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Buying a used car from a dealership versus a private seller

With the advent of online shopping becoming the norm due to its convenience and ease of use, many people are turning to marketplaces to purchase used cars.

A buyer factsheet released by the NSW government and NSW Police Force informs buyers to be more vigilant when perusing these digital marketplaces as scammers and thieves tend to use them.

Using common sense is important when dealing with online buyers. There are some things to keep front of mind when looking at purchasing online:
If it seems too good to be true, it probably is.
Only use trusted websites as some scammers will set up fake websites to trick people into buying products that don’t exist.
If you plan on meeting in person, arrange it so that it’s in a public space with a lot of people. If you can, bring a friend or family member with you.
Don’t send money to people you don’t know. It’s best to have face-to-face meetings for these transactions to take place.
Always conduct transactions in person and with cash. Or use payment methods that have buyer protection like PayPal or Afterpay.

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When you want to purchase a new car traditionally you could only do so at a dealership, however with modern innovations, some car makers allow you to purchase new cars through their website like Tesla, Polestar and Hyundai’s electric cars.

While it is convenient to use online private sellers, one must be cautious because you might not get what you’re looking for.

The listed price of private used cars online is more of the seller’s expectation and not the true market value. As a result, sellers may be more rigid when negotiating the price of a car. However, if the seller needs to sell a car urgently, the price may be lower, or the seller may be more willing to negotiate.

While there are hazards when purchasing anywhere, it is riskier online as consumer laws don’t extend to private sales. When you purchase from a dealership, there is a cooling-off period whenever you sign a contract for sale after three days. If there is an issue with the car, Australian Consumer Law will cover you and any manufacturer warranty if applicable, whereas the same cannot be said for private sales. Extra care and vigilance are of great importance when purchasing privately.

Another risk to be mindful of is odometer tampering, which is more prominent in online private seller listings. If the odometer doesn’t match the condition and age of the car, ask the seller about it, and arrange an inspection of the car. Motoring associations across Australia can conduct inspections of any car you’re considering for a fee, saving you from purchasing a potential lemon.

The NSW government’s free odometer reading tool is another alternative that lists the last three annual odometer readings of any vehicle in the state, which can be found on the Service NSW website.

Additional safety steps that should be done include:
Make sure no money is owed on the car.
The odometer is correct.
Organise a private inspection by a third party.
Verify the build and compliance dates given by the seller.

Another item to add to your checklist when purchasing privately is to go for a Personal Property Securities Register certificate search on the car. If it’s not done, you won’t know if there is money owing on the vehicle or if it’s stolen or written off.

Private sellers must report if the car has been written off, however, if the car has already changed owners, it’s unlikely that the current owner will know that information.

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Buying from a dealership

When purchasing a car from a dealership it is often a more straightforward process as selling cars is what they do daily. Often the process will be easier compared to purchasing privately as they will handle the paperwork including the transfer of title.

Other benefits of purchasing a used car from a dealership include:
 – More laws to protect buyers.
Dealers have to provide a full history check and are more transparent with any concerns to protect their reputation.
Will conduct their own inspection and carry out repairs if necessary.
 – Can provide extras like roadside assistance or extended warranty on top of the compulsory warranty from the car manufacturer, if it’s applicable.

There are some downsides to be mindful of when purchasing a used car from a dealer, including:
Charging higher prices to ensure they make a profit from the car.
Dealing with a full sales team that might try and upsell by using pushy tactics.

There are pros and cons to purchasing used cars from either a dealership or a private seller. It’s always best to be vigilant and conduct your own research and checks on potential cars so that you are not being taken advantage of. 

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