The Decoding Dealerships Report

Carma reveals what to look for when buying a pre-owned car.

In 2026, the stakes for Australian car buyers have never been higher. With petrol prices soaring and cost of living pressures at their highest level in a decade, Australians simply cannot afford a bad buy. A car that is costly to run or hiding expensive mechanical defects is no longer just an inconvenience; it’s a critical financial risk that many cannot absorb.

Buying a car should feel exciting, but for many, it’s filled with uncertainty. From unclear pricing and last-minute add-ons to pressure tactics and hidden defects, the traditional used car-buying experience is often inconsistent. Most buyers don’t know what to watch out for until after they’ve driven away, when problems, costs or regrets start to surface.

Drawing on decades of industry experience, Carma — Australia’s fully digital pre-owned car platform and the preferred used car dealership of the NRMA — has identified the most common red flags Australians face when buying a used car. By identifying these warning signs and highlighting the green flags to insist on, this toolkit provides a comprehensive guide for risk-free used car buying.

“Buying a car is the second-biggest purchase many will make in their lives, which is why it’s important to see past the surface of a car and understand its true history,” said Peter Willis, Director of Buying. “We want to educate Aussies on how to identify and avoid the old-school tactics that lead to regret, ensuring they have the tools to buy with confidence.”

“Not all used cars are created equal, but the problem is they can look like they are,” said Hugo Acosta, Director of Vehicle Operations. “We’ve seen firsthand how easily issues can be missed without a proper inspection, especially when cosmetic fixes are used to mask bigger problems underneath. Buyers should expect full transparency, because once you drive away, those hidden issues become your problem.”

Red flags: Warning signs to watch for

Pricing and tactics:

• Deposit before price: Being asked to put down a deposit before a final drive-away price has been clearly agreed upon.
• Hazy finance quotes: If you can’t get a clear, written finance quote, or hear vague terms like “around” or “roughly”, you’re likely not being given a finalised offer. Advertised rates may also only apply to specific vehicles or buyer criteria, not the car you’re actually purchasing.
• Non-transparent pricing: A lack of clear pricing that includes all fees, or being quoted an RRP that excludes mandatory charges or potential penalties.
• Pressure to negotiate: When dealers expect price haggling to reach a fair price. If the price isn't transparent and changes based on how confident a negotiator you are, it might be a sign to consider other options.
• Scarcity pressure: Suggestions that another buyer is circling the car just to accelerate your decision.

Vehicle condition and history:

• Inspection refusal: If a dealer refuses to allow an independent pre-purchase mechanical inspection.
• Missing documentation: Reluctance to provide a full service history with receipts, or a lack of transparency regarding Personal Property Securities Register checks (finance owing or write-off records).
• Odometer tampering: Any suspicion that the reading doesn't match the car’s computer system or service history.
• Undeclared defects: Post-purchase issues that weren’t visible or disclosed upfront.
• 10-minute test drive: Judging a car on a quick lap around the block, when technical issues often only surface after a more comprehensive drive.

Customer experience:

• High-pressure sales: Overtly pushy or manipulative sales tactics.
• Lack of communication: Evasiveness or a refusal to answer direct questions or be forthcoming with essential information.
• Parts purgatory: Buying a car from a new or niche brand with limited local parts availability, which can make servicing more difficult or expensive over time.

Pete’s top tip on spotting red flags

If you feel rushed or unsure at any point, step away and reassess. You should feel confident in your purchase, and a trustworthy dealership won’t pressure you to commit on the spot.

“Traditional car buying environments can make it difficult for buyers to slow down and make an informed decision, especially when there’s pressure to commit quickly. Without enough time to properly assess whether a car suits your lifestyle or arrange an independent inspection, it’s easy to get caught out. The biggest red flag? If you don’t fully understand the price, the condition or the urgency, you’re not in control of the purchase.” - Peter Willis, Director of Buying

Green flags: What to insist on and look for

Transparency and negotiation:

• Upfront pricing: Securing an agreed-upon, all-inclusive price before putting down a deposit.
• Independent valuation: Seeking an independent valuation (using online tools) for a trade-in to ensure the dealer isn't lowballing you.

Verification and inspection:

• Independent checks: Buyers should always conduct their own Personal Property Securities Register (PPSR) check for complete peace of mind.
• Pre-purchase inspection: Request an independent mechanical inspection before purchase.
• Extended driving experience: Time to properly experience the vehicle in real-world conditions.

Warranty and consumer guarantees:

• Post-purchase protection: Clear warranties or a returns policy that gives you genuine confidence beyond the point of purchase.

Trust and accountability:

• Reputation check: Check reviews and word-of-mouth sentiment before visiting the yard.
• After-sales service: Research dealers with strong after-sales service ratings, or the ability to return the car if you’re unhappy within the first seven days.

Hugo’s top tip on spotting green flags

A full, consistent service history is one of the biggest green flags to look out for when buying a used car.

"It tells you how the car was treated, but more than that, it tells you what type of person owned it. Someone who serviced on time, every time, invested real money and effort into that car. That kind of care doesn't stop at the logbook." - Hugo Acosta, Director of Vehicle Operations

Pete and Hugo's top 3 recommendations:

1. Take your time

Avoid rushing into a decision or feeling pressured to commit quickly. Give yourself the space to properly consider your options, compare vehicles, and assess whether the car is right for you before moving forward.

2. Understand the total price

Ensure the final price is clear from the outset, including any additional fees or charges. If pricing isn’t transparent upfront, it may not reflect the true cost of the vehicle.

3. Trust what you can verify

Rely on independently verified information wherever possible. Review the vehicle’s service history, inspection reports, and overall condition to make a well-informed decision.