Whilst buying a vehicle from a private seller may be cheaper than buying from a licensed motor vehicle dealer, private sales offer significantly fewer legal protections. For example, there is no cooling-off period on the purchase and the vehicle is not covered by a statutory warranty. This means that if anything is wrong the vehicle, or not as advertised, the law will not offer you any remedies or sanctions against the seller for their misconduct.
Before you buy a vehicle through a private sale, there are some simple steps you can take to ensure that you are not getting ripped off or scammed:
The responsibility also lies with the purchaser to check that the vehicle has not been stolen, does not have money owing on it, is registered (or if unregistered, is registerable), or if the vehicle has previously been written-off and repaired. In Victoria, to see if a vehicle still has money owing on it you can fill in an online form to complete a Registration Check via the VicRoads website.
Some tips to help you avoid buying a stolen vehicle:
You can also complete an online form for a small fee through the Australian Government’s Financial Security Authority website to check if a vehicle is free from debt, safe from repossession, not reported written off or not reported stolen.
What happens if there is a fault with the vehicle you purchased from a private seller?
The Australian Consumer Law does not offer protections to consumers who purchase goods from a private seller who is not a registered business. Examples of private sales include goods sold over Amazon, Gumtree, or eBay. A seller may be the owner of a business if they have a registered ABN (Australian Business Number), have a high volume of sales, or have been trading for a number of years.
Whilst the law in Victoria does not offer you a warranty or any protections on a private transaction, the seller is still required to ensure that you receive clear title to the item. This means that no one will try to repossess the vehicle, and that no money is owing on the vehicle. For example, if a car was stolen or sold without the consent of the owner, the original owner may have a claim to take back the car.
If the seller does not rectify the issue with the vehicle directly with the purchaser, you may be able to escalate the issue with the service that enabled the sale. For example, eBay and Gumtree have their own dispute resolution methods that they can employ to help try and fix your issue. If you used PayPal to process the payment for an item bought online you would be offered some protection under PayPal’s policies.
If you are unable to resolve any of these issues with the seller, there are a few formal paths you can take. In Victoria, you can make a claim for compensation to the Victorian Civil and Administrative Tribunal (VCAT) under the Civil Claims List. If you or the seller are located interstate you would need to file your Claim with the tribunal located in the State where the seller lives. If you or the seller are located overseas, you should seek independent legal advice.
Where possible, we encourage purchasing a used vehicle from a registered used dealership as they offer you a statutory warranty of three-months or 5000km, and you are entitled to a three-day cooling off period if you change your mind about the purchase.
If you think that you have been scammed or mislead in the private sale of a vehicle, please contact us to speak to a lawyer about your situation and what potential actions might be available to you.
Written by BCLS student volunteer Lauren Solomonson.