What Are Licensed Car Dealers?

What Are Licensed Car Dealers?

What Are Licensed Car Dealers?

If you are buying a car in Australia, then you can help to protect your investment by using licensed car dealers. Licensed dealers are bound by a number of rules and regulations. When you make a purchase, you will be guaranteed title / ownership and will be protected by the Motor Dealers Compensation Fund. You can also buy cars from private and unlicensed dealers. However, this can expose you to unnecessary risks.

Benefits of Using Licensed Dealers

In most States and Territories in Australia, licensed car dealers are required, by law, to provide buyers with statutory warranties on all used cars that they sell. These can vary in terms of coverage and duration. As a result, it is a terrific idea to check the small print extremely carefully. The penalties for reneging on these warranties are harsh for the dealer and can include fines, de-registration and even prison. Dealers can be licensed to sell a number of vehicles, including cars, vans, motorbikes and caravans. They can also offer financing and insurance options.

Licensed dealers are required to check that the vehicles they are selling are of a satisfactory quality and free from defects (except in those cases where defects are pointed out by the dealer). A roadworthy certificate will be provided with each sale which will be valid for 30 days. If you find any problems with the car during this time you can return it. The dealer will be required, by law, to carry out repairs. Their other option is to take the car back and give you a refund. The vehicle must also be as described' so if the dealer says the car has only had one careful owner' this should be accurately listed on the registration certificate.

When you buy a car from a licensed dealer, you can be sure that no money or parking fines are outstanding on the car. If the car turns out to have been stolen and is recovered by the police, then the dealer must provide you with a refund. If the dealer is no longer trading, then you can apply for a refund from the Motor Dealer Compensation Fund.

There are still some dodgy car dealers around, who operate with and without licenses. Because of this, it is essential to check the background and reputation of the dealer before you make a purchase. You can also check with the Motor Trades Association to ensure they are licensed dealers.

Unlicensed Dealers

Given that licensed dealers have to comply to some stringent regulations, they do need to charge slightly higher prices in order to cover their costs. Unlicensed dealers, who do not bother to comply, can offer cars much more cheaply than licensed dealers. The lower pricing may tempt people into using these services. However, if you buy from an unlicensed dealer, you will not have any support in place should the car turn out to be stolen or faulty. To protect your investment, using a properly licensed dealer is a much more financially sound option, even though you pay a little more for the car.

Unlicensed dealers may not carry out any safety checks before they sell cars. This could mean that you buy a car with a serious hidden fault which could not only be expensive to rectify but also potentially dangerous. In addition, if the car turns out to be stolen, once paid for you will not be protected by the Motor Dealer Compensation Fund and will not be able to get your money back if the police seize it.

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