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Buying a new or used car? Beware of the conditions with cooling off periods

cooling off periods

Senior Associate and Commercial Litigation Lawyer Charles Lethbridge discusses the cooling off periods in the different states when buying a new or used car

When purchasing a new or used car there are different laws in relation to cooling off periods in NSW and QLD.

NSW

In NSW a 1 day cooling off period applies when purchasing a new or used vehicle through a credit contract.

A cooling off period does not apply when a new or used car is purchased in cash or at auction or being purchased by another motor dealer.

A purchaser may terminate the contract in writing to the dealer during this cooling off period.

A termination amount is required to be paid, this is either $250 or 2% of the purchase price – whichever is of lesser value.

The cooling off period begins when the contract is signed and ends at 5pm the next day that the dealer is open for business.

The dealer must disclose the cooling off period to the purchaser and the prescribed form 20 of the Motor Dealers Regulation 1999 must be attached to the contract.

The cooling off period may be extended but this is to be agreed upon by both purchaser and seller and written into the contract.

The purchaser is not entitled possession of the car during cooling off unless it is agreed upon by the dealer and the purchaser is to be liable for any damage to the vehicle during this time other than wear and tear.

If you have a trade-in vehicle with the dealer during this cooling off period the dealer is not to sell the car and is also liable for any damage other than wear and tear.

If you have a dispute with a dealer generally termination of contracts can only occur when the terms and conditions have been breached.

QLD

New Car Purchases

In QLD when purchasing a new car there is NO cooling off period available.

A vehicle is considered a new car if it has never been licensed or registered.  A demonstration car is not considered a new car.

Cooling off period is unavailable when the car is sold by auction or sold privately.

There is no cooling off period available for consignment vehicles and the dealer must tell the purchaser that the car is a consignment vehicle.

If you have a trade-in vehicle with the dealer during this cooling off period the dealer is not to sell the car and is also liable for any damage other than wear and tear.

Used Car Purchases

A cooling off period of 1 day applies to all used car purchases.

If you take possession of the car during the cooling off period you can lose the right to a cooling off period. However you can take the vehicle to an independent mechanic and take the car for a test drive during this time.

A dealer must give you a form PAMD Form 37a before you sign the contract. I they do not give you this for they must give you a 7 day cooling off period.

The dealer can charge you a non refundable deposit during the cooling off period, this cannot exceed $100.

A purchaser may terminate the contract in writing to the dealer during this cooling off period.

A dealer can still offer a car under cooling off to another purchaser, however, if you decide to purchase the car any deposits held form another purchaser are returned.

The cooling off period begins when the contract is signed and ends at 5pm the next day that the dealer is open for business.

Cooling off period in unavailable when the car is sold by auction or sold privately.

There is no cooling off period available for consignment vehicles and the dealer must tell the purchaser that the car is a consignment vehicle.

If you have a trade-in vehicle with the dealer during this cooling off period the dealer is not to sell the car and is also liable for any damage other than wear and tear.

Consumers should never sign a contract for a vehicle unless they are 100% sure about it. You should never sign a contract for cars with more than one dealer and you should never sign a contract for a vehicle that has parts of the contract missing or blank.

If you would like more information or want to obtain the best possible chance of a successful outcome in your dispute , please contact our Commercial Litigation Department Manager, Amanda Heather on direct line 07 5506 8245, email [email protected] or free call 1800 621 071.

We have an experienced dedicated Commercial Litigation team that practices exclusively in these areas.

Please click here to access our team brochure with details of our professional staff.

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Charles Lethbridge

Charles Lethbridge

  • Senior Associate
  • Commercial Litigation
  • Direct line: 07 5506 8240
  • Mobile: 0421 885 195