Buying from a licensed dealer is the safest way to purchase a used car and provides a number of benefits compared to buying from a private seller. Some of the main advantages include:
Guaranteed clear title
When buying a second-hand vehicle from a licensed motor dealer, they must guarantee a clear title. This means that you can be certain the vehicle does not have any unpaid debt attached to it.
Private sellers are not obligated to disclose if there is outstanding finance on the car, resulting in many buyers being unaware of what they are getting themselves into and a high risk of financial loss. Find out more information HERE
Warranties and guarantees
In certain circumstances, you are entitled to a warranty at no extra cost when you purchase a second-hand vehicle from a licensed motor dealer. This is referred to as Statutory Warranty, which protects you from financial loss if the vehicle is faulty.
Dealers must advise you if a vehicle does not come with statutory warranty by clearly stating it in advertisements, putting a notice on the windshield or price tag, placing signs at the entrance of the dealership, or giving you a notice.
Further to statutory warranty, the law automatically gives you rights when you purchase goods and services, including vehicles. These are your consumer guarantees. You will be guaranteed that the vehicle is of acceptable quality, matches the description given and is legally available for the business to sell, among a list of other assurances.
Read more about warranties and consumer guarantees for used cars HERE.
Private sellers are not bound by consumer guarantees and you will not get statutory warranty. You will also not receive any after-sale service or extended warranties.
Cooling-off period
When you buy a used vehicle from a licensed motor dealer, you get a cooling-off period of one business day, during which you can change your mind about the purchase. A motor dealer cannot refuse to grant you this cooling-off period.
After you sign the contract, the cooling off period will end either on the dealer’s next business day at 5pm, or, if the dealer closes before 5pm, the following business day at their usual closing time.
You can choose to drive away with your vehicle during this time, however, you will lose your right to the cooling-off period. You will still get the cooling-off period if you take the vehicle for a test drive or to an independent mechanic for inspection.
You are not entitled to a cooling-off period if you purchase a used vehicle privately.
Vehicle history and condition
Dealers are obligated to share all relevant information regarding a vehicle’s history, such as whether or not that vehicle is listed on the written-off vehicle register. Dealerships and businesses must also ensure that any recalls have been repaired/replaced prior to the sale.
Private sellers don’t include this kind of security because they’re not bound by the same strict laws that dealerships are. The onus is on the buyer to conduct a vehicle history check and ensure the vehicle is not stolen, has money owing on it or has been previously written-off.
Read more about repairable write-offs HERE.
Complaints and claims
Should any issues arise with the vehicle or dealership itself, you can contact them directly, complain to the industry body or lodge a formal complaint with the Office of Fair Trading. And, if you suffer a financial loss because of the actions of the motor dealer or their employee, you may be able to make a claim against the Office of Fair Trading’s Claim Fund.
When buying a used car in a private sale, you don’t have these same protections. If something goes wrong with the car after you’ve taken possession of it, it can be very difficult to make the seller responsible for the defect, leaving you with the short end of the stick.
Other benefits
Other benefits of purchasing from a licensed motor dealer may include financing options, the ability to trade in your current vehicle, as well as a knowledgeable sales team to offer advice and information on your potential vehicle.
Buying privately
When you purchase a vehicle from a private party, you will need to take extra care. While often it can be cheaper than buying from a licensed dealer, it carries a lot more risk.
When you buy privately:
- You are not entitled to a cooling-off period
- You will not get a statutory warranty
- The seller does not have to guarantee a clear title or provide you with a PPSR certificate.
- The seller is not bound by the same laws as licensed dealers.
- You will not be able to make a claim for compensation if anything goes wrong or you lose money.
Before you buy a used car privately, you should check its history for any problems that could put you and your money at risk. To protect yourself, we suggest buying from a licensed motor dealer.
How do I know if a dealer is licensed?
All motor dealers in Queensland must have a licence to sell. You have the right to view their licence document, which the dealer must show you at your request. You can also check their licence online by searching the name or licence number. Visit www.qld.gov.au/fairtrading to check the free licensing register.
Deal with someone you can trust
The Motor Trades Association of Queensland (MTA Queensland) is the peak body representing the interests of employers in the retail, service, and repair sectors of Queensland’s automotive industry. Look for members displaying the MTA Queensland logo to provide reassurance that you are dealing with someone you can trust.
Find an MTA Queensland member HERE.
Want to learn more? Get accredited now!
The MTA Institute (RTO No.31529) provides nationally accredited motor vehicle dealer and salesperson courses. Complete the latest AUR modules and learn a range of new skills including how to interact and sell to customers, comply with legal requirements, and exercise safe working practices.
CLICK HERE FOR MORE INFORMATION
3 February 2022
Please note the information contained on this page is general in nature and does not take into account your specific needs or circumstances. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.