Guide to Buying a Used Car: Tips and Checklist | Finder NZ

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Used car guide: Things to consider when buying a used car

Here are a few things you should know if you’re thinking of buying a used car.

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Buying a second-hand car can help save you money, but it also comes with a number of risks. It’s important you know what to check for to ensure you get a good deal.

Before you go for a test drive or start looking at financing options, read our handy guide and checklist so you know what to look for when buying a used car.

What you need to know about buying a used car

Used cars are vehicles that are pre-owned and bought from a dealership or private seller. The conditions of used cars vary greatly – they may be in almost-new condition or they may be nearing the end of their life. A benefit of opting for a used car is that they are generally cheaper than buying new, and you can sometimes find a good deal for a pre-owned car in great condition.

Of course, there are risks that come with buying a car that someone else has owned. Many common car problems may not be immediately obvious, and the owner may be unaware that a problem even exists. Unless you are a mechanic or have experience with cars, it may be hard to work out what condition the car is in. If possible, it may be worth taking the car to a mechanic to check for any issues.

Before you buy your used car, you should also do some research on the make, model and year of the vehicle to determine if it is suitable for you. You should also prepare some questions to ask the seller about the history and condition of the car, and prepare a checklist of things to look out for when you go to inspect the vehicle.

Where to find a used car

One of the benefits of getting a used car is that there are plenty of places where you can go to find one. There are advantages and drawbacks to each option, so make sure you choose the one that sounds right for you:

  • Online dealers. Online dealers operate used car websites where you can browse what’s available. You can find both licensed dealers and private sellers on these sites, and you will generally be able to get the contact details of the seller or contact them directly through the website.
  • Used car dealerships. If you would prefer to take a look at the cars themselves, you can visit one of the many used car dealerships where you can haggle in person. The benefits of working with a licensed dealer are that the car is often sold with a warranty, there is a cooling-off period and you may find the process easier as the seller will be experienced with used car sales terms.
  • Trading and selling websites. There are also websites, like Trade Me and Auto Trader, where people sell their own cars privately and where you might be able to pick up a bargain. With a private car sale, there is no warranty and you don’t get the cooling-off period that a licensed dealer offers, plus it is difficult to determine whether the seller is reputable.
  • Auctions. Turners operates online and live car auctions. Always research what the car is worth before you bid so you don’t overpay. Cars through Turners are generally sold “as is, where is” but you can arrange to take a test drive and have a mechanic check the car before auction day.
  • Car fairs. There are weekend car fairs held in the main cities where you can browse the cars on offer, chat to the owners, get a mechanical check and go for a test drive. Auckland’s Ellerslie Carfair is held 9am to 12pm every Sunday.
If you opt to go with a private seller, you should always arrange to inspect the car in person before you commit to buying it.

What you should do when looking to buy a pre-owned vehicle

Whether you’re looking to buy a pre-owned or new vehicle, it can be tempting to buy the first car that you like. But a car is a large ongoing expenditure, and it’s important to consider your options before making your final purchase.

  • Before you start looking for your car. Decide what you want. Do you want a big car because you need a lot of boot space, or do you want a small car to make it easy to park in the city? You should think about the car’s main use and then decide how many seats you want, what kind of features you’d like, fuel efficiency and running costs. You should also determine your budget, how old you want the car to be, and what you are willing to spend on a second-hand car.
  • When you start looking for your car. Do your research. Start looking online and visit a few used car dealerships. It doesn’t matter what seller you end up going with because it’s important to understand the current market prices and what’s available to you.See what options your budget will allow and the different types of cars that you are able to get, so when you find the car you want to buy, you can decide if you’re getting a good deal. You might also have some bargaining power when it comes to the purchase.

Questions to ask the seller

When you go to inspect a used car, you should take the opportunity to ask the seller a few questions about the vehicle, such as the following:

  • Why are you selling the car? It’s important to understand the reason why the seller is willing to sell the vehicle. If they have recently bought the car and are already looking to sell, it may have some serious issues that they have not told you about. It may also be as simple as they found it hard to drive or the seats were uncomfortable. The reason for the sale may or may not affect your decision to buy, but it is worth knowing.
  • Has it ever been involved in a crash or required serious repairs? A used car may look in fine condition, but it may have been involved in a major accident or needed fixing.
  • How many kilometres has it done? It can be quite easy to change the odometer reading on a car to hide how far it has travelled. A car that has done a lot of driving is more likely to break down, simply due to natural wear and tear.
  • Are you the first owner? You should check to see if the seller bought the car new, and if not, if they can provide documentation showing the ownership history.
  • Do they actually own the car? This may seem like a simple question, but it’s possible that they do not have the authority to sell the car in the first place, which could lead to serious complications if you go through with the purchase.
  • Are you prepared to negotiate on price? Both private sellers and dealers may be willing to drop the sale price, so this is a question worth asking.

If you aren’t satisfied with their answers or believe they may not be telling the truth, there are some further checks you can do for peace of mind before you commit to buying it:

  • Search the police database to check the car is not stolen
  • Search the personal properties security register (PPSR) to check if the car has debts (you’ll need your NZ driver’s licence, car’s licence plate, credit to pay the fee)
  • CarJam is another site you can use to find out the history of a car and if there is money owing on it

Used car buyer’s checklist

When you are inspecting vehicles or going for a test drive, use this checklist to make sure you note the car’s most important features to help you make an informed decision.

