Buying a used car can be a great way to upgrade the family car or add a new vehicle for a growing family without spending an arm and a leg. However, it’s not without its risks.

When buying a used car, it can be hard to track its service history, it might have unknown mechanical issues that aren’t covered by warranty, and you may not have as much choice as you would when buying new. To help you minimise these risks and find a car you love, we’ve put together five top tips for buying a used car.

1. Decide on your car budget

Before you look at a used car, you’ll need to have a good think about how much you want to (and can afford to) spend. Keep this number in mind when car shopping and set a hard limit so your budget doesn’t creep upwards.

When setting your budget, it’s also useful to think beyond the purchase price and consider the cost of running a car as well. These generally include petrol (the cost of which is currently a significant issue for many), regular servicing, consumables and repairs, insurance, registration and licensing.

As a guide to use for your budgeting, the average weekly spend for car travel costs for Australians living in capital cities is above $400 a week. Those who live regionally spend an average of $328.51 a week, according to the Q3 2021 AAA Affordability Index1.

2. Do your research

 Once you’ve set your budget, ask yourself what you need from your car. Are you looking for reliability, safety, the latest tech, a fun driving experience, cheap running costs, low emissions or luxury? Or maybe you want all of the above?

Once you’ve decided what you need, it’s generally a good idea to spend plenty of time researching your options. Take a look at used car sales websites and consider using their filters to find suitable vehicles - then once you’ve narrowed it down, it’s generally a good idea to read and watch online reviews of each vehicle you’re considering. This should give you an insight into how reliable the car might be, what it’s really like to drive, and its features compared to similar vehicles.

After you’ve got a few options, consider looking at used car websites to get an idea of how much that model should cost, keeping in mind age, trim level, condition and odometer readings.

3. Get professionals to check out the car and do a PPSR search

Found the car that’s right for you? Now it’s time to get down to brass tacks and organise an inspection. Unless you’re a car mechanic, it’s usually best to get a professional to inspect the car for you - they’ll know how to identify problems and provide an accurate report on the condition of the car.

Buying a used car carries some risks and booking an inspection can help mitigate some of them.

A good car inspection should take a close look at:

  • engine function
  • interior condition
  • evidence of accident damage
  • exterior and underbody condition
  • car history.

When booking yours, make sure they use qualified mechanics, and that the inspection includes a road test to check things like brake function and engine noise.

You might also require a road worthy certificate prior to registering your car (often referred to as a ‘pink slip’). The requirements in each State and Territory differ so make sure you check your local requirements. This will generally be explained on each of the Transport department websites.

As well as checking the roadworthiness of the car, it’s also important to check whether there might outstanding finance on the car.

There’s an easy way to check if your chosen car has any finance, by doing a search of the Australian Personal Property Securities Register. At only $2, it’s a cheap way to make sure that you don’t find yourself lumbered with debts that could see your car repossessed.

A PPSR search will tell you if the car you're about to buy has a security interest recorded against it. A security interest means the car could have money owing on it and could be repossessed from you even though you've paid for it.

4. Go for a test drive

If you’re happy with the car inspection, it’s time to arrange a test drive with the owner - this is your chance to double check the vehicle. During your test drive, here’s a checklist of items you could check, depending on the car’s functions:

  • Turning the air conditioner and radio on to check they work.
  • Checking if the transmission shifts smoothly.
  • Testing the brakes and listening for engine noise.
  • Trying window wipers, indicators and all other switches.
  • Connecting to the stereo Bluetooth.
  • Listening for knocks and rattles while driving.
  • Watching out for bad smells in the car, or stains on interior fabrics.

While it’s unlikely that you’ll pick up anything that your inspection missed, it’s always worth paying close attention during a test drive, just in case. This is also a great time to figure out if this really is the car for you - do you like how it drives, how the interior feels and how it looks?

5. Negotiating a price

When negotiating a price for a used car, always have you the price you want to pay in mind. To be fair to both you and the seller, your price should reasonably reflect the market price for your vehicle, based on similar vehicle makes, and models, mileage, and condition. Keep in mind the price you decided on when you did your initial research and remember what your budget limit is.

Try your best to be firm and confident and start with an offer that’s lower than what you’re willing to pay and gauge their reaction. If they come back with a price, it’s time to negotiate and consider slowly raising your offer by small increments. During this process it’s important to be prepared to walk away and remember that there’s always another car.

And remember, it pays to be polite and friendly. Buying and selling a car can be pretty stressful and it’s a much nicer experience for you and the seller if you’re both respectful. You never know, it might even get you a better price!

Consider your finance options with Qudos Bank

Paying for a car up front is an enormous expense, which could put a strain on your cash flow. If you need a little extra help to pay for your new wheels, consider your finance options with Qudos Bank.

Our car loans feature low interest rates, loan periods of up to seven years, $0 account keeping fees and quick, easy online application.



Car loans are subject to approval. Terms and conditions, normal lending criteria and fees and charges apply and are available upon request.

A maximum amount of $150,000 applies for vehicles up to 3 years old and $75,000 for vehicles between 3 and 5 years old.

The information in this article is of a general nature and has been prepared without considering your objectives, financial situation or needs. Before acting on the information, consider its appropriateness to your circumstances.

Before opening this personal loan with us, you should read our Financial Services Guide and to see our terms and conditions, call us on 1300 747 747.

Qudos Mutual Limited trading as Qudos Bank ABN 53 087 650 557 AFSL/Australian Credit Licence 238 305.



 Published June 2022