23 Aug 17
Sydney Australia, Wednesday, 23 August 2017: More than half (59%) of Australians aged between 18-49 spend more time researching an overseas holiday than researching their next second-hand car, reveals new research from CarHistory.com.au, Australia’s first online automotive bureau and part of Equifax.
Last year, an estimated 1.2 million Australians planned to purchase a second-hand car for an average value of almost $11,0001 – more than twice the average cost of an overseas holiday ($4,750)2 – based on a decision that is usually made in less than a week.
Izzy Silva, Equifax General Manager, Consumer, said: “For many people, researching a holiday is more appealing than assessing the potential risk of a used car. So, naturally, the time spent researching dreamy destinations tends to be greater than the time put towards researching a car’s history.
“Many second-hand car buyers don’t even consider the fact their prospective car may be damaged, as many issues cannot be seen at a glance,” he continued.
Without careful due diligence, Australians may end up buying a lemon and having to pay up to $2,000 in repairs.
“If the 9.2 million Aussies who spent, on average, seven months2 (approximately 5,110 hours) researching an overseas holiday, put even a handful of those hours towards researching their used car, it could prevent the arduous and costly sequence of repairs that comes with buying a lemon.
“In 2016, the number of cars checked by CarHistory that received a negative report was 27.2%. Of these, 13.1% had an encumbrance, or money owing on the vehicle – making this the most common negative report finding,” said Mr Silva.
The CarHistory research showed that one third (32%) of Australians bought their second hand car after only 1-2 hours of research. This includes 16% who went to a private seller, took it for a drive, then bought it outright, and also 8% who saw it in a dealer yard and bought it immediately3.
The entire process of a used car purchase – test driving, mechanical checks, insurance, registration – should stem from the initial research phase. There are a number of things many consumers won’t think to look for without the help of a thorough background check, including: odometer wind-backs, flood or storm damage, re-birthing, and signs the car has been written-off, money owing on it (encumbrance), or having been previously stolen.
Mr Silva said consumers need to be more vigilant when deciding which used car to purchase, and discerning in whom they buy it from.
“CarHistory’s research revealed that prospective buyers are more likely to purchase a used car based on the car’s physical appearance, which is to be expected, but also largely on their perception of the previous owner. The false sense of security conveyed by a seemingly trustworthy seller may result in more people buying used cars on a whim,” Mr Silva said.
In 2016, 61% of prospective buyers said they would most likely trust specific types of people when buying a used car. Specifically, 23% of people would trust a car enthusiast, compared with only 2% who would trust a librarian3.
Comprehensive vehicle history checks should be front of mind before inspecting a used car for purchase. However, the lack of awareness amongst car buyers is putting people at risk from sellers who, intentionally or not, don’t disclose the truth about the car’s history.
Mr Silva said consumers tend to buy on their ‘gut instinct’, which is fine for small investments like a piece of clothing. But a lack of understanding around the importance of adequate due diligence, including an in-depth vehicle history check, not only leaves people out of pocket, but may put their physical and financial safety at risk.
“We know from our research that one in two private second-hand car sellers have sold a car they knew had a potential serious issue, at some stage,” Mr Silva said.
“Half (54%) of prospective buyers rely on the opinion of a friend or family member to help purchase a used car – but a non-professional’s opinion is not enough.
“A car can provide you with independence and freedom, or a relentless headache. You don’t want to be making such an important decision based on the friendly face of a seller with an agenda. Take the extra step and get it right the first time,” Mr Silva added.
Consumers can get a CarHistory report for $36.95 in just seconds at http://www.carhistory.com.au.
For more information, please contact:
0423 833 267
0405 652 703
1 CarHistory Used Car Survey 2016. The Leading Edge. March 2016. n = 807 Australian used car buyers aged 18-75 years.
2 Aussies are overspending on holidays by $900 million. CommBank. December 2016. https://www.commbank.com.au/guidance/newsroom/Aussies-overspend-by-900M-on-holidays-201612.html
3 CarHistory Consumer Research 2017: Galaxy. July 2017. n = 1,001 Australian ages 18-49 years.