Buying a used asset: checks to make before finance
Check the identity and condition of the asset
Record the identifying details, age, condition and seller. Arrange an appropriate independent inspection rather than relying only on photographs or the seller’s description. Ask about service history, repairs and any immediately required work.
Confirm ownership and existing interests
Ask the relevant provider what ownership and existing-security checks are needed for this asset and purchase. Vehicles, marine packages and machinery may involve different identifying details. Resolve unclear ownership before committing money.
Keep the asset decision separate from the loan
An offer of finance does not establish that the asset is good value or suitable for its intended use. Compare the purchase with realistic alternatives and keep a repair allowance in the budget.
Have the details ready
Keep the listing, seller information, inspection findings and itemised price available. Ask the finance provider about age, valuation, seller and settlement requirements before agreeing a purchase timetable.
Further reading: ASIC Moneysmart: car loans.