Thinking of buying a used car? It can be a good financial decision if you steer clear of these common mistakes.
Car culture runs deep in Australia. Historically, cars shaped how Australian cities were built. Starting in the 1940s, Australian cities began to build themselves around the ‘Automobile City’, with cars becoming the central focus of urban development.
And in modern times, owning a car and getting a driver’s license are considered to be a sort of ‘rite of passage’ – marking a significant step toward independence and adulthood.
With cars being a cultural and social icon among Aussies, it’s no surprise buying one is a big business in the country.
In 2023 alone, data showed almost 1.2 million new cars were delivered to Australian buyers.
But with the rising cost of living causing Aussies to tighten their belts, more people are turning to pre-owned or used cars to save on the big price tags on new vehicles.
If you thought the new car sale figures were impressive, the almost 2.1 million used vehicle sales during the same period reflected the growing trend towards purchasing pre-owned or used cars.
But hold on before you rush to snag any pre owned car on Facebook Marketplace or Gumtree that caught your eye. Buying a used car, whether new or used, is a big financial investment.
Anyone who bought a car will tell you it’s a complex process. Unfortunately, many first-time buyers make mistakes that end up costing them not only money, but also their satisfaction and peace of mind.
With that in mind, here are some common blunders you should avoid when buying a used car along with strategies to help you steer clear of these pitfalls.
Used car buying: 9 common mistakes to avoid at all cost
1. Not doing your research
One of the most common mistakes second-hand car buyers make is not conducting enough research.
Some people make the mistake of skipping research when buying a second-hand car because they feel it’s not as big an investment compared to when buying a new car.
Don’t know where to start? To start the buying process, first narrow down your choices to the make and models of cars that fit your needs and budget.
Also, remember that if you’re on a provisional licence (your L or P plates), you’ll need to do a quick online check to ensure you won’t be banned from driving the car you’re eyeing.
Once you have a few preferences, start searching for used cars that fit the profile. Here are some things that will help you further narrow down your selection:
- Fuel efficiency (how much distance your car can travel with a specific volume of fuel).
- Reliability ratings (shows how a car holds up against competitive models and the likelihood of facing problems and repairs, helping to gauge overall durability and potential inconveniences)
- How it compares to other models in its class
- Resale value
Of course, these are just some of the boxes you need to tick when doing your research. You can also search up the engine type and safety features (like traction control system (TCS), anti-lock braking systems (ABS) and airbags).
Researching before purchasing a car can save you more money than you realise. For example, if a car model or make is known for having expensive mechanical issues or has poor fuel efficiency, conducting research beforehand can help you avoid making a costly mistake.
And you don’t have to go at it alone. There’s plenty of information available online to help you make an informed and smart decision. A simple google search and reading through online forums like r/CarsAustralia will arm you with the information you need to avoid shady business. You can also check the information provided by the car maker to find the model with the right specs.
Parkhound tip: Avoid a bad deal from the start by checking the kilometres lodged on the car’s odometer.
One of the oldest tricks in the scam book to look out for is odometer tampering or odometer rollback. Some private sellers or dealers will roll back a vehicle odometer to artificially increase its value. By shaving off a few thousand kilometres (or hundred thousand kilometres in some cases), sellers can pump up the sticker price of a car by thousands of dollars.
To avoid falling for this scam, make sure to have a vehicle history check done or to have the vehicle checked by a qualified mechanic before buying.
2. Not checking the vehicle history report
Many buyers of second-hand cars feel stress and anxiety over the quality and history of a used car. And for this problem, the vehicle history report is your best friend.
A vehicle history report basically helps a buyer see if there are any red flags that come with purchasing a used vehicle.
It contains important information about a car, including previous major accidents it has been involved in, what are the damages it incurred and how many repairs were needed after the accident occurred.
Overlooking a vehicle history report can be a big mistake. If you solely trust the words of the car agent or seller, you may end up facing costly repair bills now and then. And trust us, those occasional hundreds of dollars will balloon to big numbers over the long term.
By getting to know a used car’s past, you can save yourself stress and money in the future.
Parkhound tip: The Australian government’s Personal Property Securities Register (PPSR) offers a history report that will show a used car’s very first registration dates or if the vehicle has ever been written off or stolen.
It also shows if there’s money still owing on it from the previous owner; and if it’s ever been used in certain settings like as a taxi or hire car.
The best part? They do it for just a $2 fee online. There are also private organisations that provide similar services at varying prices.
3. Buying without taking it for a test drive
So, you’ve found a used car that ticks all the boxes and you’re ready to take it off the seller or dealership’s hands. However, buying a pre-owned car without taking it for a test drive is one of the biggest mistakes you can make.
Buying a car without a test drive is like getting hitched without a date first. While it’s good on paper, it’s more likely you’ll regret not testing the waters – fans of Married at First Sight would know.
The test drive is one of the most important steps of the car-buying process, whether it’s new or used.
Taking it for a spin will allow you to get a ‘feel’ for a vehicle, including how comfortable it is, if all its features are working or if the handling and braking are good. It’s also the best way to gauge if the car truly lives up to your needs and expectations.
Any gearhead knows every vehicle has its own personality, quirks, and hidden surprises. By taking your prospective car for a test drive, you’ll be equipped to make an informed decision and avoid any buyer’s remorse.
Parkhound tip:
It’s recommended to take at least 30 minutes to conduct a comprehensive test drive. In some cases, dealerships may allow you to take the car overnight for a more thorough assessment.
During your drive, here are somethings to check:
- Check the wear and tear on both the interiors and exteriors
- Mechanical or engine faults (if any)
- Issues with the air conditioning (if any)
- Condition of the tyres
- Suspension issues
4. Not keeping your emotions in check
One of the biggest mistakes buyers make when purchasing a used vehicle is allowing their emotions to rule their car-buying decisions.