On your test drive

  • The gears are smooth and can be moved quickly
  • The engine power is appropriate to the car’s size
  • The car tracks and brakes steadily and in a straight line
  • The electrics and dials are fully operational
  • The temperature dials do not show any signs of overheating
  • The speedometer is functioning and displays your speed accurately
  • There is no irregular engine noise
  • You’ve checked the suspension and the transmission
  • You’ve checked the brakes and the exhaust

The car’s body

  • There is no sign of accident or rust damage
  • There is no sign of hail damage
  • There are no panel irregularities
  • The door and boot seals are intact
  • The upholstery is in good condition
  • There are no chips or variations in the paint

The car’s interior

  • The seatbelt shows no signs of wear and tear
  • The lights inside the car are functioning
  • The electronics, including the air conditioning, the audio and the windows, are working

The car’s exterior

  • You’ve taken note of the engine VIN and body number
  • You’ve checked the exterior of the engine
  • You’ve checked the engine oil and the radiator coolant
  • There is no corrosion of the tubes and brackets

      All the factors that come into play when you buy a used car can seem overwhelming, but you want to make sure that you’re buying a quality vehicle. Once you know what to look out for and after you’ve done your own research on what cars are available, you can make an informed decision.

      Used car financing options

      If you’re looking to finance your used car purchase, you have a few options available to you. Here are the financing options available for used vehicles:

      • Secured car loan. While some lenders will not approve a secured loan for a used vehicle, other lenders offer loans specifically for used vehicles if they meet certain requirements. These loan types require you to put up your newly-purchased car as security, but in return these loans generally have lower interest rates.
      • Unsecured loan. If you are unable to find a secured loan, you might want to take a look at your unsecured personal loan options. You don’t have to use your car as security for these loans, but you may find that the interest rates are higher because it is more of a risk for the lender. One of the benefits with an unsecured loan is that you are able to use the loan amount in any way you want, so you can use it to purchase the vehicle and also for something else if you choose.
      • Dealer finance. If you are buying the vehicle from a used car dealership, they may be able to offer you some financing options.

      Compare car finance now

      Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Establishment Fee
      Simplify Secured Car Loan
      6.50% - 12.50%
      $5,000
      $500,000
      12 - 60 months
      $276
      Eligibility: Must be 18+, a New Zealand resident or permanent citizen and have an income of at least $500 per month.
      Secured vehicle finance from $5,000 to $500,000.
      Motor Vehicle Finance Secured Vehicle Loan
      6.95% - 23.95%
      $3,000
      $150,000
      12 - 60 months
      $195 - $695 depending on lender
      Eligibility: Must be 18+, be an NZ citizen/permanent resident, and have an income of least $400 per week.
      Secured vehicle loans from $3,000.
      MTF Finance Secured Car Loan
      8.20% - 20.20%
      $2,000
      $100,000
      3 - 60 months
      $376
      Eligibility: Must be 18+, be an NZ citizen, resident or have a work visa, and have a regular source of income.
      Secured car loans from $2,000.
      Better® Secured Vehicle Finance
      6.95% - 23.95%
      $3,000
      $250,000
      12 - 60 months
      $195 - $695 depending on lender
      Eligibility: Must be 18+, be an NZ citizen/permanent resident, and have an income of least $400 per week.
      Secured vehicle loans from $3,000.
      The Lending People Car Loan
      6.99% - 26.99%
      $2,000
      $75,000
      1 to 7 years
      $50 - $695 depending on lender
      Eligibility: Be 18+, an NZ citizen or permanent resident, in employment and earning at least $500 per week.
      Secured and unsecured car loans of up to $75,000 from a variety of reputable lenders.
      Gem Secured Car Loan
      9.99% - 19.99%
      $6,000
      $70,000
      6 months to 7 years
      $240
      Eligibility: Be 18+, a permanent NZ resident and earning a stable income.
      Secured car loans with weekly, fortnightly or monthly repayment schedules and no fees for early repayment.
      Kiwi Car Loans Secured Loan
      6.85% - 23.95%
      $3,000
      $500,000
      1 to 5 years
      $195 - $995 depending on lender
      Eligibility: Be 18+, an NZ citizen, permanent resident or have a work visa, and have an income of least $500 per week.
      100% online secured car loans from $3,000.
      Max Loans Secured Vehicle Loan
      6.99% - 29.95%
      $1,000
      $100,000
      1 - 7 years
      $195 to $1,500 depending on lender
      Eligibility: Be 18+, an NZ citizen/permanent resident, and have an income of least $400 per week.
      Lending Crowd Secured Car Loan
      5.03% - 15.44%
      $5,050
      $200,000
      3 or 5 years
      $200-$1,450 depending on the amount borrowed
      Eligibility: Be an 18+ NZ permanent resident, have a good credit history and collateral/security.
      Borrow $5,050 to $200,000 for your chosen vehicle. 100% online with no paperwork or early repayment fees.
      CarPow Secured Car Loan
      8.95% - 23.95%
      $3,000
      $100,000
      N/A
      Up to $495
      Eligibility: Be 18+, hold a New Zealand Driver’s licence, and earn at least $500 per week.
      Secured car loans from $3,000.
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