The 5 important steps to buying a used car

1. General inspection

Good light is a must and the car should be clean and dry, or you may miss defects in the panel work. Use our checklist.

2. Test drive

Again use our checklist. The drive should take up to half an hour and it helps to have someone with you to assess some of the items on the list.
Make sure you include some speed driving on the motorway or open road, and some hill work for checking the gears and handbrake.
Although fine weather is good for the inspection, rain can be helpful for the drive. You’ll give the wipers (and possibly the tyres) a better workout, and you might even discover a leak or two.

3. Mechanical inspection

Most of the time it’s not a good idea to use a mate. If they miss something, it’s bad luck. But if you pay a specialist inspection service or your own garage or mechanic, they are obliged under the Consumer Guarantees Act to do the job to a reasonable standard according to your instructions. If they get it wrong, you can hold them liable for any losses you incur.
A full pre-purchase inspection wil cost up to $120. Not much in the total cost of the car.

4. Paperwork

The car itself is only half the story. There’s also a lot of documentation to check, especially if you’re buying from a
dealer.
Warrant of fitness Every vehicle sold by a dealer must have a warrant of fitness less than one month old. Private sellers have the option of selling without a warrant, provided the car is clearly identified for sale ‘as is where is’.
Consumer information notice A dealer (but not a private seller) is required to attach to every motor vehicle for sale a ‘supplier information notice’ (CIN).

 
The information that must be disclosed in the CIN includes:
• The name and business address of the dealer.
• Whether the dealer is a registered motor vehicle trader.
• The cash price of the vehicle.
• Whether any security is registered over the vehicle.
• The year in which the vehicle was manufactured (or the manufacturer’s designated ‘model year’).
• The make, model, engine capacity and fuel type of the vehicle.
• The year in which the vehicle was first registered in New Zealand or, if the vehicle was first registered overseas, the year of that first registration.
• The odometer (distance travelled) reading, or a statement that the odometer reading is or may be inaccurate.
• Whether the vehicle is recorded on the motor vehicle register as having been damaged when it was imported.

 
If you buy the car, you must be given a copy of the CIN.
Debts If you buy privately, your car could be repossessed if there are any outstanding debts on it. Use a vehicle history checking service to find out if the car is free of debt.
If you buy from a registered motor vehicle dealer, you won’t be liable for any such debts, unless you were told about them.
Ownership The certificate of registration, which you should be shown, lists the current registered owner of a car. This should be the company or person – whether dealer or private – you are buying the car from.
If you’re in any doubt about the ownership of a vehicle, call the police. They’ll you if it’s been reported stolen.
Sale agreement If you’re buying from a dealer, they must provide you with a written sale agreement and the Supplier
Information Notice which you have signed. Don’t sign an agreement until you have read and understood all the clauses, particularly those regarding interest rates and warranty costs.
Beware of documentation fees charged by the dealer.
Change of ownership Both the buyer and the seller have to fill out forms available from an LTSA agent (such as New Zealand Post) or use the NZ Transport Agency’s online transaction centre.

 
The buyer pays the fee and is ultimately responsible for the changeover.
If you’re selling privately, make sure the changeover really has happened before you release the car. You don’t want speeding or parking tickets turning up addressed to you.

5. Finance

Dealer finance is often expensive. You’ll probably get a better deal from a bank. With any loan offer, check the time to repay, the monthly payments and the total cost of credit over the term of the loan.
All lending organisations must provide this information, to allow you to compare the deals they offer. If the dealers offers an interest-free loan, check there are no extra hidden fees and that the asking price hasn’t been inflated.