Always check if the car has any outstanding finance by searching the Personal Property Securities Register (PPSR) using the vehicle's VIN.
Arrange a pre-purchase inspection with a qualified mechanic to identify any hidden issues before committing to the purchase.
Consider financing options like secured car loans, which may offer lower interest rates compared to unsecured loans.
What you need to know about buying a used car
Used cars are pre-owned vehicles bought from dealerships or private sellers and their conditions can range from nearly new to well-worn.
Their main appeal is cost - they're generally cheaper than new cars (unless you're considering a classic or highly sought-after model). However, buying used comes with risks, as hidden issues may not be immediately obvious.
If you're not experienced with cars, it's wise to have a mechanic inspect the vehicle. Additionally, research the make, model and year to check for common issues or recalls and ask the seller detailed questions about the car's history.
Using a checklist during your inspection can help ensure you make an informed decision.
Where to find a used car
One perk of buying a used car is the variety of places you can find one - each with pros and cons:
Online platforms. Sites like Carsales and Gumtree list cars from both dealers and private sellers. You can browse, compare and contact sellers directly.
Forums and classifieds. Enthusiast forums and selling sites might offer bargains, but private sales mean no warranty, no cooling-off period and less protection if things go wrong.
Newspapers. While old-school, some papers and lift-outs still have listings. These are usually private sales, so be cautious.
Used car dealers. Buying from a licensed dealer offers more security - often a warranty, a cooling-off period and a clear sales process. Just keep in mind they're pros at negotiation.
If you're buying from a private seller, always inspect the car in person before handing over any money.
What to do before buying a used car
It's easy to fall for the first car you see, but a car is a big ongoing expense. Take the time to assess your needs and compare your options before committing.
Before you start searching, decide what you need in a car. Do you need lots of boot space or a small city-friendly vehicle? Think about how you'll use the car, how many seats you need, fuel efficiency, running costs, age and your total budget.
Once you start searching, do your research. Look online, scan newspapers and visit used car dealerships to get a feel for prices and availability. Understanding the market helps you spot a fair deal and gives you more confidence when it's time to negotiate.
Questions to ask when inspecting a used car
When you're checking out a used car, take the chance to ask the seller a few key questions:
Why are you selling? It could be anything from job loss to uncomfortable seats - or something more serious. If their answer feels off or evasive, take note.
Has it been in a crash or had major repairs? Even clean-looking cars could've been in accidents. Look for signs like mismatched panels or unusual paint textures.
How many kilometres has it done? Higher mileage usually means more wear and tear, though long highway trips are less stressful than city driving.
Are you the first owner? Ask for proof of ownership history if the car has had multiple owners.
Do you actually own the car? Make sure the seller has the legal right to sell it. Also check that it's not under finance, as encumbered cars can cause issues later.
Are you open to negotiation? Always worth asking - private sellers and dealers might budge on the price.
If anything feels off, get a mechanic to inspect the car or walk away. A dodgy deal can turn expensive fast.
Used car buyer’s checklist
When you are inspecting vehicles or going for a test drive, use this checklist to make sure you note the car's most important features to help you make an informed decision.
On your test drive
The gears are smooth and engage correctly.
The engine power is appropriate to the car’s size.
The car tracks and brakes steadily and in a straight line.
The electrics and dials are fully operational.
The temperature dials do not show any signs of overheating.
The speedometer is functioning and displays your speed accurately.
There is no irregular engine noise.
Check the suspension and the transmission for noises, rattles or knocks.
Test the brakes.
Listen to the exhaust. Is it shaking or does it sound like it has corrosion holes?
Try the aircon, this is costly to repair.
Engine bay
Do the belts look frayed, shiny or worn?
Can you hear squeaky noises from worn bearings?
Is there oil splashed all over the engine? Are there any leaks from joints, pipes or couplings?
Are there drips forming on pipework? Are there any holes in tubes?
Do the electrics look sound? Have there been any repairs to the wiring? Is anything unplugged?
