Consumers Admit to Purchasing a Used Car Lemon

April 2009

New figures by leading cheap car insurance provider Budget Direct show an alarmingly high number of faulty used vehicles are being sold across Australia, with approximately 25% of Brisbane, Melbourne and Sydney owners encountering major mechanical issues after purchase and close to 50% overall encountering some mechanical fault.

Further to this, 31% of Brisbane motorists admitted to having traded in a vehicle to a car dealer knowing it had existing mechanical problems, compared to 20% in Melbourne and 19% in Sydney, heightening concerns for used car consumers.

Budget Direct spokeswoman Richelle Ward said she was shocked at the number of people who have purchased a vehicle that had pre-existing mechanical problems and urges consumers to take the necessary steps to ensure a successful purchase.

"Faults in used cars are common and motorists could be setting themselves up for real financial difficulty if they do not have independent inspections undertaken prior to purchase," Ms Ward said.

Budget Direct’s survey also showed that on average 11% of respondents across Brisbane, Sydney and Melbourne advised they had sold a car privately, knowing it had either minor or major mechanical problems.

In response to these statistics Ms Ward said it was important for used car buyers to be responsible and take precautions to ensure they purchased a car that is in good working order.

"If you are looking at a used vehicle being privately sold, the first thing to do is ask to see a current Safety Certificate, which shows that the vehicle has passed a basic safety inspection."

"Keep in mind that a Safety Certificate doesn’t take into account the condition of a car’s engine or mechanical performance, so it’s best to have a thorough and independent vehicle inspection conducted as well," she said.

The message is clear - If you are purchasing a used vehicle, no matter if it is from a dealer, private sale, or mate, go through all the necessary steps to help prevent financial risk.

About Budget Direct

Budget Direct is a cheap car insurance provider that offers competitive car insurance to drivers in Australia. Budget Direct is a wholly owned Australian insurance provider and is part of the international Budget Insurance group of companies headquartered in the British Isles. The Budget Insurance group of companies administers more than 3 million policies and $1 billion in premium. Auto & General Insurance Company Ltd underwrites Budget Direct’s policies.

Car Insurance - Cut the cost not the cover

For further information or interviews please contact Jonathan Kerr, Director, Marketing & Digital, Budget Direct (Auto & General) at 07 3377 8801 or

Budget Direct was established as an insurance provider in Australia in 2000.  It is part of the international BHL Group of companies headquartered in the British Isles. The group provides more than 6.8 million policies to insurance customers and administers $2 billion in premiums annually. Budget Direct offers Motor, Home & Contents, Health, Life and Travel Insurance as well as Roadside Assistance.