DEALER
Buying from a licensed used car dealer (LMCT) has advantages for many buyers. Each state has statutory requirements to provide some form of warranty, depending on age and mileage, but there can also be exemptions so make sure you understand the exact terms of your purchase.

You'll be able to trade-in your old car. Because this drive-in, drive-out facility incurs significant expense in the buying and selling process, be aware that dealers must allow for this in the gap between trade-in and retail pricing.

Weigh up whether you are better off disposing of your own trade-in. Most reputable dealers will actually tell you if trading your old vehicle is going to harm the deal.

A dealer car is more likely to be properly prepared for sale in roadworthy condition. You will have ample opportunity to inspect and drive the car prior to making your decision. You have numerous legal rights including a 'cooling-off' period in some states.

Dealers are subject to much tougher laws than private sellers and stand to lose their livelihood if they break the law.

Licensed dealers can be more realistic about price than private owners. In most states, the dealer also guarantees title, which takes the risk out of buying a stolen car or one where finance monies are still owing.

Franchised dealers (dealers which sell a new car brand) usually have the pick of the best trade-ins and have access to internal factory auctions for near-new executive cars and company fleets.

Some so-called 'program cars' can be ex-rentals but if they are maintained properly they can be your best chance of getting into a near-new car. In most cases, these dealers can also offer an extension of the factory warranty.

FLEET SALES
As more employees opt for a company car as part of their salary package, more companies are outsourcing their company car requirements to specialist fleet management companies. By cutting out the middleman and selling direct to the public, these fleet management companies try to improve on the auction price while selling under dealer retail.

These companies can be a good value source of near-new cars, especially if the car is still under new car warranty. Be aware, however, that many company cars are turned over quickly because of severe use.

Some fleet disposals give the trade first option for faster turnover so also be aware that the best stock may already have been picked over by the trade and other internal buyers.

AUCTION
An auction can be the cheapest place to buy a used car -- and consequently is also the place where you are likely to get the lowest price if you sell. You have fewer rights at an auction, so it's not a place for the inexperienced. It is essential you do a trial run before trying to bid, and a good idea is to take someone who knows about motor vehicles.

Simple rules you should never forget when bidding at auction:

• Decide on a maximum value for a vehicle and don't bid past this.
• Some vehicles are 'Sold as Seen' which means you take all the risk.
• Cars that would fail an extended road test are often sold at auction.
• Understand the auctioneer's terms and conditions before you bid! Check whether a purchase is subject to auctioneer's fees.
• Visit the auction house when everything is quiet and find out as much as you can about each car that meets your requirements before the actual auction. Narrow down the cars you intend to bid on.
• Usually, you will need to get the roadworthy certificate and in some cases you will also need to re-register the vehicle. Allow for this in any bid.
• Some auctions set reserves that are not much cheaper than a dealer. Is there enough margin to cover the extra risk? Cars with balance of new car warranty can lower this risk, but make sure the warranty has not been rendered void because of theft or poor servicing.

PRIVATE SALE
If paying for the services provided by a dealer doesn't really appeal, there's always the private route. The major benefit when choosing this source is that prices are generally cheaper and you can meet the previous owner.

It is also one of the few sources of older used cars when there is not enough margin for a dealer to cover preparation and statutory requirements.

Buying privately means exactly that -- genuine private vendors selling a privately owned car. However, certain unscrupulous 'traders' and individuals may pretend to be private sellers to avoid their legal obligations and in some cases, may be acting as a disposal conduit for trade-ins too old or not good enough for a used car outlet.

An extension of this that really upsets licensed dealers is when they see a trade-in they have sold at auction (usually because the kilometres were too high or the condition was not good enough for their own yards) reappear at auction or private sale. In these cases, the vehicle's history may have gone missing and a new instrument cluster has been fitted with a much lower odometer reading.

If a car seems too cheap, it is too cheap, so look for the reason.

Thieves, scammers and backyard repairers pick popular cars and price them cheaply so that buyers rush in and don't ask questions. The reality of the Australian private used car market is that it carries a high risk of purchasing a re-birthed stolen car. There is also a good chance of buying an insurance write-off that has been put back on the road after repair short-cuts have been carefully concealed.

Until new data collection systems are fully linked across Australia with consistent inspection procedures to close these loopholes, private buyers need to be extra careful.

If you choose to buy privately, you are buying outside the consumer protection structures that apply to a dealer purchases. The checks that a dealer is compelled to make by law are of no benefit in a private sale.

KNOW THE SCAMS
It helps to know the scams... For instance, thieves are so organized that they will steal a car to match the exact specification of a wreck they have purchased at auction. After transferring the identity of the wreck to the stolen car, the stolen car is re-registered as if the wreck had been repaired and legitimately put back on the road.

As state wreck registers close this scam, stolen cars are being dismantled to rebuild wrecks that escape the system. Also be aware that these state wreck registers drop out after a certain period -- usually when a vehicle is over 15 years old. Not surprisingly, rebirth and theft activity increases as soon as a vehicle hits this age.

A registration check may show a gap in the car's registration but if a car's history was interrupted interstate, registration gaps will not show up. Cross-referencing the car's numbers with your state's Wreck Register is a good start but because there were gaps before the national link was fully functional, this check is not infallible.

