Before buying a second hand car, it is important to do your research. This includes checking whether the car has any debt owed on it and whether it has been involved in a car accident.
There are many online resources available that can help you prepare for buying a second hand car. However, sometimes even the most prepared buyers find themselves with a problematic vehicle.
If you’ve purchased your vehicle from a used car dealer, it is much easier to get your money back or have the car fixed than if you’ve purchased through a private seller. Purchasing through a private seller can be risky. However, this doesn’t give private sellers the right to defraud you and there are some (limited) options if you’ve bought a faulty or encumbered vehicle from a private seller.
Buying a second hand car from a private seller
Under the Australian Consumer Law, a second hand car bought via private sale is covered by guarantees as to:
- Clear title,
- Undisturbed possession, and
- Undisclosed securities.
‘Clear title’ means that the seller has full rights to the vehicle, including the right to sell the vehicle, unless they notified the buyer beforehand that they didn’t have full rights (for example, there was money owing on the vehicle).
‘Undisturbed possession’ means that no one will try to take the vehicle from the buyer or stop them from using it unless:
- The buyer hasn’t met their obligations under the contract (for example, they haven’t paid the full amount owing under a car loan), or
- The buyer was aware that the seller only had limited title to the vehicle (clear title).
‘Undisclosed securities’ means that the vehicle isn’t subject to hidden charges or securities, such as a car loan, unless:
- The security or charge was placed on the vehicle with the buyer’s permission, or
- The buyer was notified of the security or charge in writing before they bought the vehicle.
Note that a seller who makes it clear to the buyer that there is limited title on the vehicle before selling it can claim to have disclosed all known securities or charges.
In addition to the Australian Consumer Law guarantees explained above, private sellers are also bound by common law contract requirements. In particular, private sellers can be liable for misrepresentations they make about the vehicle that the buyer relies upon.
What does this mean? The private seller cannot lie to you or deliberately or negligently omit important information about the vehicle that is relevant to your decision to purchase the vehicle.
Buying a second hand car from a dealer
There are more guarantees that bind motor dealers than private sellers, giving the buyer more security if something goes wrong.
In addition to the Australian Consumer Law guarantees of clear title, undisturbed possession and undisclosed securities explained above, car dealers are also bound by the guarantees that:
- The motor vehicle is of acceptable quality (which can depend on the age and nature of the vehicle),
- The motor vehicle is reasonably fit for the purpose specified during sale,
- The description of the motor vehicle is accurate,
- The motor vehicle sold will match any sample or demonstration model, and
- Any extra promises (express warranties) will be satisfied.
‘Acceptable quality’ means that the second hand car is:
- Safe and long-lasting,
- Looks acceptable, and
- Does all the things that a person would normally expect a vehicle of that type to do.
Under the Australian Consumer Law, car dealers are also prohibited from:
- Misleading or deceptive conduct,
- Making false representations (statements or claims about the vehicle), and
- Unfair contract terms.
The second hand car buyer’s options
If you’ve bought a problematic second hand car through a dealer and they don’t want to cooperate with you, you can contact the relevant department of Consumer Affairs or Fair Trading in your state for assistance.
If you’ve purchased a second hand car from a private dealer, it is a good idea to seek legal advice. A lawyer can help you to draft a letter to the seller and/or take further legal action such as rescinding the contract (getting your money back) or suing for damages.