Love is blind, and the same goes when you buy a car with just sheer infatuation. Emotional attachment to a certain model or make can cloud judgment. It can lead to overlooking important factors such as a vehicle’s ratings, mechanical condition, maintenance history, and overall value for money.
Having a wide-eyed approach can also make you more vulnerable to sales tactics aimed at getting you to pay more than you should.
When buying a used car, set your emotions aside and focus on doing your homework. Compare different models and find those that match your real wants and needs. Save the honeymoon period when you’ve done your due diligence and bought the one that is the right fit for you.
After all, there’s nothing worse than falling in love with a car, spending your hard earned money on it and then just having it fall short on your expectations.
Parkhound tip:
To avoid emotional buying, financial psychologists recommend putting some time between your impulse and actually purchasing something.
While it’s generally recommended to practise the 24-rule or waiting a day to see if the purchase is something you really want, you might want to take a longer time for a bigger buy like a used car.
5. Not doing a pre-purchase inspection
Buying a used car without an inspection is a rookie mistake. Without a professional inspection from an independent mechanic, you will not be privy to a vehicle’s hidden issues.
The saying “Don’t judge a book by its cover” works just as well for cars. Even if a car looks like a great deal because it’s in pristine condition on the outside, there might be hidden problems under the hood that only a trained mechanic can spot.
A mechanic will carefully check for things like leaks, examine the engine, and assess the condition of the brake pads and tyres, letting you know if any parts need replacing soon. This can save you expensive repairs down the road.
Parkhound tip: If you’re a grease monkey who likes to do things your way, you can do the inspection yourself. Of course, this means doing your research on any red flags you should look out for. It can also give you a face-to-face interaction with the owner and ask important questions about the history of the vehicle that may not have been included in the vehicle history report.
6. Not negotiating the purchase price
Most buyers make the mistake of saying ‘yes’ to a deal before even trying to haggle the purchase price.
What many car buyers fail to realise is that the price of a vehicle is often, if not always, negotiable. By not taking your chance, you lose out on an opportunity to save hundreds or thousands of dollars.
Another trick that salespeople often use is making the deal sound sweeter than it really is. For example, they might offer you a price that’s $1,000 less than the sticker price. But many buyers think it’s a great deal when it’s not much of a discount at all.
Doing your research is the best way to ensure you’re armed with the confidence to negotiate with the dealership or the private seller. So don’t be afraid to flex your negotiation muscles!
Parkhound tip:
Don’t be afraid to walk away if you’re not offered a fair price. Remember, you’re the buyer and you generally have the upper hand in this game.
This move also puts the ball in the seller’s court and they will usually come back to the table with a better offer!
7. Focusing only on the monthly payment
Most buyers make the mistake of saying ‘yes’ to a used car because of the attractive monthly-payment figure parroted by the salesperson the minute they walk into a dealership.
Those who fall for this sales tactic often find themselves on a slippery slope of being manipulated with numbers and overpaying for a used vehicle.
When the salesperson puts the spotlight on the monthly payment, they can secretly bundle together the new-vehicle price, trade-in value, and financing or leasing terms.
This gives them too much flexibility to offer what seems like a ‘good price’ in one aspect while pumping up the numbers for it elsewhere.
Buyers also mistakenly assume that a monthly payment which is within their budget means it’s a good deal. Some dealers extend the loan term to meet this target, but this usually results in paying significantly more in interest over the long run.
To avoid making this mistake, always negotiate the total purchase price first. Afterwards, you can discuss the financing and other fees.
Parkhound tip:
If you’re buying a used car in a dealership, don’t automatically accept the dealer’s financing option. Shop around for other financing options such as credit unions, banks and online lenders that offer better interest rates or loan products. Getting pre-approved for a loan can also give you a bargaining chip during money talks, so make sure your credit score is in a good spot!
8. Cracking under sales talk pressure
People who are not good at handling high-pressure sales tactics often fall into the trap of buying a car under the influence of the false sense of urgency created by salespeople or private sellers.
Don’t react to phrases such as “This offer is only until today” or “Someone else has their eyes on this car”, as these are designed to pressure you to jump into a decision. Don’t let FOMO or fear of missing out rule your car-buying process.
Parkhound tip: If you’re intimidated by a face-to-face negotiation, bringing a knowledgeable friend or family member can make a world of difference. They can help with negotiations, ensure you don’t agree to unfavourable terms, and be your personal advocate.
9. Not accounting for the total cost of car ownership
Even if you’ve haggled down the purchase price, don’t think you’re in the clear just yet. Lots of people forget about the extra expenses that come with owning a car.
It’s not just about what you pay upfront or every month. You’ve got to think about stuff like insurance, maintenance, gas, and how much the car’s value drops over time.
Make sure to check out our article on the hidden costs of buying a car to stay informed and avoid unexpected expenses!
Parkhound tip:
One of the most overlooked costs of car ownership is parking. To help you save on parking fees, book a reserved parking space through platforms like Parkhound. It allows you to find a parking space that’s close to where you need to be. The best part is that you can book a parking spot virtually anywhere across the country, whether it’s in Sydney, Melbourne, Brisbane, Perth and other locations!
Don’t make these mistakes when buying a used car!
Buying a used car is a great way to save money if you’re in need of a vehicle. However, it’s important to be aware of these potential pitfalls that can cost you time, money and peace of mind during the process.
Keep in mind that having knowledge is key when it comes to buying a car. Take your time, do your research, and don’t hesitate to ask questions. It’s all about being informed and making the best decision for yourself.
By avoiding these common mistakes, you can have a smoother buying experience and you’ll end up with a car that you’ll be happy with for years to come.
