A test drive will let you get a feel for the car and find any obvious problems. You should examine the car and take note of any defects from stone chips to stalling.

Have your car buyer's checklist ready to take notes. Check the speedo for mileage travelled and the manufacture date on the compliance plate. This may come in handy if you negotiate over price later.

Before taking the car for a drive, check to see if the car is covered by comprehensive insurance. If you have an accident that's your fault and the car is comprehensively insured you will have to pay an excess. If the car is not comprehensively insured and you have an accident that is your fault, you will have to pay all the repair bills.

Insurance and test drives

Most licensed car dealers/traders will have a comprehensive insurance policy that covers all their cars during test drives. However, the law doesn't force car dealers/traders to take out car insurance so you need to check with them before taking a test drive.

If you have an accident that is your fault while on a test drive then the dealer's/trader's insurance company will insist that you pay the excess. An excess is the amount of money that you must pay when making a claim on an insurance policy.

The excess payable on a comprehensive policy is dependant on the age and experience of the driver and the age of the car. In some cases, it can be as high as $1750 for a driver under 19 years of age.

Some cars will attract a higher excess. You should ask the dealer/trader the following questions before taking a test drive:

  • Is the car covered by a comprehensive insurance policy?
  • Am I covered by this insurance policy if I have an accident?
  • How much is the excess if I have an accident?

Expensive drive! - a case study

Tim went looking to buy a used car. After wandering through car yards for a few hours, he finally saw a sedan that he liked. He spoke to the salesperson, looked over the car, and took it for a test drive.

To avoid traffic, he decided to drive the car around the back streets. With the radio blaring he was bopping to the groove and didn't notice that the car in front of him had stopped and he ran into the back of the other car.

Luckily he was okay. Also, as the dealer held an insurance policy, all the damage caused by the accident would be covered, but as the accident was Tim's fault, he would have to pay the excess. Ouch!