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Buying second hand or used cars for Novated Leases

16/01/2012 by Rory Deegan in Novated Leasing

Did you know that it is possible to salary sacrifice a second hand or used car with a novated lease? However, as with any new car or outright second hand purchase, it is important to do your research before salary packaging any vehicle. We have put together a second hand vehicle buying checklist along with a few other tips so you have peace of mind when leasing a second hand vehicle.

The second hand checklist

Do your research – Knowing what to expect from a vehicle is very important. Always remember to research the vehicle before viewing it. Look up common problems and always read and understand the vehicle specifications given. It can also be helpful to ask the seller what the price quoted includes as a lot of the time it will not include transfer or licence fees.

Mechanical checks –  A full check under the hood and all around the car is always needed. If you are not confident in your own ability you might want to show the car to a local and unbiased mechanic.

Service history – A full mechanical service history is very useful as it notes when specific parts, like timing belts, were replaced. Service histories also act as periodic audits which, if well documented, can tell you what to expect in the future.

Car history – Running a check of the vehicles details through your states registry is an important way of checking out what has happened in the vehicles past. Has it been written off before or was it involved in an accident?

Paperwork – Transferring the vehicles ownership is a critical part of the purchasing process and buyers should be aware that unscrupulous buyers or sellers can capitalise on mistakes made in this area. Research this by simply looking up the procedure with your states/territories department of vehicles.

Warranties – The most important thing to remember with warranties is that you need to know exactly what you are being offered. Whilst licensed vehicle dealers can have very specific obligations in relation to warranties it is worth noting that some vehicles may still be under their original manufacturer warranty. Some dealers may offer to sell you an extended parts and labour warranty. Always remember to look for the full specifics on any warranties as the conditions can vary from the accommodating to the downright inconvenient.

Special considerations for Novated Lease holders

Aside from ensuring that the vehicle is no older than 7 years old (as a general rule) at the completion of the lease, there are not a lot of rules relating to buying a second hand car for a novated lease. Customers can buy the second hand vehicles from private or dealer sellers and in some cases you can novate a vehicle you have already purchased.

Final thoughts

Buying anything second hand does require more attention to detail. Second hand sellers can vary and for the most part they do not and will not offer you the security available from a new car dealer. As a consumer you should be honest with yourself as to what you are missing out on by selecting a second hand dealer or a private sale as opposed to a new car purchase. In the end diligence is your top priority so try to avoid impulse buying or knee jerk purchases. See which Fleetcare Novated Leasing option is right for you.

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