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Before you buy a car 

Buying a new car or motor cycle can be an overwhelming experience with so many considerations.  So, its important that you consider a range of issues and undertake a number of checks before buying a vehicle.

Negotiating the deal 

All the research and inspection efforts you put in will provide you with information valuable to negotiating the best price. If an inspection reveals that you may need to pay for certain repairs, you may be able to negotiate a lesser price because of it.

If you need to obtain a loan to purchase the car or motor cycle, make sure you shop around. Many motor dealers are able to offer finance but you may get a better deal from your own bank or credit union.

There is a ‘cooling-off period’ that applies if you purchase a car from a dealership and the dealership:

  • arranges your loan for the car, or
  • supplies application forms for, or a referral to, a credit provider. This is called a linked credit arrangement.

Under these circumstances only, there is a ‘cooling-off period’ giving you 1 day to change your mind. The cooling-off period begins when the contract is entered into and generally closes at 5pm on the next day that the dealer is open for business.

Note that the cooling-off period does not apply to motor cycle purchases.

During the cooling-off period the purchaser can cancel the contract by signed, written notice given to the dealer. The purchaser will be liable to pay the dealer $250, or 2% of the purchase price, whichever is the lesser amount.

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Buying the car or motor cycle 

Have you completed all the inspections? Make sure that:

  • the seller and the name on the registration relate to each other
  • the identification numbers on the vehicle, and those listed on the registration papers, match
  • any necessary safety check forms have been provided (such as a pink slip or blue slip)
  • a PPSR check for previous owners’ debt has been satisfactorily completed
  • a vehicle inspection has been satisfactorily completed.

Has a price and a means of payment been agreed upon between you and the seller? If you have answered ‘yes’ to the above questions and are happy to proceed with the purchase, you need to do the following:

  • ask the seller to complete and sign the back of the certificate of registration. If the vehicle is registered in two names, both people must sign
  • ask the seller to give you a receipt that shows:
    • your name
    • the date you bought the vehicle
    • the amount you paid for it
    • the vehicle’s VIN or chassis number, and engine number
    • the seller’s driver’s licence, name and signature
  • check that the seller’s signature on the receipt matches the signature on the seller’s licence.

Remember that the receipt is the only proof that you now own the vehicle. The Roads and Maritime Services certificate of registration shows only the person who takes responsibility for the vehicle, it does not prove ownership.

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Before you drive away 

Make sure the seller gives you:

  • all keys including those for the ignition, glove box, boot and alarm
  • the service books, owner’s manual and log book
  • instructions for working and de-activating any alarm
  • location of the hidden ignition switch if there is one
  • radio security number.

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Stamp duty 

Revenue NSW levies stamp duty when a vehicle is registered in a new name.  Roads and Maritime Services collects the stamp duty on Revenue NSW's behalf.  You will pay stamp duty on the market value of the vehicle or on the price you paid for the vehicle, whichever is higher. 

Stamp duty is 3% of the market value of the car, up to $45,000 then 5% on the value over $45,000.

For example, the stamp duty for a vehicle with a market value of $50,000 is calculated as follows:

$45,000 at 3% = $1,350

$5,000 at 5% = $250

Total stamp duty to be paid = $1,600

Calculations are provided by Roads and Maritime Services and are correct at time of publishing. Please check with Revenue NSW or Roads and Maritime Services to confirm.

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Use the checklist below to ensure you remember the key steps in buying a car or motor cycle:

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