Aboriginal and Torres Strait Islander peoples as the Traditional Custodians of the lands on which we live and work across Australia. We pay our respect to First Nations Elders past and present.

Any advice here does not take into account your individual objectives, financial situation or needs. Terms, conditions, limits, and exclusions apply. Before making a decision about this insurance, consider the relevant Product Disclosure Statement (PDS)/Policy Wording and Supplementary PDS (if applicable). Where applicable, the PDS/Policy Wording, Supplementary PDS and Target Market Determination (TMD) for this insurance are available on this website. We do not provide any form of advice if you call us to enquire about or purchase a product.

Allianz Australia Insurance Limited ABN 15 000 122 850 AFS Licence No. 234708 is the insurer of any general insurance products offered, and Allianz Australia Life Insurance Limited ABN 27 076 033 782 AFS Licence No. 296559 is the insurer of any life insurance products offered. Each entity is responsible for any statements and representations made about its products, on this website.