The risky business of a budget
BUYERS WHO KNOW PROTOCOLS CAN MAKE LIMITED FINANCES WORK
Martin is in the market to buy a cheap car, and although he knows the risks involved, limited finances and the need for a car has forced him to the basement level of the used-car market.
His budget is $6000 and he asks whether he should buy through a dealer or privately.
“I believe dealers are governed by certain rules which provide buyer protection if there are problems after purchase, so am I better to take this option and not even worry about a pre-purchase inspection?” he asks.
He also notes that some private sellers are asking less than dealers for the same make/model.
You do walk a tightrope buying in this price range, regardless of whom you purchase from.
Yes, registered motor vehicle traders are required by law to follow certain protocols regardless of a vehicle’s asking price, but it would be dangerous to assume every mechanical failure or issue was their responsibility after purchase.
The Consumer Guarantees Act states a vehicle must be fit for purpose at time of sale, which loosely translates into meaning the dealer hands over the keys in good faith and with the vehicle having no known major mechanical issues.
If mechanical issues arise, the owner must give the dealer the opportunity to inspect and correct those faults if they feel it is their responsibility to do so, which can be a very grey area.
The even greyer area is: there is no time frame on how long a vehicle must remain fit for purpose. The reality is: the cheaper the vehicle, the smaller the window of opportunity to return it to the dealer and ask them to rectify faults at their cost.
Obviously if a transmission or engine suffers a major failure the day after purchase through no fault of the new owner, the dealer must take full responsibility. If the same fault occurs six months after purchase, it could be a different story.
If you buy cheap, you have to expect mechanical issues during ownership.
Owners can, through a disputes tribunal, challenge a dealer’s decision not to pay for mechanical repairs after purchase.
Is buying privately a better option? Yes and no. Not every private seller is going to be totally honest with a potential buyer.
They can’t legally misrepresent the vehicle but they don’t have to tell the total truth either.
Bottom line is: you can always buy cheaper privately but...
Dealers must display a Consumer Information Notice outlining any money owing, general history and known faults. A Warrant of Fitness must be issued at time of sale and new owners have some protection under the Consumer Guarantees Act.
It’s the private buyer’s responsibility to check history, money owing, or whether the vehicle is stolen, and to insist on a warrant that’s not more than one month old at time of collection.
Whichever way you go, always have a pre-purchase inspection by a reputable company.