Do some bolts look out of place, shiny when everything else is corroded? These parts may have been removed and replaced.
Can you hear unusual tapping, grinding, knocking or clunking from the engine?
The car's body
There is no sign of accident or rust damage.
There is no sign of hail damage.
There are no panel irregularities.
The door and boot seals are intact.
Any visible paint in the engine bay or interior matches the car's exterior colour.
The upholstery is in good condition.
There are no chips or variations in the paint.
The car's interior
The seatbelt shows no signs of wear and tear.
The lights inside the car are functioning.
The electronics, including the air conditioning, the audio and the windows, are working.
The upholstery isn't ripped or damaged.
Areas of worn, shiny trim pieces or control switches indicate high-wear and mileage.
The car's exterior
You’ve taken note of the engine VIN and body number.
You’ve checked the exterior of the engine.
You’ve checked the engine oil and the radiator coolant.
There is no corrosion visible. (You can tap a panel or component – corroded parts sound dull and lacking resonance.)
Look for uneven tyre wear; that's a sign of alignment problems caused by an incorrect set-up or worn components.
Is the glass free of chips and cracks?
Is it leaking oil or liquid?
Do all the lights work? Changing bulbs on newer cars is sometimes a complicated process.
Documents you’ll need
PPSR certificate
Transfer of ownership documents
Registration papers
All the factors involved in buying a used car can seem overwhelming, but you want to make sure that you’re purchasing a quality vehicle. Once you know what to look out for and after you’ve done your own research on what cars are available, you can make an informed decision.
Used car financing options
If you're looking to finance your used car purchase, you have a few options available to you. Here are the financing options available for used vehicles:
Secured car loan. While some lenders will not approve a secured loan for a used vehicle, other lenders offer loans specifically for used vehicles if they meet certain requirements. These loan types require you to put up your newly-purchased car as security, but in return these loans generally have lower interest rates.
Unsecured loan. If you are unable to find a secured loan, you might want to take a look at your unsecured personal loan options. You don't have to use your car as security for these loans, but you may find that the interest rates are higher because it is more of a risk for the lender. One of the benefits with an unsecured loan is that you are able to use the loan amount in any way you want, so you can use it to purchase the vehicle and also for something else if you choose.
Dealer finance. If you are buying the vehicle from a used car dealership, they may be able to offer you some financing options. ASIC recently changed the regulations around dealer finance, which means car dealers can no longer offer you a rate that is higher than what they receive from a lender. However, you should still do your research on your other loan options before you sign up for dealer finance.
Compare used car loans to benchmark rates
Don't sign up for financing, until you compare options.
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How we picked these
Finder Score for car loans
To make comparing car loans even easier we came up with the Finder Score. Interest rates, fees and features across 200+ car loan products and 100+ lenders are all weighted and scaled to produce a score out of 10. The higher the score, the more competitive the product.
The best way to buy a second-hand car in Australia is to research models that fit your needs and budget, check listings on reputable websites like Carsales or Gumtree, and always inspect the car in person. Ensure you get a PPSR check to verify there are no outstanding loans on the vehicle and it's always a good idea to have a mechanic inspect it, or get an roadworthy check, before finalising the purchase.
The best age for a used car is typically 2-5 years old. At this age, cars have already depreciated significantly but are still likely to be in good condition with modern features. They also often have some manufacturer warranty remaining, which can be beneficial.
Good mileage on a used car in Australia is generally considered to be around 10,000 to 15,000 km per year. For example, a five-year-old car with 50,000 to 75,000 km is within the average range and is likely to be in reasonable condition if well-maintained.
The best websites to buy second-hand cars in Australia include Carsales, Drive, Gumtree and Facebook Marketplace. These platforms offer a wide range of vehicles, detailed listings, and the ability to filter searches based on your preferences.