Any gaps in the car's history that cannot be explained must be investigated as they could indicate a car that has been stolen or has been off the road for a major repair. Near-new cars that are missing owner's manuals and service histories or rely on documents that cannot be verified by a service centre should generate alarm.

The other warning sign is a non-original mixture of keys and remote key pads.

Changing and matching locks including the steering column/ignition key and re-programming the body computer to accept a new keypad is neither cheap nor easy. If the keys and locks are not what they should be, there needs to be some level of documentation to explain why.

Write-Offs: What you need to know
Extreme weather conditions across Australia are generating more frequent insurance write-offs after vehicles suffer extreme hail or flood damage. These are providing fertile ground for a new range of scams waiting to catch unsuspecting buyers.

Adding to these new risks are the collapsible sections of most modern cars that need to be replaced after a collision. The difference in cost between a reputable repairer replacing these sections and a backyard repairer stretching them back into shape and hiding the evidence is creating another lucrative source of income for the unscrupulous.

Under the latest state systems and registers which are being progressively linked across Australia, there are new vehicle write-off classifications and procedures to monitor weather or crash-damaged write-offs if they come back for registration.

If a vehicle is declared to be a write-off never to go on the road again, this vehicle and its identity are removed from the system. It's stripped of identity and classified as a "statutory write-off" so it cannot be used to re-birth a stolen car.

However, its parts can give another class of "write-off" a new lease of life and it's this other category of which buyers still need to be wary.

It's called the "economic write-off", a vehicle that an insurance company has decided is not financially viable to repair. It is allowed to keep its identity because there might be someone else out there who decides that it is viable to put it back on the road.

There are new systems in place to ensure that the identity of an "economic write-off" is not transferred to a stolen car. In most cases, this will include a detailed record of why the vehicle was written-off and details of repairs that were needed. Anyone returning such a vehicle to the road will usually be required to submit the vehicle for an intensive inspection by a special licensed inspector who is given full details of why the vehicle was written-off.

These inspectors are required to check the damage has been rectified and should insist on a full paper trail covering the source of all parts used in a repair. In most states, inspectors must also be satisfied that vehicle presented is the actual "write-off" that has been repaired if it re-appears for registration. However, not all state systems and inspectors are geared to checking the integrity of the repair.

Because not all states have adopted uniform inspection charges and fees, not all inspections are as rigorous as they need to be.

It is this aspect that is behind some of the nightmare scenarios showing up in recent current affairs programs that are even catching out licensed traders, according to our sources working within this system.

Shifting an "economic write-off" across a state border can make it difficult for dealers and private buyers to identify one of these vehicles if not all state databases are linked. Once such a vehicle is re-registered in a home state where the inspection procedures are slack, it can slip through a simple registration transfer as soon as it is moved interstate.

There is now a strong push for uniform procedures and resources across Australia. Until this occurs, the state or territory least-equipped to intercept these scams will be used as a clearing house for poorly-repaired wrecks.

Although the system in most states is now geared to making sure that a stolen car is not registered while wearing the identity of an "economic write-off", our sources warn that it is not infallible -- especially where the damage is not so obvious (see below).

There are also reports that thieves are stealing vehicles, removing just enough expensive parts to make it an "economic write-off", storing the parts until the stripped car comes up for auction then re-uniting it with the parts that were removed.

Flood Damage: What you need to know
Inconsistencies in assessor standards can catch out the unwary used buyer. If a car is totally drowned in salt water for example, some assessors will classify it as a "statutory write-off" while another will declare it an "economic write-off" so it will fetch more at auction.

Believe it or not, grey areas such as whether the tide was in or out in a tidal river section can be used to swing the decision one way or another.

An opportunist might then buy it, dry out the various parts, replace anything with a water mark, re-register it, then sell the car.

In some cases, flood-damage has caused the entire new car stock of some dealers to be written-off as an "economic write-off" so some will appear brand new when they come up for sale. It is not unknown for these cars to be presented with a thin veneer of history while their CD stackers are still filled with silt!

Any modern car that has been drowned in fresh or salt water is guaranteed to create nightmare long-term problems with electronics, bearings, electrical components, wiring and other water damaged components as corrosion attacks parts that cannot be accessed and repaired easily. When even tail lights, headlights and remote locks can contain complex circuitry, the damage bill can be horrendous.

When there is no panel damage or body repairs required, a water-damaged write-off can also be of extra interest to car thieves if there are no visible areas to tip off a state inspector that it is not the wreck being presented for registration.

THE BOTTOM LINE
Essentially, if a used vehicle has a broken registration history in the state of purchase, check out why.  If it shows up as an "economic write-off" or was interstate for any period, again, find out why.

Be extra careful if a vehicle has been moved interstate. Even if the vendor's story sounds convincing, it's worth checking with authorities wherever it's been. If it's a near new vehicle that should still be under warranty, check with the manufacturer.

If an insurance company wasn't prepared to foot the bill to put it back on the road, the chances of someone else taking shortcuts are almost a given.

And remember, all of the above concerns can be avoided (or at least absolutely minimized) -- by buying from a reputable, well known, licensed dealer.

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