Buying a car can be an exciting experience, but it is very important you understand your rights and responsibilities when buying or signing a contract for a car.
When buying a new car, you will be asked to sign a contract. Make sure you understand all the conditions of the contract before signing, especially if the contract is subject to finance.
When buying a used car, you will be asked to sign a contract. Make sure you have completed all relevant checks so the car is in a good condition and can be legally sold to you. You should also be aware of the contract’s conditions, any cooling-off period, what is covered under warranty, and how to resolve any disputes about repairs or defects.
When buying a used car in a private sale, you should be aware you may not have the same protections offered to people buying from a used car dealership. If you have bought a used car in a private sale and something goes wrong with the car, get legal advice.
Buying a new car
When buying a new car, you will be asked to sign a contract. Be careful if you are asked to sign something to ‘hold’ the car— make sure you are not signing a contract unless you are ready to buy the car.
After signing a new car contract you cannot just change your mind. There is no cooling-off period (for new car contracts), and there are often standard terms (in the contract) allowing dealers to claim a percentage of the purchase price if you do not go ahead with the contract after you have signed it.
Make sure any extras or special offers included with your new car are in the contract.
If you are getting finance (to buy the car), the contract should be subject to finance, so you do not have to buy the car if the finance is not approved.
Some dealers may offer finance with the car—make sure you understand what is being offered and all the costs. You do not have to go through the dealer for finance. It is best to check all your options first before deciding which finance company to go with. You should also arrange comprehensive insurance for the car.
Get legal advice if you have signed a contract, but cannot meet your obligations.
Buying a used car
When buying a used car, you will be asked to sign a contract. The car you are buying should be checked by a mechanic. You should also get an independent report (eg from RACQ or your own mechanic) about the car’s mechanical condition. The safety certificate only reports on whether the car meets the necessary requirements (roadworthiness) for it to be on the road.
You should also search the Personal Properties Securities Register before buying a registered motor vehicle from anyone other than a registered motor vehicle dealer. This register shows if the car is under a hire purchase, lease, credit arrangement or bill of sale.
To do this search you will need the registration, chassis or engine number details. The search shows whether the vehicle’s title is clear, and there are no other registered claims on the car.
Buying a used car from a used car dealer
There are legal protections for people buying a second hand car from a used car dealer. Before buying a car, you should be given a contract of sale, and a safety certificate.
Contract of sale
Before signing the contract of sale, the dealer must give you:
- a notice including:
- the motor vehicle details.
- details of the cooling off period.
- the amount of the non-refundable deposit.
- a notice about the statutory authority.
Once you have signed the contract of sale, the dealer must give you a copy of the contract.
The contract of sale must be in writing and must include:
- a notice about the cooling-off period.
- a statement confirming you have clear title to the vehicle.
You should also be given a safety certificate for the vehicle. If the car is registered, then the seller must provide—at their expense—a current safety certificate. This is prepared at an Authorised Inspection Station and certifies the car meets the necessary requirements for it to be on the road, but it is not proof the car is mechanically sound. If the certificate is defective, you should get legal advice about whether you can take legal action against the seller or the motor mechanic (or both). You can make a complaint to the Department of Transport and Main Roads.
Get legal advice if you have not been given the proper documents before buying a used car.
It is an offence for a licensed motor dealer to not give you the proper documents, and in doing so, your contract may not be legally binding. You should make a complaint to the Office of Fair Trading and get legal advice.
Cooling-off period for a used car sale
The cooling-off period for buying a car from a used car dealer is 1 full business day (not including Sundays or public holidays). You can cancel an agreement with a licensed dealer during the cooling-off period by giving them a written notice cancelling the contract.
The cooling-off period will usually expire at the close of business on the following business day. If the dealer is not open for a full day (on the following day), then it expires on the close of business on the day after.
You cannot cancel the agreement if you have taken possession of the car within that time for any reason other than a test drive or an inspection of the car.
If you cancel the contract within the cooling-off period, the dealer may retain a deposit of up to $100.
The used car dealer may not sell a car offered as a trade-in until the end of the cooling-off period.
Cancelling a contract with a used car dealer
If a contract is cancelled outside the cooling-off period, the used car dealer is entitled to damages for breach of the contract. There are usually standard terms in used car contracts allowing the dealer to claim a percentage of the purchase price if you do not go ahead with the contract after it is signed. If the dealer breaches the contract, there are some situations where you can cancel the contract without penalty. You should get legal advice.
What does my warranty cover?
A Class A warranty is applied by law to any vehicle sold by a licensed dealer that has travelled less than 160,000kms, and is less than 10 years old.
