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Buying a used car checklist

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Navigating the used car market can be a daunting experience, however the opportunity to snag a great deal is often too good to refuse. Sure buying a used vehicle can save you thousands of dollars, but that saving comes with potential risks if you are not well prepared.

To help avoid purchasing a potential used car lemon, the checklist below will aim to navigate the used car market to help you you avoid any preventable issues down the road. 


Before setting your eyes on a new set of wheels, it’s important to first determine your budget. Initial purchase price is arguably the most important factor for many, however its important to also factor in the purchase price, stamp duty and ongoing costs such as fuel, maintenance and car insurance.

Purchasing a car often requires a significant upfront expense and for many who don’t have thousands of savings stashed away, finance may prove key. Finance can be obtained through a car dealership at the time of purchase at the risk of a higher interest rate, however a number of used car loans today are negotiated through online lenders such as loans.com.au.

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Purchasing from a dealership

Generally, buying a used car from a dealership provides you with a guaranteed title and a statutory warranty on cars under 10 years old or up to 160,000km. This warranty is valid for three months or 5,000km from date of purchase and covers items relating to safety, reliability and roadworthiness.

Purchasing through private sale

Purchasing a car through private sale typically means you will be receiving a better deal than what a dealership will offer. Acquiring a cheaper price will often mean compensating for items that may be offered from a dealership such as guaranteed title and warranty.

Vehicle research

With a number of resources available within the palms of your hand from video reviews to comparisons and analysis, it’s important to perform your own due diligence by researching vehicle makes and models to determine if they are right for you.

Vehicle history

Every used car will have a back story, with some containing more twists and turns than others. To check the history of a used car, the Australian Government’s Personal Property Securities Register (PPSR) offers the ability to check any registered security interests over a vehicle utilising its VIN or Chassis number. The cost of the PPSR search is $2, however that $2 could potentially be the difference between purchasing or avoiding an encumbered vehicle.

The vehicle Identification Number or VIN, the engine number, and the registration number are the most critical pieces of vehicle identification you must check before buying a second-hand car. The VIN is a 17-digit alpha-numeric code that can be found on a metal plate inside the engine bay. The engine number can be found on the engine, and the registration number is on the car’s number plate.

Jot down these important numbers when car shopping to confirm that they match with details as listed on the registration papers. Be wary if they don’t, the car could be stolen.

When purchasing a used car, there is a risk that you may be purchasing someone else’s debt. You don’t want to be a victim if the vendor sells you a car that is security for a loan, and then defaults on that loan, causing the lender to repossess the car to recover the funds. To prevent this, make sure you check that the car is debt free before buying, by utilising the PPSR search.

Inspections and test drives

A pre-purchase inspection is an important part of the car buying process whether you’re buying from a dealer or a private seller. If you have inspected the vehicle, for a second opinion it can be beneficial to also get a qualified mechanic to inspect the car. The inspection should include the body, engine and all mechanical systems.

Inspecting the vehicle should include running your eyes over:

  • Body and paint – Checking for dents, loose, misaligned or mismatched panels, evidence of rust or crash repairs, and hail damage.
  • Interior – Check the seats, carpet and interior plastics for stains, damage, cracks or wear and tear that’s not consistent with the age and kilometres of the car.
  • Vehicle identification – Check that the car’s VIN – vehicle identification number – matches the VIN on the registration papers. The VIN number can typically be found on a small silver build plate that’s usually in one of the rear corners of the engine compartment.
  • Engine – Ensure the engine runs smoothly and quietly at idle and while driving.
  • Engine oil – Engine oil should be clean, honey-coloured (not black).
  • Radiator coolant – Coolant should be clean and brightly coloured, typically green or red.
  • Tyres – Ensure all the tyres (including the spare) are in good visual condition without signs of damage or uneven wear, and with tread depth above the minimum wear indicators.
  • Fluid leaks – Check the engine compartment and underneath the car for signs of oil, coolant or other leaks that might indicate poor maintenance and potential repairs.
  • Exhaust – Check to make sure black, blue or white smoke from the exhaust is not being emitted as this typically indicates an engine problem.
  • Seat-belts – Ensure the seat belts extend and retract smoothly, that the locking mechanism works, and that the belts are in good condition.
  • Lights – Test the operation of head- and taillights, indicators, park lights, reverse and number plate lights.
  • Warning lights – With the engine running, make sure there are no warning lights illuminated on the instrument panel.
  • Equipment – Check that all the accessories work, including the air-conditioning and fan, power windows and mirrors, audio system, satellite navigation, parking sensors and reversing camera.
  • Jack and tool kit – Make sure these important items are in place and in working condition.

Spending time with the vehicle will give you an idea of how comfortable it is to drive and if everything is working smoothly. Ask the seller if you can drive the car on different road surfaces such as flat roads, uphill, highways and areas with sharp cornering.

Negotiate price

The asking price doesn’t have to be the final price. Don’t be afraid to negotiate with the seller even if you are only aiming to knock the price down by a small amount. Every dollar counts. Make a list of any faults you discovered when inspecting the vehicle and use them to drive down the price.


Before you take the car home, make sure you have all the paperwork needed such as the registration, warranties, and any other documents that relate to the car. Make sure you get the original versions not photocopies. 

It is worth taking your time when buying a second hand car as you don't want any surprises after you buy it. 

Related: Buying a new vs used car

If you are looking to purchase a new set of wheels with the help of finance, be sure to check out our range of low-rate used car loans.

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About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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