The perils of buying a used car privately

With car sales in Ireland struggling to get over the 17,000 mark (an 18 per cent drop on the previous, also dismal, January), the market for pre-owned cars is relatively roaring ahead. Nearly 41,000 used cars changed hands in January, but the most striking statistic is that, of that number, 73 per cent were purchased from private vendors.

Now, that seems more than a little odd. The major carmakers and dealer networks have worked studiously over the past few years to introduce approved used car programmes that are supposed to remove the risk from buying a used car.

Warranties of up to two years are offered on franchised used purchases, as are guarantees that the car will pass its next NCT examination. Multi-point checks and roadside recovery options are often included, virtually bringing the security of a secondhand purchase up to the level of a new car.

So why, then, are Irish car buyers ignoring the safety of a dealership and opting for the risks of buying privately? Shane Teskey, head of car history service Motorcheck.ie, whose research uncovered the statistic, is putting it down to the tightening of purse-strings. "As people, in any downturn, look for a bargain, they feel that buying from the driveway as opposed to the forecourt is the way to go to get that bargain."

But just as the dealers have gone to extensive lengths to dispel the old image of the dodgy used car seller, some private sellers are not living up to expected standards of honesty.

Used car shortage

“The new car market fell considerably back in 2008 and 2009, which means that there has been a serious shortage of used cars coming onto the market last year and this year. So, as a whole, the used car market has strengthened substantially” says Teskey. “Unfortunately, there aren’t as many bargains to be had as there would have been back in the Celtic Tiger years, and that means that we’re importing more used cars from the UK, which means that history has become in some cases more questionable, and unfortunately we’re starting to see a rise in scams. The old ‘ghost car’ that’s sitting on a dock in Liverpool that can be yours for €2,000 even though it’s worth €10,000 – that one is starting to creep back in, and we’ve come across a number of people who’ve fallen foul of it, paid a deposit that’s never to be returned.

Teskey continues: “It’s always been the case that people would bring along a knowledgeable friend or a local mechanic to do the once-over on a used car, to ensure that it wasn’t previously crashed or about to give up. But they don’t recognise that there are a lot of other considerations that may not be evident from standing and looking at the car. The finance outstanding, for instance. There are plenty who’ll be more than happy to take your €5,000 or €6,000 on the doorstep, hand you the log-book and fill out the forms as they should. But when the original owner stops making the repayments four or six weeks later, there’s going to be someone from the lending house knocking on your door, looking to repossess the car, and there’s nothing you can do about it.

“It’s quite common, it’s not something that the banks like to publicise or that the recovery agents talk about much. I guess that they’ll come out and try and enter into negotiations. If you’re happy, for instance, to pay the balance of the outstanding finance, they’ll leave it with you – the last thing they actually want to do is repossess it, really. But if the previous owner has disappeared, there’s very little you can do, so it’s one of the main worries and causes for concern.”

Finance outstanding

Clearly, there are honest and reliable people selling their cars privately out there, and the dishonest ones are still, thankfully, in a minority. But at a time when 16 per cent of cars surveyed by Motorcheck had finance outstanding, and 20 per cent were found to have been clocked to reduce their displayed mileage, there are plenty of tripwires to avoid.

The National Consumer Agency is similarly concerned about consumers’ rights when buying from a private vendor.

“If you buy from a dealer, you have some protection under consumer law. However, if you buy privately, you do not have the same consumer rights because the person selling the car is not acting as a business,” says John Shine, NCA’s director of commercial practices. “If a problem arises with a privately sold car there may be little you can do beyond taking a civil case through the courts. Because of this you should be very careful when buying from a private seller and you really need to be aware of what you’re buying. Remember, a private seller may not have all the answers, so it is important to have the car checked by a mechanic.”

Also, says Shine, “consumers cannot take another consumer through the Small Claims process. However, you could still consider legal action by consulting with a solicitor and taking a civil case through the courts.

Few comebacks

Yes, you may well be able to find a bargain out there on someone’s driveway, and yes, the same car, in the same condition, bought from a dealer will doubtless cost you more. But doubt is the key issue here. If you have any doubts as to a car’s provenance, ownership, financial status or mechanical well-being, then use that doubt to propel you away. If you’re buying private, comebacks are few and far between.

“Do your research,” say Teskey. “And always ask to see any documentation that’s going with the car, be it a private or retail sale. And try and track the previous owners down, if you can, and ask them for their opinion on the car. Look for service history stamps or any evidence of a garage that’s looked after the car. Pick up the phone and make the call; don’t be sucked in by something that you feel is a bargain and you have to buy today. Leave a small deposit, and come back 24 hours later when you’ve done all your research and I’d say you’re going to avoid 90 per cent of the risks.”

Most popular used cars January 2013

Private car sales in January, and the number sold.

1 Ford Focus 2000 (183)

2 Fiat Punto 2000 (180)

3 Volkswagen Golf 2000 (144)

4 Volkswagen Passat 2001 (144)

5 Volkswagen Golf 1999 (143)

6 Opel Astra 2000 (142)

7 Opel Astra 1999 (130)

8 Toyota Corolla 2000 (126)

9 Toyota Corolla 1999 (126)

10 Volkswagen Passat 2002 (126)

Figures from Motorcheck.ie