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Navigating Used Car Purchase Disputes What Are Your Rights?

Table of Contents

Motor Vehicle Transactions

Licensed Motor Dealer

If you choose to buy a used car from a licensed motor dealer you will have greater protection than if you buy a motor vehicle from a private seller. Not only do licensed dealers have insurance but they are usually businesses or companies with strict policies and procedures. Consumer guarantees exist within licensed businesses and businesses are more likely to comply with Australian Consumer Law guidelines.

If you have ever purchased a motor vehicle from a licensed establishment then you would be aware that there is a sales person who is required to adhere to fair trading laws. They must seek fair market price for the vehicle and there is consumer protection. They may offer a consumer guarantee or a manufacturer’s warranty (depending on the age of the vehicle) and there is a clear process for raising and handling of complaints.

Private Sale

It is common for people to buy second hand cars from private sellers through websites such a gumtree, Facebook, private advertisements, etc. Whilst Australian Consumer Law does still apply to these types of sales, the consumer guarantees apply differently.

A private transaction does not allow for the same types of financing options often as car dealerships. A private seller does not usually offer financing through a financial institution. All finance needs to be sorted out prior to the transaction taking place and money is to be paid in either cash or a bank transfer.


Whether engaging in a second hand car transaction or a brand new motor vehicle transaction, warranties need to be upheld. Manufacturers warranties for example transfer with the vehicle until the warranty expires. It is important that warranties are upheld for consumers to avoid motor vehicle disputes. Manufacturers warranties cover aspects of the vehicle such as the engine, timing belt, etc.

If something happens to your motor vehicle which is covered under manufacturers warranty then you can have it repaired without needing to pay the cost or expense. You may even be able to get a refund for the vehicle if the defect is severe enough. In the event you do cover the cost of a defect without knowing it is under warranty then you can have the supplier refund you the money owing once coming to realize it is under warranty.

Cooling Off Period

During a motor vehicle transaction, there is a three-day cooling off period from the date of signing the contract. This is an opportunity for you to pull out of the sale if you no longer wish to go through with the contract. The contract is null and void however if the car is delivered during the three-day period as you would have already accepted its delivery.

Whilst a private seller may not have you sign a physical contract for the motor vehicle transaction, any evidence of how the terms of the transaction would be evidence of a contract. I.e. price, time of transfer, etc.


Both sellers and purchasers have statutory rights under the Consumer Rights Act which allow legal protection. It will be important to access civil law advice if you require assistance with a legal matter of this nature. It is important to not only understand your legal rights but to have assistance with interpreting the legislation. Consumer law is not an area that should be undertaken without proper knowledge and expertise.

When referring to second hand cars, an acceptable quality refers to the quality of the vehicle at the time of the transaction. The vehicle should not be defective, or if it does have defects it should have been disclosed, and the quality of the vehicle should be reflected in its fair market value or cost. The level of warranty remaining on the vehicle may also affect the market value of the motor vehicle.


If a motor vehicle is sold at auction then the transaction must still comply with consumer guarantees and principles otherwise the purchaser is entitled to a refund. A motor vehicle sold at auction is not subject to the same cooling off period as other sales and will not always include the same consumer protection.

Statutory warranty covers certain aspects of owning a second hand car. For example, if your odometer has a reading of less than 160,000 on the day of the transaction then you will be protected by statutory warranty. This type of class A warranty expires after either the first three months of purchase or 5,000 km's whichever comes first.

To have as much confidence as possible in the transaction prior to purchasing a motor vehicle, you should obtain information about what servicing has been undertaken. A logbook should be provided with the car which details any issues experienced, when the last service was undertaken, how many km's the vehicle has, etc.

You will also need correct details about the make, model and age of the vehicle. If there are any manufacturer warrant issues, then these also should be disclosed early on in the transaction. If possible, information regarding Tyre changes and brake pad changes may be of use. Ultimately, the quality of the vehicle will be reflected in the market value.


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