SJ Financial

Buying a used car: why you need to know its history

Written by Sandra on Mar 12, 2019

When buying used cars in the past, you typically had to trust that the previous owner had fully disclosed the history of the vehicle. Unfortunately, cars can have several previous owners, so the information you are given might not be completely accurate.

 

But there are a number of checks you should do before you part with your hard-earned money. Here is our quick guide to understanding a car’s history, including important background checks, and the benefits of purchasing through a licensed dealer.

 

  • Ensure that the car has a service history

This will reveal what work has been done and where it was repaired. You should ask to view the vehicle’s log book, making sure the details in it match those on the car, such as the V.I.N. and registration number.

No log books? You can check the National Vehicle Security Register (NVSR).If a vehicle has been into a Participating Workshop the details about Mechanical, Paint & Panel, Auto Electrical repairs and more are available online. You can check this for free, but the report will only show you when the vehicle was repaired at a NVSR workshop. So, if it comes up clean, it might simply mean that it’s been repaired elsewhere.

 

  • Check the Personal Property Security Register (PPSR)

If buying privately, this is a great online tool to determine if there is any money owing on the vehicle you’re interested in purchasing. A PPSR search may also return other useful information including details about the cars description, registration (plate) information, and if it’s been previously written off (known as a repairable write-off) Most buyers are unaware that a vehicle’s value will reduce by up to 50% if it’s a repairable write-off, which is why it’s so important to do this check. 

 

The search certificate will also provide information about the vehicle's identifying numbers that will help to confirm it's the correct vehicle. If there is money owing on the vehicle, & the seller stops making payments it is highly likely that the finance company listed will repossess it.

 

It’s fine to buy a vehicle that has money owing on it, however, as a buyer, your best option is to request a formal payout letter from the vendor and make the payment for the car directly to the financier to clear any encumbrance on the vehicle. If the payout figure is higher than what you’re paying for the car, the vender will need to clear the difference first. Always ensure this is done before the transaction is complete.

 

Unless you obtain a PPSR Certificate, you will have no way of knowing if any of these things have occurred. And if they have, it could cost you thousands of dollars. So, for a very small fee and a few minutes of your time, it is well worth the effort when buying a car privately.


  • Buying from a dealer

There are laws that protect consumers when they purchase from a licensed dealer, which don’t apply to private sales. Buying from a licensed motor dealer ensures that you are covered under Australian Consumer laws and that you can be sure of ownership.

 

With this in mind, the safest option is generally to purchase a used vehicle through a licensed dealer, rather than a private seller. If, however you choose to purchase a car privately, we recommend paying for a full PPSR certificate so that you receive an accurate report of the car’s history.

 

At SJ Financial Services, we deal with a number of lenders and can arrange the best loan to suit your needs. If you’d like any help with purchasing a used vehicle, contact us today.

 

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