Buying a Car Essentials

There is no cooling off period in Western Australia

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If you change your mind about buying the car after you have signed the contract, you may have to pay 15% of the purchase price to the car dealership. This is usually stated in the fine print of the contract. If the car dealership requests payment of the 15% and you fail to pay, it may start legal proceedings against you in a court.

Check what you are signing. Be wary of a seller asking you to sign a document so it can ‘hold’ a car for you. Read the document and see if it is a Contract to Buy a Motor Vehicle. If so, only sign if you are sure that you want to buy the car.

Make Your Contract Subject to Finance

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Making a contract to buy a motor vehicle ‘subject to finance’ enables you to get out of the contract if you cannot obtain finance. You are required to make reasonable attempts to obtain finance. If you are unable to obtain finance, write to the car dealership to inform them that you have made reasonable attempts to obtain finance but have been unsuccessful.

You can also specify that the contract to buy a motor vehicle is subject to finance from a particular lender or that repayments are not to exceed a weekly amount.

Check that there is no security over the car

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If you buy a car privately and the previous owner has not paid out their car loan, their credit provider could repossess the car from you. To find out whether the car has a security over it, search the Personal Property Security Register:

Don't Get Caught Out Buying a Lemon

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Whether buying privately or from a car dealership, you have the right to have the car checked for mechanical defects by a qualified mechanic. A mechanic can provide you with a report that will identify any problems. This is a small price to pay to avoid expensive repairs in the future. It may also give you some bargaining power over the purchase price.

Be Wary of Expensive Accessories

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Often, a car dealership will offer special features to car buyers such as rust proofing, window tinting and upgrade kits with fancy names such as X packs. The cost of these extras can add thousands to the purchase price but rarely increases the value of the car.

Consider Upfront and Ongoing Running Costs

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There are upfront costs associated with buying a car that you should factor into your budget. Vehicle licence duty is a tax paid to the Office of State Revenue. It is charged as a percentage of the value of the vehicle. To calculate vehicle licence duty, visit the Department of Transport website at

You should factor in ongoing running costs such as petrol consumption and registration. Servicing a car can also be expensive. When you go to sell the car, potential buyers will usually request to see the service history. Often the car dealership will recommend that you have the car serviced with its service department. This can be significantly more expensive than servicing by other mechanics. You are not obliged to service the car at the car dealership where you purchased the car.

Factor In Insurance

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If you have a car accident and you are at fault, you may need to pay for any damage you caused to other cars. Car repairs can be expensive and it is common for people without insurance to be left with a large debt. Generally, the more cover you get the more it costs. The four most common types of insurance are:

  • Compulsory Third Party (CTP): CTP is paid as part of your car registration fee. This covers you against personal injury to third parties, but it does not cover you against damage to vehicles.
  • Third Party Property: covers you for damage you cause to a third party's car, but it will not cover damage to your own car.
  • Third Party, Fire and Theft: covers you for damage you cause to a third party's car and costs you incur as a result of theft or fire damage to your car.
  • Comprehensive: covers you for damage to both your own car and a third party's car as a result of an accident. This type of insurance gives you the most cover and is also the most expensive.

Transferring Vehicle Ownership

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You and the seller will need to complete a Notification of Change of Ownership form. This is available from a Post Office and is a carbon form that includes a copy for you and the seller. The seller must send their copy of the form to the Department of Transport within 7 days of the sale of the vehicle and you must send your copy of the form to the Department of Transport within 14 days of purchasing the vehicle. Failing to do so may result in a penalty.

After submitting the Notification of Change of Ownership form, you will receive an invoice requiring payment of vehicle licence duty and transfer fees within 28 days. Failure to pay may result in an infringement.