Buying a Used Car in Australia

by BobinOz on March 13, 2013

in Life in Australia

Used cars for sale 480x283 Buying a Used Car in AustraliaFirstly, if you don’t already know, used cars here in Australia are not cheap. For more details on that, check out my post Buying a Car in Australia. What’ll it Cost? Having said that, somebody made a very interesting comment somewhere on this website saying how great it was used cars here in Australia retain their value so much longer.

See, there’s always two ways of looking at things.

Anyway, a few weeks ago I wrote a post called Driving in Australia: Know the Law; if you read that post you will know that one of those strange laws is to do with selling a car here in Queensland.

Those of you who did read the post will also have known I was selling my Jeep; you’ll be pleased to hear it is now sold. As a result of that I can tell you about another strange law, this time about buying a used car in Australia.

Before I do that though, I do understand that some of you having read the title of this post may have been hoping for some helpful tips when buying a used car in Australia. I was tempted to write such a post, but it’s been done so many times before by people much smarter than me.

If it’s these sorts of car buying tips you need, I suggest going to Google Australia and search for “tips buying used car“.

I did and I got results from two of Australia’s largest online car sales websites, more tips from Choice, Australia’s consumer magazine, tips from the RAA (Royal Automobile Association) and the RAC (Royal Automobile Club) all on the first page of big G, so I don’t think you need any more tips from little old me.

That said, I am going to give you one tip towards the end of this article, but first that strange law.

Goods and Services Tax

Or GST as we call it here. This is Australia’s equivalent of VAT in the UK and Europe and probably sales tax in the USA.

Here’s the rule in a nutshell. When you buy a car from a private seller, there is no GST to pay. When you buy a car from a car dealer who is registered for GST, and he will be if he sells enough cars to actually make a living, then GST has to be added to the price.

  • So if a private seller wants to sell a car for $10,000, that’s what he sells it for.
  • If a dealer wants to sell a car for $10,000, he sells it for $10,000 plus $1,000 GST equals $11,000.

I’m sure you can see that this makes for a very uneven playing field between car dealers private sellers.

It gets worse for the car dealer.

When a car dealer sells a car he has to provide a warranty, he has to guarantee the car is free from finance, hasn’t been a write off or been stolen. If he is advertising it as “Drive away, no more to pay” then he also has to pay the 3% car tax to the government and make sure it has valid registration (rego).

A private seller doesn’t need to do any of this, so at the VERY minimum you will have to pay that 3% car sales tax to the government. So now you’re $10,000 car purchased privately has already gone up to $10,300.

That narrows the field slightly, but not enough. That leads me to…

Bobinoz’s one and only used car buying tip

In all the time I lived in the UK I never, ever bought a car from a car dealer. When I arrived in Australia in 2007, one of the first things I needed to do was buy a car. I pretty much ignored dealers and bought my Jeep privately, I’m pleased to say that did work out for me.

This time though, when searching for another car to buy online, I decided to look at both dealers and private sellers. Given the advantages private sellers have over dealers you’d think that wouldn’t change for me this time round and I’d still be buying private.

Well, I can tell you that for the first time in my life the car I just bought, a Nissan X Trail for those who would like to know, came from a dealer.

Why?

  • I got the peace of mind a dealer warranty
  • I got 6 months car registration fully paid
  • I got the 3% car tax paid, nothing more for me to pay
  • I was guaranteed the car was free from finance/not a write off/hadn’t been stolen

And here’s the biggie for me…

  • Car dealer prices for the cars I was looking at were, for the most part, the same or cheaper than private sellers.

The car I bought was not available privately from anyone else any cheaper.

Gosh!

I could have given plenty of examples here, but it seems a little pointless as these things change daily. What was for sale when I looked, won’t be for sale when you look.

But I will tell you I looked at Nissan X Trails, Honda CRVs, Hyundai Tucsons, Ford something or others and all sorts of 4×4’s in the price range of $15,000-$20,000 and time and time again, dealers were the same as or cheaper than the equivalent cars being sold privately.

I’m not suggesting this is an unbreakable rule, I’m not saying this is a theory I will stand up and defend until the cows come home, but what I am saying is this…

If you’re looking to buy a used car, don’t discount getting it from a car dealer, even if you’ve never bought one from a car dealer before.

I don’t know why this appears to happen, how it can happen or if  it was just a fluke for me. But I did look at lots of different cars over several weeks and it was happening all the time.

Anybody else experienced this? I’d love to hear your views, please feel free to comment below.

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{ 16 comments… read them below or add one }

Greg March 15, 2013 at 8:14 am

Yes my used Ford Escape was cheaper from the dealer in South West Sydney than anything I could find privately in North West Sydney.

