used car buying guide

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If you are in the market to buy a used car, this comprehensive guide will help you decide and to make a right choice.



    Your checklist for buying a used car

    If youre in the market for a car,you might want to consider aused car. You may be asking,but where do I start? UsingSavvys Comprehensive UsedCar Guide and Checklist, youllbe well on your way to gettingthe best used car.


    Why buy a used car?

    Where can I buy a used car?Homework and questions you must ask

    Test driving

    Organising financeGetting insurance

    Paperwork, stamp duty and the boring stuff

    Used car buying checklist






    About Savvy Finance 12

    Page 2

  • WHY BUY A USED CAR?Buying a used or second-hand car is one of the best ways to get onthe road. It's especially great when you dont want to spend toomuch on buying something new.

    This may be great for people on a budget, those who dont driveoften or for someone who is looking for their first car as a teenageror young adult.

    If youre an enthusiast, buying a used car is one of the ways youcan expand your collection. Some used cars may have after-marketmodifications which are more suited to your tastes.

    Buying a used car, even if it's less thana year old, works out much cheaperthan buying a fresh-off-the-lot new


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  • WHERE CAN I BUY A USED CAR?There are three avenues where you can buy a second-hand car alicenced motor car trader, or dealer, in a private sale or at auction.

    Buying from dealers are a safer option because allcars sold are given a cooling off period if youchange your mind, are guaranteed to be debt-free, and in some cases are certified used withan extended warranty. You will also get to inspectand test drive the car in most cases.

    Private sales do not have the same protectionsas dealers, but depending on who you buy from,you may get to test drive and inspect the vehicleclose up. Since youre dealing with the sellerpersonally, he or she may know the history ofthe car better than a dealer or auctioneer.

    Auctions are good for saving money, but in mostcases you will not be able to test drive or inspectthe vehicle before you bid. Some auction housesare less reputable than others and may not evenprovide a proper roadworthy certificate. Auctionsare best if you know exactly what youre lookingfor, or are a long-time motoring enthusiast.

    Licensed Dealer

    Private Sale


    Page 4

  • HOMEWORK & QUESTIONS YOUMUST ASKOn the Savvy Blog, our CEO Bill Tsouvalas always says do yourhomework! and researching used cars is no exception. Asking theright questions will save you from buying a "lemon" or paying morethan you should have for a used car. You should always ask:








    How many owners has this car had?

    Does this car have any existing damage, or has it ever been repaireddue to an accident or incident?

    How many kilometres does it have on the odometer?

    Does the car's internals have any problems, such as the wiring orfuses?

    Is the car still registered? (More on that in the "paperwork" section)

    Why are you selling this car?

    Show me the roadworthy certificate, log books and registration papers

    Take a printout or copy of the advertisementwith you to make sure everything matches up.

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  • Once you have an idea of what the car's condition is, you shouldlook up similar prices in an auto trade magazine or is the best place for independent car evaluations.

    With this in mind, you can make an informed decision on whetherthe car being sold is at a reasonable price. You should also go tothe dealer, private seller or auctioneer (that is, if the auctioneerallows you to) and inspect the car, inside and out.

    Look for dings, bumps, flood damage and obvious body repair.Look for buildups of engine oil or rust. If you're scared you aren'tknowledgeable enough to conduct your own inspection, bring afriend or relative or arrange your own independent inspection fromone of your state or territory automotive associations.

    On a safer side, you should also check the serial numbers on the to make sure you arent buyinga write-off or a stolen car. And of course, you should test drive thecar.

    Write down the Vehicle IdentificationNumber (VIN) to check your car hasnt

    got a troubled past.


    Personal Property Securities Register

    Page 6

  • TEST DRIVINGAt the very least, you should test drive any car you hope to own.This way, you'll find out how well it handles on the road. Don't justtest it in "normal" conditions - arrange a test drive in a low-trafficarea or private lot so you can check how it runs non-typicalsituations, such as tight corners or its performance over 100km/h.

