Selling a car with a warning light on: fix it or disclose it?

Get the warning code read first, then either fix the fault or tell every buyer about it in writing before they make an offer. Fix it first if the repair is free under warranty or a recall, or if the cause is simple and confirmed. A red or flashing light means stop driving and get it diagnosed before you decide anything else. Otherwise, a clear written disclosure usually serves you better than a rushed repair.

The one thing not to do is clear the code and say nothing. The fault usually comes back, and an inspector’s scan tool can often show that the codes were cleared recently.

What does the colour of the light tell you?

Most carmakers follow a traffic-light pattern, though your owner’s manual is the final word for your car:

• Red means a safety warning or a serious fault. Some, such as the seatbelt reminder or the park brake light, only need you to act. If one stays on for no clear reason, stop when it’s safe and find out what it means before driving on.
• Amber or yellow means check soon: a system has logged a fault, or something needs attention, such as low fuel or low tyre pressure. The car may still drive normally.
• Green, blue or white means a system is switched on, such as the headlights or cruise control. These aren’t faults.

A light that comes on briefly when you start the car and then goes out is normal. The NSW Government’s vehicle inspections checklist tells buyers to check that the ABS and airbag (SRS) warning lights come on for a short time when the ignition is turned on. Lights such as the engine and alternator lights should go out once the engine starts. A light that stays on is the one buyers notice.

Here’s how the common lights play out when you sell.

Hybrids and EVs add their own lights for the hybrid system or the high-voltage battery. A basic code reader usually can’t read those, so have the brand’s dealer or a hybrid or EV specialist diagnose them before you advertise.

How can you find out what the light means without spending much?

You don’t need a full diagnosis to decide. You need the fault code and a rough idea of what it points to. In order of cost:

1. Read the screen and the manual. Many newer cars show a text message with the light, and some brand apps send the same alert to your phone. The owner’s manual explains each symbol.
2. Use a code reader. Petrol, diesel and hybrid cars have a standard diagnostic (OBD) port, usually under the dashboard on the driver’s side. A basic plug-in reader, or a Bluetooth adapter with a phone app, reads engine and emissions codes. Many basic readers can’t see airbag, ABS or hybrid system codes.
3. Ask a mechanic or mobile mechanic to scan it. A workshop scan tool reads more of the car’s systems. Ask what a scan costs before they start, and ask for a printout or a photo of the screen.
4. Go to the brand’s dealer if the car is under warranty or a recall may apply. If the fault is covered, the repair shouldn’t cost you anything, and the dealer has the brand’s own diagnostic equipment. Ask first whether you’ll pay for the diagnosis if the fault isn’t covered.

Write down what you find: the code, its description, the date and the odometer reading. Take a photo of the dash with the light on.

One caution: a code is a starting point, not a diagnosis. It names the system or sensor that reported a fault, not always the part that has failed. Before you pay for an expensive part on the strength of a code alone, have a mechanic confirm the cause.

Could the light, or a missing light, be part of a recall?

Yes, and it works both ways. A recall can be the cause of a fault you’re seeing. And some recalls involve the instrument cluster itself, so a dash that looks clear isn’t always proof that nothing is wrong. Check for recalls before you pay for any diagnosis, and check even if no light is on.

Three recalls on the Australian Government’s recall site show how this happens:

• Toyota LandCruiser Prado 250 Series (REC-006616). It covers 13,042 Prados (GDJ250R) built in 2024 and 2025. A software error means the instrument cluster may not show warning lights such as oil pressure or coolant temperature. On an affected car, a serious fault could be present with no light on.
• Kia Sportage, Niro and Seltos (REC-005699). It covers some NQ5 Sportages built in 2022 and 2023, along with some Niro and Seltos models. The cluster software may fail to show the seatbelt warning.
• Toyota RAV4, Kluger, Corolla and Camry Hybrid (REC-006390). It covers 69,586 Toyotas built from 2022 to 2025, including some of each of these models. A memory device in the instrument cluster can deteriorate so the display stays blank. The fix is a software update.

Search your car’s VIN at vehiclerecalls.gov.au or ask a dealer for your brand to check it. Recall work is free at the dealer. If your car is covered and the work hasn’t been done, book it before you sell and keep the record, because many buyers and dealers run the same check. Our guide to checking open recalls before you sell walks through it step by step.

Should you fix it, disclose it or sell it as is?

Once you know what the light means, the decision usually comes down to cost, certainty and time. A red or flashing light needs a diagnosis before you can choose, because the car shouldn’t be driven until then. After that, use this as a guide.

