Buying your first car
If you’re buying your first car, here’s a few things to consider:
- Do you want to buy a new or used car
- Set your budget
- Do you want to buy from a licensed dealer or private seller
- Check the warranty conditions
- Cooling-off periods don’t apply when you buy a vehicle
- Complete our used car buyer's checklist
- Arrange finance if you need it
- Insure your car
- what to do if things go wrong
New cars provide peace of mind with no history of accidents or services, and they are covered by warranty. However, they can be more expensive and will usually depreciate faster than a used car.
Used cars can be less expensive but come with more risk. Checking the service history and getting an inspection can help, but there's no guarantee of good performance. A limited or no statutory warranty may apply, depending on the car's age.
Even if there is no statutory warranty, the Australian Consumer Law (ACL) consumer guarantees can still apply when buying from a dealer but not in private sales.
Don't get taken for a ride - complete the checklist
Consumer Protection’s Don’t be taken for a ride – used car buyer’s checklist will help you ask the right questions of the seller and find out exactly what you’re buying before you drive away.
Download and save the PDF to your device to fill it out and keep it handy.
When setting a budget, remember to consider all purchase-related costs, such as vehicle licence duty (previously known as stamp duty), registration, servicing, insurance, fuel and other running costs.
The MoneySmart cars website can help you to work out the cost of buying and running your car.
Most people purchase a car from dealers or private sellers, but you can also buy cars at auction or even import them from overseas.
Car dealers are a great choice if you want to check out a wide range of cars, take them for a test drive and get expert advice.
When buying a car from a dealer, you'll need to sign a contract of sale. This is a legally binding document, so only sign if you're committed to the purchase.
Before signing the contract, make sure it shows:
- The total cost of your car
- Trade-in amount (if you are trading in another car)
- Delivery date (if applicable)
- Any special contract conditions you have agreed to.
The dealer must provide you with a copy of the contract at the time of signing.
You can cancel the purchase at any time before you and the dealer have signed the contract. Remember, there is no cooling-off period for car purchases in WA once a contract has been signed by both parties.
Learn more about cancelling a contract with a dealer.
The dealer should provide you with a breakdown of all mandatory costs associated with purchasing your new car before you sign your contract, such as:
- The price of the car;
- Vehicle licence duty, previously known as stamp duty;
- Dealer delivery charges; and
- Any other fees such as finance costs to be settled before you can take possession of the car.
You can add your specific conditions to a contract of sale, as long as they don’t take away the standard terms of the contract. An example is making a contract subject to a specific delivery date or getting finance approval.
Before you sign the contract, make sure any special conditions are written in full and any blank spaces or irrelevant conditions are crossed out, initialled, and dated by you (the buyer) and the dealer (seller).
Buying a car from a private seller can be cheaper but make sure you do your pre-purchase checks thoroughly because the Australian Consumer Law (ACL) does not apply to private sales so you are not covered by statutory warranties or consumer guarantees. Only vehicles bought from licensed dealers are covered by the Motor Vehicles Dealers Act.
We have developed a Don’t be taken for a ride – used car buyer’s checklist to help you.
Before purchasing a used car, check it hasn't previously been written-off or stolen and there is no outstanding finance owing on the car. Do a $2 Personal Properties Security Register search using the vehicle identification number (VIN) which is a 17 character unique identifier located in the owner’s manual or stamped on the driver’s side door. You can access the PPSR online or by calling 1300 007 777. Watch out for unauthorised websites which link back to this address and charge much more.
Transfer of ownership
If you buy from a private seller, you need to complete transfer of ownership paperwork to make the sale official. Visit the WA Department of Transport’s Buy, sell or transfer a vehicle for more information. If you buy from a licensed dealer, the dealer must do this.
When buying at auction, you will usually enter a contract to purchase a car ‘at the fall of the hammer’ after successfully making the highest bid.
Licensed auctioneers have the same obligations as other licensed dealers selling a car, although the process of purchasing a car by auction is different. Auctioneers can sell cars on behalf of private seller or a trader/business/organisation.
If you are purchasing a car auctioned on behalf of a private seller, you will not receive a statutory warranty under the Motor Vehicle Dealers Act. Most of the Australian Consumer Law consumer guarantees don’t apply to cars sold at an auction run by an agent on behalf of a private seller. However the following consumer guarantees do apply:
- Title to the product
- Undisturbed possession
- No hidden debts or charges.
The law against false or misleading claims also applies to auctions. It is always important to check who the seller is before you buy.
Australian Consumer Law gives you rights known as consumer guarantees when you buy a car from a licensed dealer. ACL consumer guarantees don’t apply when buying from a private seller.
Most new and used cars purchased from a licensed dealer and auctioneer in Australia are covered by a warranty – a manufacturer's warranty if the car is new, or a statutory warranty if the car is used and meets certain conditions.
If the car has any time remaining on the manufacturer's warranty or extended warranty from the previous owner, ask the seller to transfer it to you. It is important to verify if any warranty is still valid by checking with the dealer or the warranty provider if it is a used car.
Learn more about warranties when buying a vehicle.
There is no cooling-off period for cars purchased in Western Australia.
If you need to cancel the contract to buy the car, you may be asked to pay ‘pre-estimated liquidated damages’ (PELD). The maximum amount of PELD a dealer may charge is five per cent of the total purchase price.
Learn more about cancelling a contract.
There are many ways you can finance a car:
- Pay for the car outright;
- Get finance through the dealer;
- Take out a regular car loan; and
- Get a novated lease through your employer.
The age of the car you are purchasing may affect the finance options available to you.
Make sure you understand the terms and conditions before you agree to any finance contract.
Take out insurance before you drive your new car home. More advice on insurance is available on MoneySmart’s choosing car insurance.
Try talking to the dealer to resolve any issues. State what the issue/s is and how you would like it resolved. Sample text is available on the sample letter to a car dealer page.
If you are not happy with their response, contact the Consumer Protection Contact Centre on 1300 30 40 54 or by email for further assistance.
If you’re unable to resolve the dispute with the dealer, you can lodge a complaint with Consumer Protection.
Share this page: