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Buying from a licensed used car dealer (LMCT) has advantages for many buyers. Each state has statutory requirements to provide some form of warranty depending on age and mileage. You'll be able to trade-in your old car. The car is more likely to be properly prepared for sale in roadworthy condition. You will have ample opportunity to inspect and drive the car prior to making your decision. You have numerous legal rights including a "cooling-off" period in some states. The dealer is subject to much tougher laws than private sellers and stand to lose their livelihood if they break the law. Licensed dealers can be more realistic about price than private owners. In most states, the dealer also guarantees title which takes the risk out of buying a stolen car or one where finance is still owing. Franchised dealers (dealers with a new car franchise) usually have the pick of the best trade-ins and have access to internal factory auctions for near new executive cars and company fleets. Some so called "program cars" can be ex-rentals but if they are maintained properly they can be your best chance of getting into a near new car. In most cases, these dealers can also offer an extension of the factory warranty. FLEET SALES As more employees opt for a company car as part of their salary package, more companies are outsourcing their company car requirements to specialist fleet management companies. By cutting out the middleman and selling direct to the public, these fleet management companies try to improve on the auction price while selling under dealer retail. These companies can be a good value source of near new cars especially if the car is still under new car warranty. Be aware that many company cars are turned over quickly because of severe use and the stock may already have been picked over by the trade and other internal buyers. AUCTION An auction can be the cheapest place to buy a used car -- and consequently is also the place where you are likely to get the lowest price if you sell. You have fewer rights at an auction, so it's not a place for the inexperienced. It is essential you do a trial run before trying to bid, and a good idea is to take someone who knows about motor vehicles. Simple rules you should never forget when bidding at auction: Decide on a maximum value for a vehicle and don't bid past this. -Some vehicles are "Sold as Seen" which means you take all the risk. Cars that would fail an extended road test are often sold at auction. -Understand the auctioneer's terms and conditions before you bid! Check whether a purchase is subject to auctioneer's fees. -Visit the auction house when everything is quiet and find out as much as you can about each car that meets your requirements before the actual auction. Narrow down the cars you intend to bid on. -Usually, you will need to get the roadworthy certificate and in some cases will need to re-register the vehicle. Allow for this in any bid. -Some auctions set reserves that are not much cheaper than a dealer. Is there enough margin to cover the extra risk? -Cars with balance of new car warranty can lower the risk. PRIVATE SALE If paying for the services provided by a dealer doesn't really appeal, there's always the private route. The major benefit when choosing this source is that prices are generally cheaper and you can meet the previous owner. It is also the one of the few sources of older used cars when there is not enough margin for a dealer to cover preparation and statutory requirements. Buying privately means exactly that, genuine private vendors selling a privately owned car. However, certain unscrupulous "traders" and individuals may pretend to be private sellers to avoid their legal obligations and in some cases, may be acting as a disposal conduit for trade-ins too old or not good enough for a used car outlet. If a car seems too cheap, it is too cheap, so look for the reason. Thieves and backyard repairers pick popular cars and price them cheaply so that buyers rush in and don't ask questions. The Australian private used car market carries a high risk of purchasing a re-birthed stolen car. There is also a good chance of buying an insurance write-off that has been put back on the road after repair short-cuts have been carefully concealed. Until new data collection systems are fully linked across Australia to close these loopholes, private buyers need to be extra careful. If you choose to buy privately, you are buying outside the consumer protection that applies to a dealer. The checks that a dealer is compelled to make by law are of no benefit in a private sale. KNOW THE SCAMS It helps to know the scams. The thieves are so organized that they will steal a car to match the exact specification of a wreck they have purchased at auction. After transferring the identity of the wreck to the stolen car, the stolen car is re-registered as if the wreck had been repaired and legitimately put back on the road. As state wreck registers close this scam, stolen cars are being dismantled to rebuild wrecks that escape the system. A registration check may show a gap in the car's registration but if this was done interstate, registration gaps will not show up. Cross-referencing the car's numbers with your state's Wreck Register is a good start but until a national link is fully functional, this check is not infallible. Any gaps in the car's history that cannot be explained must be investigated as they could indicate a car that has been stolen or off the road for a major repair. Near new cars that are missing owner's manuals and service histories that cannot be verified by a service centre should generate alarm. |
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