    Let it sit, to hear if the engine rattles or struggles during idling. Youshould also test electrics and mechanical functions, such as:

    The radio/audio system

    Steering-wheel alignment

    Brake wear and tearAir conditioning/climate control





    Smoking or sputtering exhausts5

    Power windows and other accessories6

    Headlights, blinkers, hazards and fog lamps7

    If any of these don't work or don't work as intended, you'll be ableto figure all that out before you buy instead of getting a nastysurprise. Page 7


    Taking out a car loan through a broker is a better choice. Brokershave years of industry experience, more products available andaccess to a wide range of lenders competing for your business.Savvy Finance + Insurance works with multiple lenders acrossAustralia to secure the best deals on car finance for you.

    After you've agreed on the price, deposit, and date of collection,you should organise your finance. If you already have the moneywithout the need for taking a loan, you should ask if you can paywith a bank cheque, cash or any other method you prefer.

    Many dealers offer finance when you buy used orcertified used. You should be careful though - manylow or "zero" percent finance rates may actually costyou more in the long run.

    If you're unsure about how much you can afford, usinga repayment calculator is a trusted and easy way tofigure out what you can expect to pay each month,fortnight or week.

    It's a common misconception that you need ask abank for a loan. There are many lenders and brokersout there which you can find online. You should alsoconsider getting a credit check to sense yourborrowing position. Page 8

  • GETTING CAR INSURANCEAfter you've got your finance sorted, you will need to take out aninsurance policy. You will need to know what make, model andyear the car is before you get started.

    Savvy offers a range of insurance options to secure your vehicleinvestment.

    Car InsuranceIf you're on the road you need car insurance in case of accidents, theft orproperty damage. Savvy can connect you to many of Australia's leadingcomprehensive car insurance providers. Pick and choose options such asroadside assist, free hire car during repairs or a lifetime Rating 1.

    Loan Protection

    Tyre & Rim Insurance

    GAP Insurance

    Vehicle Warranty

    Loan Protection insurance makes sure you can pay back your loan whencircumstances don't allow you. This may be caused by extended illness, injuryor sudden retrenchment or redundancy at work.

    Most comprehensive car insurance policies don't cover broken rims or blownout tyres. Tyre and Rim insurance covers all tyre and rim damage. Somepolicies offer hotel stays and hire cars when incidents occur away from home.

    Gap or Motor Equity Insurance covers the "gap" if your car is written off and thepayout is less than your amount owed on the loan. Some policies cover excesspayments and replacement vehicle costs.

    Some dealers and brokers offer an extended vehicle warranty, which maycover basic repairs, mechanical failures or scheduled servicing within a set timeperiod. Ask a dealer or broker for more information.

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  • PAPERWORK, STAMP DUTY ANDTHE BORING STUFFOnce you've inspected the car and had a test drive, now comes theboring stuff. First, you should sign a statement that includes theagreed price, deposit and date of collection. Once that's done andyou've got your finance and insurance ready to go, you'll need totransfer the car registration and pay stamp duty.

    If the car is not currently registered, you will have to register the carat your state or territory road and traffic authority.

    You must pay stamp duty when purchasing a motor vehicle. Itdoesn't matter if the car is new, used, bought at a dealer orprivately, you will have to pay stamp duty of some kind.

    A dealer will collect your stamp duty along with other charges whenbuying a new, certified used or used car. In a private sale, you mustcalculate the stamp duty yourself and pay it to your states revenueoffice.

    Here are links to all the state and territory stamp duty calculators: Page 10

    New South Wales Motor Vehicle Registration Duty CalculatorVictoria Motor Vehicle Duty CalculatorQueensland Vehicle Registration Duty EstimatorTasmania Motor Vehicle Duty CalculatorWestern Australia Licence Duty CalculatorSouth Australia Stamp Duty Calculator (Non-commercial vehicles)South Australia Stamp Duty Calculator (Commercial vehicles)Northern Territory Motor Vehicle Revenue Duty CalculatorAustralian Capital Territory Motor Vehicle Duty Calculator



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