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BobinOz March 15, 2013 at 2:17 pm

Strange, isn’t it? Thanks Greg!

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Nigel March 19, 2013 at 10:38 pm

100% in agreement with you Bob that has been our experience so far with cars nearly 2 years on. Your website is great, informative and helpful for us while we were in planking stages

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BobinOz March 20, 2013 at 12:38 am

I wondered if it was just one of those things at the time, but it sounds as though it wasn’t. Thanks for your feedback Nigel.

Bob

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aLouisianaYankee March 22, 2013 at 3:32 pm

Hey Bob, great site. Unfortunately, I had a very different experience buying from a dealer, and a good one privately. Too many lies; felt just like buying a used car in the states. I am fairly new to Oz. I wrote about it on my blog, ALL the details, which most people probably can’t take the time to read; http://www.alouisianayankee.com/stories/buying-a-vehicle-in-oz/

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BobinOz March 22, 2013 at 9:22 pm

Always interesting to hear other people’s experiences Louisiana Yankee, sorry you had a bad one buying a car from a dealer. I did click through to your website, wow! That really is a long article :-)

As you predicted, I didn’t have time to read it, but as it is with anything in life, I’m sure there are good car dealers and bad car dealers as well as good private car sellers and bad private car sellers.

As they say, “buyer beware”.

Cheers!

Bob

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frank oghenemaro March 23, 2013 at 6:17 am

i have go through your price list for already use car in australia

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Rosanne February 14, 2014 at 1:29 am

Hi Bob,
Me again, just coming up in a different area this time. I was wondering have any of your readers brought their car with them when moving and how did this work out for them, cost and convenience wize?? I have a 2011 Peugeot 5008 people carrier, in good nick with nice bell and whistles and fully serviced and one lady owner, me!!! If I sold it here(Ireland), I’d prob get about € 18,000 for it, which when you convert it won’t buy you a hell of a lot on Oz. But, would it be worth taking it with me despite what it might cost to do so?
I f anyone has moved their car, I’d love to hear about their experiences.
Thanks,
Rosanne.
PS Vetassess prac interview coming up so getting closer!!!

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BobinOz February 15, 2014 at 9:02 pm

Hello you again :-)

I don’t know of anyone who has imported their car here, but I do know of three people who seriously thought about it and then looked into the costs. Then they all changed their minds.

Not only do you have the cost of shipping, you have import tax on the car and you may even have to go through a safety inspection of the car to see if it meets Australian standards. I’m not sure what else is involved, but I do know that the costs and the work involved were enough tomake the people I have mentioned forget it.

On that basis, my guess is it’s not worth it, but like yourself I’d love to hear from anyone who has done this and whether they thought it was a good idea.

Cheers, Bob

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Rosanne February 17, 2014 at 2:13 am

Bob,
Thanks for that. Saves me doing a lot more research into it.It makes sense really.
Talk soon,
Rosanne

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christine June 8, 2014 at 12:21 am

My daughter imported two cars to Sydney from the UK 8 years ago and found it a very expensive business. Apart from having to hire a car for the very long time it took to get the cars there, there were then things that had to be changed and fitted to comply with Aussie legislation at additional costs. It was weeks before they got their cars. There were also of course import taxes and various other charges. The cars were only a couple of years old at the time and they were struggling to sell them here in time so took them with them. They were transported on an open deck so nothing was allowed to be stored in them. If they had gone in a shared container then they could have been filled with bits and bobs. Finally when they came to sell them in Sydney they were undervalued as they were imports. She has advised us to sell our car here in the UK and purchase a car in Australia. Hope that helps.

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BobinOz June 10, 2014 at 12:51 am

Great information Christine, and backs up exactly what I’ve been saying. It simply isn’t worth importing a car here in Australia. The only time it’s worth it, as far as I can see, would be for a classic car.

Looks like your daughter got penalised at every corner, even at the point when she finally wanted to sell them. Imported cars never sell well, that’s even true in the UK.

Cheers, Bob

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Sat August 25, 2014 at 3:59 pm

Nice article Bob…Really enjoyed reading it.

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BobinOz August 25, 2014 at 9:57 pm

Thanks Sat :-)

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Alexander September 23, 2014 at 3:48 pm

Compared to this http://kolesa.kz/cars/nissan/x-trail/, are used cars cheaper in Australia than those in Kazakhstan, based on the year of manufacture?

Customs and economic union with Russia made car prices surge after 2007.

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BobinOz September 23, 2014 at 7:29 pm

If you visit my page called The Cost of Living in Australia of Everything you will find a link to an online car sales website, you can do some comparisons of your own. Hope that helps, cheers, Bob

Reply

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