How to buy a used car with confidence

woman holding car keys

David Toscano

Posted January 21, 2022


In the market for a used car? Here's how to buy one with confidence and avoid an expensive mistake.

Buying a new car is a big decision and one of the most expensive purchases you’ll make in life, which can make it an exciting, rewarding and nerve-racking experience. 
 
When it comes to purchasing a used car, feelings of stress and anxiety can multiply as you consider vehicles that have already been driven thousands of kilometres and owned by one or more people you don’t know. 
 
Thanks to a short supply of new cars and reluctance to use public transport in the wake of the COVID-19 pandemic, more Australians are considering the purchase of a used car. Medium SUVs such as the Mazda CX-5, Kia Sportage, Hyundai Tucson and Subaru Forester, and utes like the Toyota HiLux and Ford Ranger are among the most in-demand used cars across the country, while Chinese-made SUVs such as the MG ZS are also growing in appeal thanks to a long list of standard features and comprehensive Aftersales support.  
 
Demand for hybrid vehicles such as the Toyota RAV4, and pure Electric Vehicles (EVs) such as the Tesla Model 3 and MG ZS EV, is increasingly rapidly as drivers seek to reduce their environmental impact, while large SUVs with off-road capabilities such as the Toyota LandCruiser and Nissan Patrol are in vogue as interest increases in domestic recreation opportunities and driving holidays.


Used car buying tips

Work out your budget and 'must haves' 

The first thing to do is to work out your budget and what you’re comfortable spending.  
 
Your budget may be influenced by several factors including required vehicle size, must-have infotainment and safety features, how long you intend to keep the car and its estimated value retention, whether you will use the vehicle for business or ride-sharing purposes, in addition to whether you’re purchasing in cash or choosing to finance via weekly repayments. 
 
This handy car loan calculator you can help you work out your weekly repayment budget if you choose to finance.  
 
When determining your budget, always consider whether you have enough saved for registration, car insurance and ongoing running costs like servicing and maintenance, refuelling and any accessories you may require such as towbars, bike racks and even the installation of solar panels and batteries at home if you’re purchasing an EV. It’s important to note that medium SUVs and utes typically have higher running costs than small cars and sedans. RACV’s annual Vehicle Operating Costs survey can help you uncover the running costs of popular models. 

 

Kia Sportage

Kia Sportage is a favourite used car among families looking for a medium SUV. 

Undertake online research and create a shortlist

As you read through online reviews and make comparisons from trusted experts and owners past and present, always consider how you’ll be using the vehicle and how it fits into your lifestyle.  
 
In addition to reviews, helpful online resources for comparing different makes and models include ANCAP’s how safe is your car, productreview.com.au and greenvehicleguide.gov.au. 
 
No used car is perfect. When assessing the merits of each model and creating a shortlist, prioritise vehicle features and attributes that are most important to you such as infotainment and safety, engine and handling, cargo-carrying capacity, interior space, off-road capability, and of course, styling. Some used cars may also come with a balance of new car warranty, giving you greater peace of mind.

Inspect shortlisted vehicles and take a test drive

Now that you’ve complied a shortlist of three-to-five vehicles to assess, the fun begins - it’s time to inspect your selected vehicles in full daylight.  
 
Use the vehicle inspection to assess overall condition and features such as paint condition, dents and scratches, underbody, interior plastics, tyres, lights, central locking and power seating, and that all door, boot and bonnet apertures open and close smoothly. Remember to bring along your mobile phone to test sync to infotainment systems, as well as bulky items such as prams, sporting equipment and luggage if you’re keen to assess cargo-carrying capacity. 
 
A test drive of a used vehicle is a must, helping you assess on-road comfort, performance, fuel economy, safety systems, infotainment and road noise, and uncovering any annoying rattles in the interior.  
 
It’s also a good idea to check the service handbook to ensure that all scheduled maintenance has been undertaken as per the manufacturer’s requirements. 
 
If you’re feeling overwhelmed, bring a trusted family member or friend to help you assess the pros and cons of each shortlisted vehicle.

 

car inspection

A vehicle inspection report can help uncover a mechanical fault with a used car. 

Purchase vehicle inspection and history reports 

Once you’ve narrowed down your shortlist to the car you want to purchase, it’s important to check the if there’s any underlying mechanical or maintenance issues that aren’t obvious to the untrained eye. Vehicle inspections, conducted at RACV Accredited Auto Care Centres, can help you to make the right decision on whether to purchase a vehicle – and avoid an expensive mistake. 
 
Similarly, vehicle history reports are a must-do before purchasing used car enabling a prospective buyer to understand if there’s any finance owing on the vehicle, whether the vehicle has been written off or stolen, and much more. RACV members can purchase a comprehensive vehicle history report at a special price. 
 

Negotiate with pricing data and purchase car insurance 

Arriving at a fair purchase price can be one of the most daunting aspects of the used car purchase journey. Confidently negotiate a fair price with the seller by arming yourself with the car valuation data and prices from online marketplaces. 
 
Prices for used cars have appreciated dramatically since the onset of the COVID-19 pandemic, with sellers less likely to entertain discounts off listed prices, particularly for popular SUVs and utes. Buyers can expect cars sold by authorised dealers to priced higher than similar cars sold by private sellers, but offset in some cases by a statutory warranty and cooling-off period. 
 
Once you’re happy with a price and sign on the dotted line, ensure that you have comprehensive car insurance in place before driving your new car home. The unexpected can happen when driving your new car home.

RACV Car Insurance can protect you against loss in the event of a car accident.
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The information provided is general advice only. Before making any decisions please consider your own circumstances and the Product Disclosure Statement and Target Market Determinations. For copies, visit racv.com.au. As distributor, RACV Insurance Services Pty Ltd AFS Licence No. 230039 receives commission for each policy sold or renewed. RACV Car Insurance issued by Insurance Manufacturers of Australia Pty Ltd ABN 93 004 208 084 AFS Licence No. 227678.​