BUYING A CAR – WHY YOU NEED TO CONSIDER ARRANGING AN INDEPENDENT INSPECTION

It’s pretty obvious that many ADF members love their cars. Dual cab utes are popular, followed by 4WDs and SUVs. Many of these vehicles are acquired brand new and come with a manufacturer’s warranty of up to ten years (along with depreciation of up to 40% the moment they’re driven out of the showroom). Manufacturers’ warranties are by no means perfect, but they do offer considerable peace of mind.

The rest are purchased used (or “preloved”) through a licensed motor dealer or privately. Either way, we recommend arranging a pre-purchase car inspection by an independent, qualified mechanic, especially if the sale is through a private seller.

Dealer Purchases

At least with a dealer, there is some kind of guarantee on a used vehicle, usually around clear title, your rights as a consumer and the vehicle’s quality and fitness for purpose. You can check the exact legal obligations of licensed dealers through your state or territory government’s website and through your local motorists’ associations. Here’s a good example.

Nevertheless, even if a dealer is the seller, an independent inspection is highly recommended because dealers are often not especially familiar with the used cars they’re selling and their commercial interests lie in selling cars to buyers as soon as possible. So when you read a statement by a dealer on their website that there’s been a “100 point inspection” or that “all cars in stock are certified” or “we’ll provide you with a report from our independent inspector”, you should not conclude that this makes an independent inspection unnecessary.

Private Sellers

When you buy through a private seller, it’s a case of “let the buyer beware”. That is, for all intents and purposes, you are relying on the honesty of the seller. And even if the seller is open and honest with you, private sellers are usually in no position to express an expert view of the condition of the car they are selling. Therefore, not arranging a pre-purchase independent inspection poses a considerable risk to the buyer. Sure, you might be able to purchase the vehicle for a lower amount through a private seller to take account of the risk, but given the cost of car repairs these days (think thousands of dollars, not hundreds), spending a few hundred dollars on an independent pre-purchase inspection is a great investment and should buy you considerable peace of mind.

A Case Study

If the seller resists or denies your request to allow an independent inspection, you should seriously consider withdrawing from the deal. Here’s a real life case study recently brought to our attention by an ADF member. His experience is rather extreme, but illustrates the world of pain that can easily result without a pre-purchase inspection.

The ADF member concerned is a classic car enthusiast. He had always wanted to own an Italian sports coupe from the early 1960s. He found the “car of his dreams” at what appeared to be a great price through a licensed dealer who advertised on an internet car site. He arranged for a personal viewing. It was not in great condition. It had a bit of rust here and there (normal for cars of that age), the paint was fair, the interior was poor, but the car could be driven and registered after a bit of “tender loving care” (or so he thought). It was love at first sight and a great weekend restoration project which he thought he could undertake over the next few years at a reasonable cost.

After some discussion with the dealer and a further negotiated price reduction, he arranged for the car to be towed to a specialist classic car workshop of his choice for inspection (importantly, our member did not put down a “holding deposit” because getting these back is sometimes difficult).

The tow (one way) cost $300 and the pre-purchase inspection fee was $400. Sounds expensive, but as it turns out, it was money well spent. That afternoon, our ADF member visited the workshop to hear the verdict. Fortunately, he was sitting down at the time.

The Verdict

The inspector reported that the car had been in a major accident some years ago and that the repair had been poorly done. In order to fix that problem alone would be tens of thousands of dollars. Then there was the body rust. It wasn’t just “here and there” as our member had thought. It was everywhere. It was in most of the body panels and (fatally) throughout the chassis of the car. It had been covered up by body filler and the injection of foam into the chassis which was subsequently painted over and hidden. A well placed screw driver revealed the many and extensive problems in the body and structure of this car. In order to repair the problems permanently, the inspector estimated a cost of up to $100,000!

And then there was the engine. A cylinder compression test revealed that the engine would need a rebuild, estimated to cost between $30,000 and $50,000. And then, there was the interior…….

By this point (as you can imagine) our ADF classic car enthusiast had fallen out of love with his Italian dream car. He was facing a project that would require repair costs of at least $200,000. Worse still, the restored market value of the car would be well south of $100,000.

The seller claimed not to know about the extent of these problems. Our member was inclined to believe him as the seller showed no resistance to the idea of an inspection. Needless to say, our member did not go ahead with the purchase and was thankful that he had spent only $700 to uncover a disaster which might have bankrupted him.

Soon after, our member was surprised to see that the car went back on the market at the same price as originally listed. Let’s hope the eventual buyer had the common sense to arrange an independent inspection.

Arranging the Inspection

Arranging an inspection is not hard. Many motorists’ organisations and private companies offer this service, so you should take your time in choosing an offering that suits your budget and needs. Some dealers require inspections to be done on their premises. This can limit the scope of the inspection due to the lack of availability of hoists and specialist tools, so it’s up to you to decide if that requirement is acceptable.

There’s No Hurry

Remember this. There’s no need to hurry. Naturally, sellers will be keen to create in you a “fear of missing out” (FOMO), but there are thousands of cars on the market every day of the year. So if you miss out today on the “car of your dreams” due to a delay caused by your wish to arrange an inspection, be assured that another car like the one you chose will be on the market tomorrow. Just to prove the point that there’s something for everyone, on the day of writing this article there were 235,710 cars listed on one of Australia’s biggest car sites. We’re spoilt for choice, so take your time and think carefully before committing to what amounts to one of the biggest lifestyle investments you’re ever likely to make.

Your Consumer Rights

If you’d like to do some more reading on your consumer rights, be it with respect to cars or any other products or services, we recommend this educational material from the Australian Competition and Consumer Commission and this additional case study from our website.