Fix it first if:

• The repair is free, because the fault is covered by the manufacturer’s warranty or a recall.
• The cause is simple and confirmed, such as a tyre that needed air or a service that’s due.
• A buyer tells you the repair would lift their offer by more than it would cost you.

Disclose it and sell as is if:

• The diagnosis points to a large or uncertain repair.
• Pinning down the cause would mean paying a workshop to keep investigating.
• You’d be paying for a repair without knowing whether the price improves.
• You’re short on time and would rather the buyer deal with it.

A 2021 or newer car may still be inside the manufacturer’s warranty, so check that before you pay for anything yourself. Our guide to remaining warranty and car value explains why buyers care about it.

Writing “sold as is” on a receipt isn’t the same as telling the buyer what you know. Western Australia’s Consumer Protection says private sellers aren’t legally required to do a roadworthiness check, but warns that a seller may be held liable if they’re aware of a serious defect and don’t make it known to the buyer.

Why does clearing the code before an inspection backfire?

Clearing a code turns the light off. It doesn’t fix the fault, and it rarely stays hidden.

• The light comes back. The car keeps running its self-tests. If the fault is still there, the light usually returns once those tests run again, which for some faults is within a drive or two. Sometimes that’s after the buyer has the car.
• The scan tool shows it. Clearing codes, with a reader or, on many cars, by disconnecting the battery, resets the car’s readiness monitors to “not ready”. An inspector who plugs in a scan tool sees monitors that haven’t finished, and many tools also show the distance driven since the codes were cleared.
• Trust goes, and the price follows. An inspector who finds freshly cleared codes has to wonder what else wasn’t mentioned. That can mean a lower revised offer, or a buyer who walks away.
• It can look like concealment. Hiding a known serious defect is exactly what WA Consumer Protection warns can leave a private seller liable.

What should you tell a buyer, and when?

Tell them before they make an offer, in writing, and keep a copy. A message sent before the price is agreed puts the fault into the first number, and it gives you a record if the buyer raises it later. Include:

• Which light is on, and its colour.
• When it first came on, and whether it’s constant or comes and goes.
• The code and its description, with the date it was read.
• What a mechanic said, if you’ve had it looked at, and any quote you received.
• Whether the car drives differently: less power, new noises, smells or a rising temperature gauge.
• What you’ve already done, such as repairs or recall work.
• Whether any recall applies, and whether the work has been done.

A made-up example: “Amber engine light came on in August 2026 and has stayed on. Code read by a mobile mechanic on 2 October showed a fault in the evaporative emissions system. Car drives normally. Not repaired. Scan printout and dash photo attached.”

If the light comes and goes, say so even if it’s off on the day. The same applies to damage, as our guide to accident history and car value explains.

How does a warning light affect an offer?

It depends on the light, and on whether the buyer knew about it before offering.

A buyer prices risk, not just the repair. An unexplained light could be minor or serious, so a cautious buyer allows for something close to the worst case. A diagnosed fault, with a code, a mechanic’s note and a quote, is a known quantity. The gap between those two prices can be wider than the repair itself.

A dealer also has to think about its next buyer. The ACCC says a second-hand car bought from a licensed dealer must be of acceptable quality, so a dealer buying yours will usually allow for putting the fault right before it resells. Safety-system lights such as airbags and ABS matter to every buyer. A light tied to a minor sensor may matter much less.

Timing matters most. A fault found at inspection, rather than disclosed up front, gives the buyer a reason to revise the price, and our guide to why offers drop after inspection covers what happens then. Inspectors watch the dash at start-up and many plug in a scan tool, as our guide to what’s checked when you sell explains.

Before you accept any offer, ask the buyer, us included, what could change the price after the inspection and what happens to the deposit if it does. And whatever the inspection finds, keep the car until the full amount has cleared in your account.

Deciding what to do about your warning light

If the light is red, flashing or tied to the airbags or brakes, get it checked before anything else. If it’s amber, read the code and check for recall and warranty cover, then choose. Fix it if that’s free or clearly worth it, or disclose it in writing and sell as is. Either way, the buyer should hear about it from you first.

If your car is 2021 or newer with 100,000 km or less, Sell Your Car Australia can make you a genuine offer by phone from a licensed dealer, not an online estimate. Tell the valuer on the call which light is on and what the code says, so the offer is made on the real car. If you accept, a deposit is often paid the same day, and the inspection happens at a time and place that suits you. The balance goes into your bank account, and the car is collected only after you confirm the funds have cleared. There are no fees taken out of the offer.

Start with a free, no-obligation valuation or call 1800 73 55 73. If your car is older or has more kilometres, send it through anyway and we’ll tell you straight away if we can help.