BUYING A USED CAR (page 1)

Hidden Extras

When we agree on a price for a car, that's all we have to pay, right? Well, no. There are other costs. Have you seen these words before?
stamp duty
transfer
registration
insurance
safety certificate / roadworthiness certificate

When you buy a car, you must give the following documents to the government; the safety certificate, the transfer papers, the registration papers, proof of purchase (a receipt) and proof or your name and address. In most states this must be done within 14 days of buying the car. The things you need can be a little different in different states. The names for the documents may be a little different.

STAMP DUTY
When you buy a car, you have to pay stamp duty to the government. It is a percentage of the price you pay for the car. The percentage is different in different parts of Australia and can be between 2.5 and 6 percent. It is different for new and used cars and different if it is bought from a dealer or privately.

As an example it might be 4 percent.
So if you pay $2000 for you car, you might have to pay $80.00 stamp duty.
If you pay $20,000, you might have to pay $800 stamp duty.

TRANSFER
When you buy a car, you have to transfer the registration from the previous owner's name to your name. There is a fee for this. It is different in different parts of Australia. It can be as low as $20.00.

REGISTRATION
A car has to be registered every 12 months. This can cost $160 between $450 depending how old the car is and which State you are in. If you buy a car and it already has several months of registration on it, you don't need to pay again until the current registration ends. So when you are buying a car, it is a good idea to look at when the registration ends.

INSURANCE
All cars must have compulsory third party insurance. This means that if you injure another person while you are driving, your third party insurance will pay the other person's medical costs. This insurance generally costs between $200 and $450.

SAFETY CERTIFICATE / ROADWORTHINESS CERTIFICATE
Every time a car is bought or sold, it must be checked by a certified mechanic to make sure that it is safe to drive on the roads and meets the minimum safety standards. The mechanic checks tyres, breaks, seatbelts and so on. If the car is in good condition, the cost may be $100 or more. If there is something wrong with the car, the car must be fixed before the certificate can be given. Usually the person selling the car gets the safety certificate. In most States It is only good for 30 days. If the seller shows you the certificate, you know that you don't need to pay to make the car safe/roadworthy.

You can see from the list above, that as well as paying for the car, there are also other costs before you can start driving your new car!

QUIZ

Read the questions and select true or false.

true   false 1. You must pay stamp duty to the government when you buy a car.   
true   false 2. Stamp duty is 8 percent of the price you pay for the car.   
true   false 3. Transfer costs are usually less than $100.   
true   false 4. Not all cars must be registered.   
true   false 5. You must pay insurance.   
true   false 6. The person selling the car usually supplies the safety certificate.   
true   false 7. The safety certificate shows that the car meets maximum safety standards.   
true   false 8. A safety certificate is usually only good for 30 days.   

Score =
Correct answers:


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