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Buying a car

Buying a new car

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.

Buying a used car

What should I do before I buy a used car?

You should have the car checked by a mechanic. You should get an independent report (eg 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.

If you buy a registered motor vehicle from anyone other than a registered motor vehicle dealer you should search the Personal Properties Securities Register. 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.

Buying a used 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 used car?

Before you sign the contract, the dealer must give you:

  • a notice that includes:

    • the details of the motor vehicle
    • details of the cooling off period
    • the amount of the non-refundable deposit
    • a notice about the statutory warranty.

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 that 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 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. You can also make a complaint to Department of Transport and Main Roads.

If you have not been given proper documents or notice, you should get legal advice.

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 get legal advice.

Cooling off period for sale of vehicle from a used car dealer

The cooling off period for buying a vehicle from a used car dealer is one full business day. You may cancel an agreement with a licensed dealer during the cooling off period by giving written notice to the dealer.

A business day cannot be a Sunday or a public holiday. 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 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 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 outside the cooling off period?

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. You should 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 any vehicle sold by a licensed dealer that:

  • has travelled less than 160,000kms, and
  • is less than 10 years old.

The warranty will not apply to:

  • an unregistered vehicle that is incapable of being registered in Queensland because of its design
  • a written off vehicle
  • a commercial vehicle
  • a caravan
  • a motorcycle.

Vehicles which are not covered by a warranty must be displayed or advertised for sale as unwarranted.

The warranty period starts when you take possession of the vehicle and ends when the vehicle travels 5000km or three months after you take possession – whichever happens first.

The warranty will not cover a defect in:

  • an airbags
  • installed radio, tape recorded 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 will also not cover any defects that occur as a result of the buyer’s misuse or negligence or damage from a car accident.

If you believe the car has a defect, you must:

  • notify the dealer in writing of 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 the dealer does not respond, then the dealer is taken to have accepted that the defect is covered by the statutory warranty.

A vehicle must be repaired within 14 days after the dealer accepts that the defect is covered by the statutory warranty, unless the dealer has 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 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.

How can I resolve a dispute with a dealer about repairing the vehicle?

You should first approach the motor dealer and try to resolve the issue. Each dealer is required to provide a complaints handling procedure under the Code of Conduct. If this does not solve the problem, you can make a complaint to the Office of Fair Trading.

If the dealer has:

  • refused to accept that the defect is covered by the warranty
  • failed to repair the defect within the repair period
  • failed to repair the defect

then you can apply to the Queensland Civil and Administrative Tribunal to resolve the dispute. You should get legal advice.

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, ie deception or
  • failing to guarantee title, ie 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 Queensland Civil and Administrative Tribunal (QCAT)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 $10,000 will be dealt with by the Office of Fair Trading. The decisions of the Office of Fair Trading can be appealed in the Queensland Civil and Administrative Tribunal.

Decisions by Queensland Civil and Administrative Tribunal (QCAT) can be appealed.

Claims against the dealer for things not covered by statutory protections can be brought in the Queensland Civil and Administrative Tribunal if the claim is up to $25,000. Claims for more than this must be brought in the ordinary civil courts.

Buying a used car in a private sale

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 Queensland Civil and Administrative 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. You should get legal advice.

Registration

Do I have to register my car?

Cars that are driven on public roads in Queensland are required to be registered every year with the Department of Transport and Main Roads.

Transfer of registration

When buying a used car, you should get a transfer of 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.

Do I need legal advice?

You may need legal advice if

  • you have signed a contract and cannot meet your obligations
  • you purchased a used car with a defective safety certificate and want to take legal action against the seller and/or mechanic
  • the dealer did not provide you with the documents they were supposed to when you bought the car
  • a motor dealer has breached your contract and now you want to cancel the contract.

Get legal advice

Legal Aid Queensland may provide legal advice if you are having a dispute with a licensed motor dealer about buying a used car. Our Consumer Protection Unit (CPU) may provide specialist legal advice and assistance with disputes with credit providers and insurers.

Legal Aid Queensland can also refer you to the following services who may be able to provide legal advice.

Caxton Legal Centre Consumer Law Service provide free specialist legal advice to people with consumer and consumer credit legal problems, including loans, bankruptcy, debt collection, mortgage brokers and financial advisors.

Gladstone Community Advisory Service provide free legal advice about consumer matters.

Cairns Community Legal Centre - Consumer Law Service provides legal help in the areas of consumer credit matters, consumer product disputes, consumer service disputes, consumer debt matters, bankruptcy and other consumer law matters for socially and financially disadvantaged members of the community.

LawRight Self Representation Service (QCAT) provide legal advice about appealing a QCAT decision, and can give advice about other options to resolve your dispute. The service may also help with drafting documents and correspondence relating to your legal matter with QCAT. They do not provide representation.

LawRight Refugee Civil Law Clinic provides free legal advice and assistance to refugees, humanitarian entrants, asylum seekers and temporary protection visa holders, including advice about debts, loan agreements and bankruptcy.

LawRight Mental Health Law Practice provides legal advice to to people with a mental illness on civil law issues including credit/debt law issues.

Students Legal Service - University of Queensland provides free legal advice to students of UQ, including advice about consumer matters and responding to letters of demand.

Queensland Law Society can refer you to a specialist private solicitor for advice or representation.

Who else can help?

These organisations may also be able to help you with your matter. They do not provide legal advice.

Queensland Civil and Administrative Tribunal (QCAT) has information if you have suffered a financial loss because of the actions of motor dealers, auctioneers or their employees.

Personal Property Security Register has information about registered security interests over personal property, including cars.

Office of Fair Trading provides information about buying used and new cars, resolving disputes with motor vehicle repairers, REV searches before you buy a car, and handles complaints about motor dealers breaching their Code of Conduct.

Queensland Ombudsman investigates complaints about decisions and actions of Queensland's public sector agencies, including motor vehicle registration, licences, and road maintenance.

Financial Ombudsman Service offer dispute resolution over complaints about financial services, including general insurance.

Department of Transport and Main Roads can deal with complaints and enquiries about motor vehicle modifications, safety certificates, registration, motor vehicle inspections and related concerns.

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