A local resident saw a boy matching William Tyrrell's description being driven away from the area the day he disappeared, a NSW inquest has been told.
Ronald Chapman was outside his Laurel Street home in Kendall on September 12, 2014, when he saw two cars travelling east, a senior detective told the state's Coroners Court on Monday.
In the back seat of the first car, driven by a woman, was a boy in a Spider-Man suit, the court heard.
William was three and wearing a Spiderman suit when he went missing from his foster grandmother's Kendall home that same day.
Detective Sergeant Laura Beacroft told the inquest further interviews with Mr Chapman led her to believe he wasn't making up the possible sighting.
Laurel Street sits between Benaroon Drive - where the foster grandmother's home was - and the Pacific Highway on the eastern side of Kendall.
It links to Benaroon Drive via Batar Creek Road.
The detective said while Mr Chapman believed the two cars may have been driving in convoy, it was possible the cars just happened to be heading in the same direction at the same time.
She said she wasn't sure if he provided a description of the person driving the second car.
The inquest was also told on Monday that more than 400 "persons-of-interest packages" were created as police tried to identify and interview every person who could have taken William.
Acknowledging "person of interest" wasn't an official term used by NSW Police and had no settled definition in policing worldwide, Det Sgt Beacroft said those on the list included neighbours and people living in nearby streets.
"It was a very low standard to meet in order to become a person of interest," she said.
Officers spent months interviewing hundreds of the 1140 people living in the mid-north coast town with a list of set questions before making more targeted inquiries with so-called persons of interest.
Police asked about each person's movements on the morning William disappeared, how they learned of his disappearance and whether they, or others in their home, helped in the search, Det Sgt Beacroft said.
Residents were also asked to detail all deliveries and repairs to their home over a one-year period.
During those inquiries, a couple living on Benaroon Drive shared that they'd heard a car going towards the foster grandmother's home and turning around about the time William went missing.
Sharelle and Peter Crabb said they were on their back verandah when heard the car about 10.05am, the inquest was told.
Det Sgt Beacroft said though 150 metres away from the foster grandmother's home, the Crabbs could likely hear a car in the quiet street.
The inquest continues.
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