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What Buyers Need to Know Before Purchasing car

Purchasing a car, whether new or old, is never a simple task. It involves not only financial commitments but also comprehensive considerations about various factors. This guide aims to simplify the process for those considering purchasing a second-hand car, with a focus on the impact of Goods and Service tax (GST) on such transactions. 

This used car buying guide is therefore a comprehensive go-to reference before embarking on your car buying journey.

Understanding the Basics of Used Car Buying

Buying a used car involves greater risks compared to getting a new vehicle. It’s not just about the model and the colour. The mechanical condition of the vehicle, potential hidden defects, the car history, and financial matters such as GST on second-hand cars should be deeply contemplated. Therefore, an informed decision is a safer decision in this scenario.

Decide what You Want

Before stepping foot in any dealership or browsing car listings on the internet, it’s crucial to have a clear picture of what kind of vehicle you’re seeking. Besides considering the brand and model, focus on the type of vehicle that suits your lifestyle, budget and needs. Your choices range from SUVs, sedans, trucks, sports cars, hatchbacks, to family-oriented minivans.

Budget Appropriately

Having a budget is paramount. It’s prudent to factor in all the expenses involved, including those beyond the car’s initial purchase price. Incorporate recurring costs such as fuel, insurance, maintenance, and don’t forget the GST on second hand cars.

Research Thoroughly

In this digital age, there’s an abundance of information available online. Use it to research the chosen model’s pros and cons, common defects, customer reviews, and market value. This helps decide whether a given offer is reasonable or a rip-off.

Inspect the Vehicle Carefully

The importance of car inspection cannot be overstressed in the used car buying guide. Check the overall condition, including the car’s exterior, interior, tyres, and under the hood. This can help spot possible issues with the bodywork, engine, and accessories. A test drive is also recommended to assess the car’s performance on the road.

Understand the Car’s History

Many businesses offer detailed car history reports using the car’s vehicle identification number (VIN). This data can expose potential deal-breakers, such as evidence of severe accidents, flood damage, or if the car has been used as a taxi or rental vehicle.

Navigating Through the Financial Aspect: Insight on GST on Second-hand Cars

Buying a car attracts several taxes, including GST. Often, used car buyers overlook this aspect and face unexpected costs. In most cases, GST on second-hand cars applies, but certain conditions could exempt it. For example, if the seller is not registered for GST or if the sale is considered a private sale, GST may not apply.

Also, if the seller used the car solely for personal use, the sale could be GST-free. To avoid surprises, always seek advice from a tax consultant about GST on second-hand cars before purchase.

Negotiation and Closing the Deal

Once you have all the information in hand, it’s time to negotiate. Armed with the car’s history, inspection results, and market value data, you will be well-positioned to haggle the price. Use any identified faults or imminent expenses (like a due tyre change) as leverage to knock the price down.


Purchasing a used car is a significant financial decision and understanding what’s involved can make it less daunting. The first steps should always be thorough research and careful budgeting, while keeping in account the potential GST on second-hand cars. Following the guidelines in this used car buying guide can minimize risks and ensure you get a reliable vehicle at a reasonable price. Remember, an informed decision can make the difference between landing a gem and being stuck with a lemon. So go ahead, use this guide, and embark on your exciting car-buying journey with confidence.


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