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Backyard car dealers conning buyers

If a car is advertised for a much lower price than similar vehicles, be cautious, because it is probably for a good reason.

Dodgy operators are buying cheap used cars from auction houses, doing just basic repairs and then selling them on. An investigation by late last year found that more than one in 10 (13.5 per cent) of their reports showed vehicles were either a repairable write off, had their odometer rolled back or were stolen.

The report named Victoria as the riskiest state in Australia to buy a used car, with Queensland just behind in second place.Queensland Motor Valuations senior valuer Troy Dwyer said his business alone dealt with two cases a week of consumers being duped and the problem was growing.

"There are a lot of backyard dealers at the moment," he said. "They're people who buy cars at auctions - like repairable write offs - and they'll fix them up a bit in a backyard shed. Quite often they won't put things like airbags in them because they want to do it as cheap as they possibly can."

Mr Dwyer said unlicensed dealers were getting around the rules by buying cars in the names of their family and friends. 'You can put about four or five cars in your name per year without drawing too much attention to yourself," he said. "So these guys will put some in their name and some in their kids' names. They'll have lots of cars sitting in their driveway and around their yard. That is a major alarm bell."

Office of Fair Trading Queensland principal compliance officer Chris McKenzie agreed many buyers of used cars were being ripped off by unlicensed dealers. "If you're completely unaware of a car's accident history, you may not know what to look for," Mr McKenzie said. In 2012-13, his office had 122 complaints of alleged unlicensed motor dealing but he said the real number would be higher.

Tips for buying a used car

There are a few steps buyers can take to reduce risks when buying a second-hand vehicle. The first and most obvious advice is know your budget and do your research. warns that if a car is advertised for a much lower price than similar vehicles, be cautious, because it is probably for a good reason.

Once you've found the right car and you've contacted the seller, there are a few more points to consider. If it's from a dealer you will probably pay a little more but the final price will include all on-road costs and you will have a little more peace of mind.

If you buy from a private seller, you will usually have to pay the 3 per cent stamp duty and registration transfer fee yourself. The onus of changing the registration into your name is on you, and it must be completed no more than 14 days after the purchase date.

Be wary when dealing with backyard dealers. When it comes time to look at the car, also check it hasn't been listed on the Personal Properties Security Register. Take the car for an extended test drive. Then if you think you’ve found the right car for you, get an independent mechanic to give it an inspection.

When it comes to payment, a dealer is always going to offer greater security. If you are buying from a private seller, pay via a bank cheque and always make sure to get a receipt with details including the names, date, time of purchase, make and model of the car, VIN number, current kilometres and the amount paid for the vehicle.

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