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Tuesday, April 23, 2024

Buying or Selling a Car in Australia? These are regulations You Should Have in Mind

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After a couple of years of issues and downward trends, the Australian used car market is finally going back to normal and is even projected to score a considerable rise by the year 2027. This is, by all means, great news since, even though everyone likes a new ride, the used vehicle market does offer more flexibility and more approachable prices for an average consumer. Keeping that in mind, though, it should be pointed out that all car sales in Australia are regulated by the general Australian Consumer Law. So, the rules are definitely present, and making any sort of mistake can cause serious fines that can undermine whatever benefits you were trying to get on the second-hand market. Let us take a look then at a couple of general guidelines that will save you from these costly oversights.

The legal channels for trading vehicles

Secondhand vehicles can be traded in various manners, but all these transactions can be generally assigned to one of the following legal channels.

Private sales

This form of trade gives both involved parties more room for negotiations and skips some of the pesky legal procedures. On the other hand, this form of trade features no assurances from the dealer or consumer watchdog groups so the responsibility to make a proper judgment is put entirely on the shoulders of the consumer. Also, eventual disputes are not regulated under the general Fair Trade regulations. Fortunately, consumers can pay the money owed on the car in question through the open Personal Properties Securities Register.


Auctions usually put out vehicles at bargain prices, they are regulated by the Australian Consumer Law, and the dealer has to make sure the vehicles feature no money owing. On the other hand, buyers will not have an opportunity to try out the vehicle, the buyer has to arrange an inspection on the day of the purchase, and the seller is not required to issue a warranty. Also, the vehicle must have a pink safety inspection slip issued by Authorised Inspection Station (AIS) that will determine that vehicle is fit for registration and not older than one month. This slip must be displayed on the vehicle during the sale.

Online marketplaces

If you are wondering who would buy my car in Sydney, putting the vehicle in one of the online marketplaces is probably the best way to find that out and quickly get in touch with numerous buyers looking for that specific model. The thing to consider here is that online sales are not treated as a separate form of trading. While they are covered by the Australian Consumer Law more specific rules will outline either by type of trade (private sales, dealerships, etc.), or state laws. If you are trading outside your native state, this fact can cause some confusion and discrepancies.


By Australian law, professional dealers are all parties that have bought, sold or tried to perform at least four such transactions during a period of 12 months. So, whether you are buying or selling, do your best to keep this regulation in mind.

With that said, the official dealer must be able to provide:

  • The registered business name
  • A statement about liability
  • The cash price of the vehicle that includes non-prescribed fees
  • The name and address of the last owner or lessee
  • Accurate vehicle info and the year the car was first registered
  • The reading at the odometer at the time the car was purchased from the previous owner.

It is also a common practice for dealers to include some form of limited warranty. For instance, under the NSW Fair Trading Law, the dealer’s guarantee for a vehicle that is less than 10 years old and has passed less than 160,000 is limited to three months or 5,000 km after purchase, whichever comes first. This trading model is, by far, the most regulated and protects the buyer to the highest possible extent. Buyers are also usually allowed to trade in their old vehicles, which gives them more flexibility. On the other hand, going through dealerships somewhat limits the car choice and, as you can imagine, ramps up the price of used cars. Also, it should be pointed out that, under general Australian Law, buying a car from dealerships also gives consumers an option of one business day Cooling-Off period in which they can return the car with no extra fees. This rule does not apply if buyers have taken the vehicle for a test drive or brought a professional mechanic to inspect it.

Financial Considerations

Much like the available trading channels, the financial aspects of vehicle purchases can be submitted through several legal procedures. Aside from paying in cash, which is self-explanatory, other options include:

  • Loans – The total amount you will eventually pay will depend on the borrowed amount, interest rates, and the repayment period.
  • Balloon repayments – This form of loan entails paying a couple of smaller installments and then paying off the rest of the debt in one ‘balloon’ final payment.
  • Lease – This type of loan is the best suited for people who trade used cars more often since it entails no obligation to buy the car and the ownership changes only when all the installments are paid off.

We hope these few considerations gave you a better idea of the legal aspects of trading second-hand cars in Australia as well as some of the pros and cons their nuances might entail. Of course, the final decision will always be left to your personal discretion. But, it is always good to know what you are committing yourself to before you make final decisions. So, happy trading and be sure to always read the fine print.

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