You can pay for a second-hand car in Australia using cash, bank transfer, or digital platforms like PayPal or PayID. If you need financing, you can apply for a car loan through a bank or lender. It is important to complete the payment securely and ensure all ownership transfer paperwork is correctly processed. You should never send money online as a deposit until you have seen the car in person and verified the accuracy of the transaction. Buying and selling cars online is an area where scammers are highly active, so be extra cautious when dealing with strangers online.
Matt Corke is Finder’s head of publishing ventures. Prior to this he was head of publishing for Australia, New Zealand and emerging markets. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time, he has survived the dot-com crash and countless Google algorithm updates.
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How long will a car dealer hold a car for you after you pay a holding fee?
Finder
CharisseOctober 24, 2018Finder
Hi Melanie,
Thanks for reaching out to finder.
The holding time will vary from one dealer to another, depending on the contract terms. Before agreeing to a holding deposit, check whether the deposit is refundable, whether the deposit is part of the purchase price and how the deposit should be paid. Read carefully all the terms and make sure you agree on everything that is written on the contract before signing it.
If you decide to leave a deposit to hold your vehicle, you should should ask for a receipt and make sure you put everything into writing and have the document signed by both parties.
I hope this helps.
Cheers,
Charisse
SteveMay 15, 2018
Who offers loans to people on DSP up to 15 k for a car.
JoelMay 15, 2018
Hi Steve,
Thanks for leaving a question on Finder.
Usually, a secured car loan might be an option for you if you are on a Centrelink payment. You can purchase a new or used car and use it as security for the loan to get a lower rate. See our review on Centrelink loan options for your reference. We have a range of secured car loan options on our table to choose from. To help narrow down your options, please enter the amount you need following the loan term then press “Calculate”. You may then sort the table based on the lender’s interest rate, comparison rate, minimum loan amount, term, fees, and your projected monthly repayment.
You can click the name of the lender to be redirected to our review page and learn more about the lender’s loan offer, rates, and requirements as well as the pros and cons of using their loan service. When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Want to buy a classic car but don't have the ready money? There are still financing options available for classic vehicles. Find out what loans you have to choose one and which one will work best for you.
You can still get a car loan even if you work casually, and there's a range of loans for you to choose from. Find out here how you can get finance for your next car and which loan might be best for you.
You don't need to wait to get car financing. Some lenders can approve you instantly and send your funds on the same day. You can also consider pre-approval. Find out all the ways to get a quick car loan in this guide.
Don't buy a new caravan until you've read this guide. Find out exactly what financing options are available and how to compare your caravan loan options to find the right loan for you.
You can still get a car loan if you want to finance a used car. Find out how you can get a used car loan and see what rates are available for the used car you want. Learn how to best compare lenders and apply for your loan today.
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How long will a car dealer hold a car for you after you pay a holding fee?
Hi Melanie,
Thanks for reaching out to finder.
The holding time will vary from one dealer to another, depending on the contract terms. Before agreeing to a holding deposit, check whether the deposit is refundable, whether the deposit is part of the purchase price and how the deposit should be paid. Read carefully all the terms and make sure you agree on everything that is written on the contract before signing it.
If you decide to leave a deposit to hold your vehicle, you should should ask for a receipt and make sure you put everything into writing and have the document signed by both parties.
I hope this helps.
Cheers,
Charisse
Who offers loans to people on DSP up to 15 k for a car.
Hi Steve,
Thanks for leaving a question on Finder.
Usually, a secured car loan might be an option for you if you are on a Centrelink payment. You can purchase a new or used car and use it as security for the loan to get a lower rate. See our review on Centrelink loan options for your reference. We have a range of secured car loan options on our table to choose from. To help narrow down your options, please enter the amount you need following the loan term then press “Calculate”. You may then sort the table based on the lender’s interest rate, comparison rate, minimum loan amount, term, fees, and your projected monthly repayment.
You can click the name of the lender to be redirected to our review page and learn more about the lender’s loan offer, rates, and requirements as well as the pros and cons of using their loan service. When you are ready, you may then click on the “Go to site” button and you will be redirected to the lender’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.
Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. You can also contact the provider if you have specific questions.
Cheers,
Joel