The Young Australian's Guide to Buying & Running a Car

For most people in their 20s, a used car makes more financial sense than a new one. The reason is depreciation — new cars lose around 15–20% of their value the moment they're driven off the lot, and a further 10–15% in the first year. By year three, a new car is typically worth 40–50% of its purchase price. Buying a two or three-year-old used car means someone else has absorbed that depreciation hit on your behalf.

That said, new cars come with a manufacturer's warranty, no hidden history, and the latest safety features. If peace of mind and financing terms matter more than maximising value, new isn't irrational — it just costs more.

When buying used, you have two main options: dealer or private sale. Each has distinct tradeoffs.

• Dealer purchase: Higher price, but comes with statutory warranties under Australian Consumer Law (see Part 6), the ability to negotiate on add-ons, and the security of a registered business. Dealers must also meet roadworthy requirements before sale in most states.
• Private sale: Lower price, but no statutory warranty and more risk. You're buying the car as-is — if a problem emerges the day after you drive away, there's no one to go back to. Due diligence is essential.
• Negotiating price: Research the market on CarsGuide and carsales.com.au before any negotiation. Know what comparable cars are listed for, and what they actually sell for. With dealers, the sticker price is a starting point — not the final word. Be willing to walk away; this is genuinely the most powerful negotiating tool you have.

Before handing over any money for a used car, you need to check what you're actually buying. Vehicles can have outstanding finance, be reported stolen, be written off after an accident, have had their odometer wound back, or have their identity cloned from another car. A $2 car history check can save you tens of thousands of dollars.

The Personal Property Securities Register (PPSR) is the official government database for checking a vehicle's financial and legal status. A search costs $2 and tells you whether there's money still owing on the car, whether it's been reported stolen, whether it's been written off (repairable or statutory), and whether it has an encumbrance (a legal claim) registered against it.

If there's finance owing on a car you purchase, the financier can legally repossess the vehicle even though you paid the previous owner in good faith. The PPSR check is not optional — it's essential for any private sale purchase.

• PPSR search: Go to ppsr.gov.au. You'll need the VIN (Vehicle Identification Number) — a 17-character code usually found on the dashboard near the windscreen or on the door jamb. Not the number plate.
• Written-off vehicles: A repairable write-off has been seriously damaged but repaired. A statutory write-off has been declared unfit for registration and cannot legally be re-registered. Some states have their own written-off vehicle registers — check your state's road authority in addition to the PPSR.
• Independent inspection: For any car over $5,000, getting an independent mechanical inspection ($100–200) is money well spent. The RACQ, NRMA, RAA and similar organisations offer pre-purchase inspection services. A good mechanic will find things you'd never see.