Second hand car buyers urged to take caution after floods, says Youi

The recent spate of floods on Australia’s east coast have presented unique problems for many, with people around the country both directly and indirectly affected.

Youi is warning second hand vehicle buyers that flood-affected cars may make their way onto the used car market, potentially causing future repair costs to soar beyond the initial savings.

“Supply issues caused by Covid have driven up the cost of secondhand vehicles, which unfortunately means buyers might be more susceptible to purchasing a car that initially seems like a bargain but could end up costing thousands of dollars in repairs,” says head of vehicle and leisure claims at Youi, Adam Keir. 

The Insurance Council of Australia reports that over 18,000 motor vehicle claims have been made since the flooding began, with that number expected to rise. 

“Although most cars in Australia are insured, unfortunately many are not and these are the vehicles that are of concern at the moment as they are at risk of being sold to unsuspecting buyers,” Mr Keir said.

An uninsured car is less likely to be repaired. Instead, the owner may choose to get rid of it on the used car market. That’s why it’s recommended that you do a few checks before you shake on a bargain.

Before you go buying a used car, there are a few things you need to know about the vehicle in question. 

There are lots of common mistakes that people make when buying a secondhand vehicle. But some are less obvious.  

“I’d strongly encourage those looking to purchase a used car to have a pre-purchase inspection carried out as well as undertake a ‘PPSR’, which identifies vehicles that have been written off, stolen or have debt attached,” Mr Keir said.

A pre-purchase inspection is carried out by an expert (like a mechanic) who will look over the vehicle for any faults and take it out for a road test. 

These inspections cover the interior and exterior of the car, including the engine, wheels and tyres, brakes, and suspension. 

It’s a really useful way of understanding if there are any issues with the vehicle, so that you know what you’re buying, and aren’t hit with shock bills later on. You may even choose to use it as a bargaining chip, especially if you know you’ll need certain repairs done before you drive it away. 

After completion, you’ll receive a written report for your records.

What is a PPSR (Personal Property Securities Register) check?

The Australian government’s Personal Property Securities Register (PPSR) will let you know if the used vehicle you’re looking at purchasing is likely to be free of debt, has been written off, or even stolen. 

For as little as $2, you can search up the car’s Vehicle Identification Number (VIN), also known as the serial or chassis number. 

After completion, you’ll receive a search certificate, which can be used as a legal record of your results.

There are signs you can use to identify if a vehicle you’re looking to purchase has water damage. These include:

• An unusual odour or smell 
• Discolouration of components
• Tide lines 
• Water residue in spare wheel wells or door pockets
• Warning lights on 
• Rust on any exposed metal.

If you’re looking at buying a used car, but don’t have all the money to pay it off up-front, then a used car loan could be the option for you. 

Depending on your income, you’ll typically be able to borrow between $2,000 to $70,000 for a used car and pay it off anywhere between 1-7 years. So, if you’re after a car loan to help you buy a second-hand car, our car loan comparison tool can help.

Wondering if a used car loan is right for you? Make sure you read up on everything you need to know about used car loans before comparing lenders.

Once you've purchased a used car, the responsibility of having it insured falls on your shoulders. 

So, before you drive away with your new set of wheels, make sure that you meet the minimum insurance needs of your state or territory. This is usually Compulsory Third Party insurance (CTP). 

However, if you’re buying a used car, you might consider putting the money you’ve saved towards a comprehensive car insurance policy, which could cover things like repairs in the future. 

If you’re looking for a good deal on comprehensive car insurance, then look no further than Mozo’s car insurance comparison tool.