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Australia - Buying or Selling a Car

One of the main points to be aware of is that the purchase price of a car is not necessarily the final price that you will pay. Tax is payable on the purchase price and many sellers do not include this so you need to factor it in to the price you have to pay.

When you are looking for a car you can hire an organisation such as the Australian RAC to check the car and inspect it for any defects and problems. You can purchase a car through a dealer, at an auction or through a private sale. If you purchase a car from a dealer then you have a certain number of guarantees such as ownership and protection from the Motor Dealer’s Compensation Fund. Each state has a different view on the minimum length of warranty that you can expect when buying a car from a dealer, although if you purchase a second hand car that is less than 10 years old and with less than 160,000 km on the clock you can expect to get a 3 month or 5000km warranty. In some states there is often no legal requirement to give a warranty.

If you choose to purchase your car from an individual seller then you have the right to check the Register of Encumbered Vehicles that will inform you of the legal registered owner. If the car is not encumbered you are able to purchase a REV’s certificate for a small sum. This will stop others making a claim on the vehicle at a later date. This information can be checked on the REVs website. The information that you get can tell you if the car has been stolen, written off in the past by an insurance company or is still being overseen by a finance company.

There are a number of fees involved in buying a car in Australia. The first is a registration transfer fee which varies from state to state but in some states stands at around $25. Stamp duty is also payable on car purchases. This varies from state to state and will be based on the value of the car. For example, in Queensland the stamp duty rates currently stand at $300 for a car which is valued at $10,000 or less, $600 for cars valued between $10,000 and $20,000, $1200 for cars valued between $20,000 and $40,000 and $2400 for cars that are valued between $40,000 and $80,000. It is advisable to find out the rates in advance in your area before you purchase as these are subject to review.

All those buying a car should also be aware that motor vehicle tax is paid annually and this also varies according to the state that you live in and the size of the car. Compulsory third party insurance should also be in place before you drive any car.

Luxury car tax is payable on cars worth more than $57,009 but this is only if you purchase a car from a dealer. When buying such a car privately from an individual this does not apply.

A buyer must complete a form for the transfer of ownership within a set period of taking possession of the car. The form should also be signed by the seller. This form is the certificate of registration and you should ensure that the seller has this before you complete the purchase. You should not take the car without having seen and signed this form. The buyer should send the form in and the seller needs to send in a notice of disposal. If the car you want to buy does not have a current registration then you can apply for registration and take out insurance before you drive the vehicle.

In some states it is essential to have an immobiliser fitted and you will need to declare that this has been done when the car is transferred to the new owner. The regulations for your state can be obtained from the website of their transport department. Documents may need to be submitted with proof of ID and age. When the relevant documentation has been received you will be sent an invoice for any relevant fees. This invoice must be paid promptly as per the instructions given as penalties will be applied otherwise.

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