How to buy a used car with confidence

woman holding car keys

David Toscano

Posted February 20, 2023

In the market for a used car? Use this checklist to buy a used car with confidence and avoid an expensive mistake.

Buying a 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 cars 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 pandemic, used car prices have increased significantly in recent years. 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 used 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 and checklist

Work out your used car budget 

The first thing to do is to work out your budget and what you’re comfortable spending on a used car.  
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 a used car loan
This handy car loan calculator can help you work out your budget if you choose to finance. 
When determining your budget for your used car, always consider whether you have enough saved for registration, car insurance, servicing and maintenance, emergency roadside assistance, refuelling, any accessories you may require such as towbars, bike racks and even the installation of solar panel and batteries at home if you’re purchasing an EV.

It’s important to note that medium SUVs, large SUVs and utes typically have higher running costs than small hatchbacks and small SUVs. RACV’s latest Car Running Costs Survey can help you uncover the running costs of popular cars.

Tesla Model 3

The Tesla Model 3 has proved popular with Australian buyers looking for a used EV. Image: Supplied.


Create a shortlist of used cars to consider buying

As you read through online reviews, always consider how you’ll be using the car and how it integrates into your lifestyle and circumstances.
In addition to car reviews, helpful online resources for comparing different used cars include ANCAP’s how safe is your car, and 
No used car is perfect. When assessing the merits of each model and creating a shortlist, prioritise car features and attributes that are most important to you such as infotainment, safety, cargo-carrying capacity, interior space, off-road capability, engine and handling 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 used cars and take a test drive

Now that you’ve put together a shortlist of three-to-five models to assess, the fun begins - it’s time to inspect the used cars in full daylight.  
Use the inspections to assess the condition and features of the shortlisted used cars, such as paint condition, dents and scratches, underbody, interior plastics, tyres, lights, central locking and power seating. Test that all door, boot and bonnet apertures open and close smoothly, and remember to bring along your mobile phone to test sync and compatibility with infotainment systems, as well as bulky items such as prams, sporting equipment and luggage if you’re keen to assess the used car’s cargo-carrying capacity. 
A test drive of a used car is a must, helping you to understand on-road comfort, performance, fuel economy, safety systems, infotainment, road noise and any annoying rattles in the interior.  
It’s also a good idea to check the used car’s 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 used car.

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 used 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 used car – and avoid an expensive mistake. 
Similarly, vehicle history reports are a must-buy before purchasing used car, enabling you to understand if there’s any car finance owing, whether the used car has been written off or stolen, and much more. RACV Members can purchase a comprehensive vehicle history report at a special price. 

Negotiate the price of the used car confidently

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

Thousands of Victorians get their used car loan through RACV.
Discover more →

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 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.​

R.A.C.V. Finance Limited ABN 82 004 292 291 Australian Credit Licence No. 391488. RACV Finance is subject to RACV lending criteria. Conditions, fees and charges apply.