Your rights and the pros and cons of buying a car privately, and what you can do to reduce the risk of common problems.
Advantages of private sales
If you do your homework and have some mechanical knowledge about cars, you can get a better bargain when you buy privately. You will also find more options to choose from if you’re on the hunt for a car under $10,000.
Private sales may also be more straightforward. Sellers won’t be interested in upselling or adding on extra costs.
Drawbacks of private sales
Buyers have fewer legal protections in private sales. You may get a cheaper price if you shop privately, but private sellers don’t have to:
- be registered
- display a Consumer Information Notice (CIN) on the vehicles they sell — a CIN provides important information about the vehicle’s history and any money owing
- comply with the Consumer Guarantees Act (CGA) or the Fair Trading Act (FTA).
However, if you do buy a car privately and have problems, you may have some rights after purchase if:
- you were persuaded to buy the car based on false information the seller gave you
- money is owed on the vehicle and it is repossessed by a finance company
- the seller didn’t have the right to sell the car
- the car seller should actually be a registered motor vehicle trader.
Dealer vs private?
If you buy a car from a private seller, are you protected by the Consumer Guarantees Act?
No! The Consumer Guarantees Act only applies to goods or services supplied by a business.
Read more about Solving issues with your private car seller
Set yourself up for success
Know what to do and expect before you buy from a private seller.
- Know what you want.
- Weigh up the risks of buying privately.
- Understand how much you want to spend.
- If possible and applicable, get pre-approval for a loan with the lowest interest rates you are offered.
- View any vehicle in person.
- Come prepared to ask the seller questions. If the vehicle is being sold ‘as is, where is’, ask for details of known issues.
- Do basic checks and test drive the car.
- Get the car inspected by a mechanic or a pre-purchase inspection service.
- Trust your instinct.
- Consider creating your own sales agreement or contract with the seller.
- Save copies of your sales agreement, the original advert and any other documentation related to the sale.
- Tell Waka Kotahi NZ Transport Agency the car has a change of owners. Both the seller and buyer need to do this. You can do this online through Waka Kotahi NZ Transport Agency’s Online Services.
Online services(external link) — Waka Kotahi NZ Transport Agency
Protect yourself from common problems
It’s even more important to be aware of potential issues if you buy from a private seller. You have few legal rights if something goes wrong. Protect yourself from buying a lemon with thorough checks and inspections.
You may also want to create your own sales contract between you and the seller.
Here are some commons risks to be aware of — and some tips to avoid them.
Protect yourself by always viewing and testing a car before you buy it.
Don’t rely on a valid warrant of fitness (WoF) as proof of the car’s reliability. A WoF doesn’t tell you anything about the mechanical condition of the car.
Get the car inspected by a professional mechanic or a pre-purchase vehicle inspection service.
Keep a copy of any adverts, details or promises the seller makes about the type and condition of the car. You will have proof if it turns out the seller was dishonest with you.
Arrange a viewing at a seller’s home or workplace. You may get a better sense of how trustworthy they are. You will also be able to locate them if something goes wrong. It could be a warning sign if the seller demands to meet you at a carpark or on the side of the road. If anything feels dodgy, walk away. Tell someone where you are going beforehand. Take someone with you for support whenever possible.
When you buy a car from a private seller through an online sales site like Trade Me, complete the sale through Trade Me rather than independently. This allows you to leave reviews or report the seller if they haven’t been honest about the state of the car.
If the seller still owes money or the lender has a security interest on the car when you buy it, the car may be repossessed if you don’t pay back the money that is still owed.
Use Personal Property Security Register’s TXTB4UBUY service to make sure there’s not money owing on the car.
Welcome to TXTB4UBUY(external link) — Personal Property Securities Register
Using the car’s registration number or vehicle identification number (VIN), check if the vehicle is listed as stolen.
Stolen vehicles(external link) — New Zealand Police
‘Clocking’, or odometer tampering, is the illegal practice of turning back the odometer reading so the car appears to have less mileage on it.
A vehicle history report will show any inconsistent odometer readings. These are available online through a number of providers. You can also look for signs of tampering, e.g. if the vehicle looks well-worn but the mileage is low.
Sellers should be registered as a motor vehicle trader if they:
- are in the business of selling cars
- sell more than six, or import more than three, vehicles in a 12-month period.
Some dealers may pretend to be private sellers so they can get rid of lemons or avoid their responsibilities if there’s a fault later on. It’s not easy to tell. To protect yourself, learn as much as you can about the seller beforehand. Look for multiple listings on Trade Me or spare parts or vehicles around the seller’s home when you view the car.
You can also search the seller’s name on the Motor Vehicles Trader Register to see if they are listed as a registered trader
Motor vehicle trader search(external link) — Trading Standards
Be wary if someone says they are selling on behalf of a family member. This is a common ploy a dealer may use to explain why their name isn’t on the vehicle’s paperwork.
Read more about solving problems with a private vehicle seller