Buying a car
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What should I look out for when I am buying a new car?
When you buy 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.
Once you have signed a contract you cannot just change your mind about the car. The law does not have a cooling off period in new car contracts. There are often standard terms in new car contracts that allow the dealer to claim a percentage of the purchase price if you do not go ahead with the contract after it is signed.
If your deal includes any extras or special offers, make sure these are included in the contract. If you are getting finance, the contract should be subject to finance, so that if your finance is not approved you do not have to buy the car. Some dealers offer finance with the car, make sure you understand what is being offered and what the cost is. You don't have to go through the dealer for finance, sometimes they may have the best deal but you won't know this unless you shop around. A new car is a big investment, make sure you organise comprehensive insurance for the car.
If you have signed a contract and cannot meet your obligations get legal advice.
What should I do before I buy any used car?
You should have the car checked by a mechanic. You should get an independent report e.g. from RACQ or your own mechanic about the mechanical condition of the car. The safety certificate only reports on the roadworthiness of the car. There are many other mechanical defects that are not addressed by the safety certificate and may be difficult and expensive to get repaired after you have taken the car.
You should search the register of encumbered vehicles. This register shows whether the car is under a hire purchase, lease, credit arrangement or bill of sale. You will need details of the registration number or chassis number and engine number. The certificate is proof that the vehicle's title is clear. This means that nobody has any other registered claim on the car.
What should I get upon purchase of any used car?
You should be given the safety certificate. If the car is registered then the seller must provide at their expense a current safety certificate. This certificate is prepared at an Authorised Inspection Station and certifies that the car meets the necessary requirements for it to be on the road. It is not proof that the car is mechanically sound. If the certificate is defective then you should get legal advice as to whether you can take legal action against the seller and/or the motor mechanic. Also you can make a complaint to Queensland Transport.
You should get transfer of registration. The purchaser 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.
You should arrange insurance for the vehicle before you take it on the road.
What if my car breaks down when I bought it in a private sale?
By law, when you buy a car in a private sale you do not have the protection offered to buyers who buy from a used car dealership.
If something goes wrong with the car after you have taken it away, 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 small claims tribunal, only in the state civil courts. In these courts legal costs of the claim can be awarded by the court against the unsuccessful person.
Do I get legal protection when I buy a car from a used car dealer?
The law offers protection to purchasers who buy second hand cars from used car dealers.
What documents should a used car dealer give to me when I buy a car?
The documents you should get are:
- a copy of the signed contract immediately after signing
- a security interest certificate showing no one else has a registered claim to the car
- a form stating:
- particulars about the vehicle
- odometer reading
(You need to sign a form acknowledging receipt of the documents mentioned above. The buyer takes the original form and the seller keeps the copy. The seller may charge a fee for the form.)
- safety certificate
- a notice about the cooling off period should be within the contract
- notice about the car's legal warranty.
What happens if these documents are not given to me?
A licensed motor dealer who does not provide these documents commits an offence and the contract may not be binding. You should make a complaint to the Office of Fair Trading and also get legal advice.
Can I cancel the contract when I bought from a used car dealer?
You may cancel an agreement with a licensed dealer during the cooling off period of one full business day.
A business day cannot be a Sunday or a public holiday. A 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 the cooling off period expires on the close of business on the day after.
You may not 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.
The cancellation must be in writing.
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.
Can I cancel a contract with a used car dealer for other reasons?
If a binding agreement is cancelled the used car dealer is entitled to damages for breach of the contract. There are often standard terms in used car contracts that allow 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 circumstances in which you can cancel. Get legal advice.
What happens if the car breaks down after I take it away from a used car dealership?
A warranty is applied by law to used cars bought from a licensed dealer. The vehicle is warranted as being free from some defects at the time of sale and for the warranty period. The dealer should repair the defects occurring during the warranty period free of charge.
A vehicle that has travelled less than 160 000km and is less than 10 years old is called a class A vehicle: the warranty is for three months or 5000km - whichever happens first.
A vehicle that has travelled more than 160 000km or is more than 10 years old is a class B vehicle: the warranty is for one month or 1000km - whichever happens first.
Vehicles not covered under the warranty are cars which can't be registered in Queensland, or caravans and motorcycles. These must be identified or displayed or advertised that they do not have a warranty at law.
Some defects are excluded from the warranty:
- a tyre
- a battery
- a light
- a radiator hose
- a vehicle accessory, radio, tape deck, cd player or air bags
- paint work or upholstery that should have been apparent at the time of sale
- any additions made after the buyer takes possession
- on vehicles older than ten years old, or more than 160 000km, the air conditioning unit is not covered.
If you believe the car you bought has a defect you must:
- give notice in writing to the dealer of the defect before the end of the warranty period, and
- deliver the vehicle for repair to the dealer or a workshop specified by the dealer.
The dealer must then, within five business days of receiving the notice of the defect and delivery of the vehicle, advise in writing whether the defect is covered by the statutory warranty. If the dealer does not respond, then the dealer is taken to have accepted that the vehicle is covered by the statutory warranty.
The vehicle must be repaired within 14 days. The warranty period is extended for each day the dealer has the vehicle for repair.
A statutory warranty does not replace a mechanical inspection prior to purchase. You should still get the mechanical inspection. For example, a car may have a fault that is not going to appear during the warranty period, or is not covered by a safety certificate, but that may cause major problems later.
What if the dealer refuses to repair?
Approach the motor dealer. Each dealer is required to provide a complaints handling procedure under the Code of Conduct. If this does not solve the problem then make a complaint to the Office of Fair Trading.
What if the dealer offers to swap the car for another vehicle?
You are not obliged 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.
What if the dealer deceived me?
A code of conduct setting standards of conduct for motor dealers establishes principles of fair trading.
If you have a complaint about the dealer
- breaching a Code of Conduct, i.e. deception or
- failing to guarantee title, i.e. someone else also has a claim to the car
- failing to comply with the cooling off period
You should first make the complaint to the licensed dealer. If the dealer does not satisfactorily address the problem, then the complaint should be made to the Office of Fair Trading. The officers will investigate and that may lead to disciplinary proceedings for the dealer in the Commercial and Consumer Tribunal or prosecution for breach or compensation for you.
You should lodge your claim for compensation within one year of becoming aware of the loss, or within three years of the event that caused the loss, whichever is the sooner.
Claims under $5000 will be dealt with by the Office of Fair Trading. The decisions of the Office of Fair Trading can be appealed in the Commercial and Consumer Tribunal.
Claims over $5000 will be sent to the Commercial and Consumer Tribunal. The decision of the Tribunal is can be appealed to the district court on questions of law only.
Claims against the dealer for things not covered by statutory protections can be brought in the Small Claims Tribunal if the claim is up to $7,500. Claims for more than this must be brought in the ordinary civil courts.