A Class A warranty will apply from the time you take possession of the car until either you have driven the car 5,000kms or it has been 3 months since you purchased the car, whichever happens first.
A Class B warrant is applied by law to any vehicle sold by a licensed dealer that:
- has travelled more than 160,000kms; and
- is more than 10 years old.
A Class B warranty will apply from the time you take possession of the car until either you have driven the car 1,000kms or it has been30 days since you purchased the car, whichever happens first.
The warranty would not apply to:
- an unregistered vehicle that cannot be registered in Queensland because of its design
- a written-off vehicle.
- a commercial vehicle.
- a caravan.
- a motorcycle.
Vehicles not covered by a warranty must be displayed or advertised for sale as unwarranted.
The warranty will not cover a defect in:
- installed radio, tape recorder or CD player
- a tyre
- a battery
- a radiator hose
- a radio aerial or other aerial
- spark plugs
- distributor points
- wiper rubbers
- oil or an oil filter
- a fuel filter or air filter
- a hose for a heater unit
- paint work or upholstery that should have been apparent at the time of sale
- any additions made after the buyer takes possession
The warranty also does not cover any defects caused by the buyer’s misuse or negligence, or damage from a car accident.
If you think the car has a defect, you must:
- notify the dealer in writing about the defect before the end of the warranty period; and
- deliver the vehicle to the dealer or to a qualified repairer specified by the dealer.
Within 5 business days of being notified, the dealer must advise you in writing whether the defect is covered by the statutory warranty. If they do not respond, then the dealer is taken to have accepted the defect is covered by the statutory warranty.
A vehicle must be repaired within 14 days after the dealer accepts the defect is covered by the statutory warranty, unless they have a reasonable excuse.
The warranty period is extended by 1 day for each day or part of a day the dealer has the vehicle.
The dealer will be taken to have repaired the vehicle when the defective part is repaired.
A statutory warranty does not replace a mechanical inspection before purchase, and you should still complete the mechanical inspection of the car. For example, a car may have a fault that does not appear during the warranty period, or is not covered by a safety certificate, but may cause major problems later.
Resolving a dispute with a dealer about repairing a vehicle
You should try and resolve any disputes with the motor dealer. Each dealer must provide a complaints handling procedure under their Code of Conduct. If you cannot resolve the problem, you can make a complaint to the Office of Fair Trading.
If the dealer has refused to accept the defect is covered by the warranty, failed to repair the defect within the repair period, or failed to repair the defect, then you can apply to the Queensland Civil and Administrative Tribunal (QCAT) to resolve the dispute. Please note that for a defective car or the failure to repair a car then QCAT’s usual monetary jurisdiction has recently been expanded from $25,000 to $100,000 for this type of dispute only. You should get legal advice.
Can the dealer offer to swap the car for another vehicle?
You do not have to accept a different car to the one you originally inspected. If you agree to accept a different car, the dealer should write up another contract or change the existing one to reflect you are taking a different car.
What if the dealer deceived me?
There is a Code of Conduct outlining the standards of conduct for motor dealers, which includes the principles of fair trading.
If you have a complaint about the dealer breaching a Code of Conduct (eg deception), failing to guarantee title (someone else also has a claim to the car) or failing to comply with the cooling off period, then you should first take the complaint to the licensed dealer.
If the dealer does not address or resolve the problem, then you can make a complaint to the Office of Fair Trading. The officers will investigate and this may lead to disciplinary proceedings for the dealer in the QCAT, prosecution for breach or compensation for you.
You should lodge your claim for compensation within 1 year of becoming aware of the loss, or within 3 years of the event that caused the loss (whichever comes first).
Claims against the dealer for things not covered by statutory protections can be brought in the QCAT if the claim is up to $100,000. Claims for more than this must be brought in the ordinary Civil Courts.
Buying a used car in a private sale
By law, when buying a used car in a private sale you do not have the same protections offered to people buying from a used car dealership.
If something goes wrong with the car after you have taken possession of it, it can be very difficult to make the seller responsible for the defect particularly if the agreement is not in writing and it is not clear what was agreed.
You cannot claim against a private seller in the QCAT, only in the State Civil Courts. In these Courts, the claim’s legal costs can be awarded by the Court against the unsuccessful person. You should get legal advice.
Registering your car
All cars driven on public roads in Queensland must be registered every year with the Department of Transport and Main Roads.
When buying a used car, you should transfer the registration. The buyer and seller must sign the transfer of registration form. The seller keeps the copy part of the form, and the buyer lodges the form and pays for transfer and stamp duty.
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