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Cooling-off period for buying a used car

When you buy a used car from a licensed motor dealer, you’re entitled to a cooling-off period of 1 business day. You can cancel the contract during the cooling-off period without large penalties.

A licensed motor dealer cannot refuse to grant you a cooling-off period.

There is no cooling-off period for new vehicles.

After you sign the contract, the cooling-off period will end either:

  • on the dealer’s next business day at 5pm
  • if the dealer closes before 5pm, the following business day at their usual closing time.

You can drive away with the vehicle during this time. However, you will lose your right to a cooling-off period if you do.

This doesn’t count if you take the vehicle:

  • to an independent mechanic for an inspection
  • for a test drive.

The cooling-off period doesn’t apply when you buy a used vehicle:

  • on consignment
  • at auction
  • privately
  • if you are a motor dealer yourself (unless you’re buying it for personal use).

Contract

Once you and the dealer have signed the sales contract, it’s binding on the dealer.

You are bound by the contract as soon as:

  • the cooling-off period expires
  • you drive away with the vehicle during the cooling-off period.

Cooling-off period form

Before you sign the contact, the dealer must fill out and give you the cooling-off period form.

If you don’t get this form, the dealer must give you a 7 day cooling-off period instead of 1 day.

Deposit

The dealer can charge you a non-refundable deposit during the cooling-off period. The amount cannot be more than $100.

If you go ahead with the sale, the dealer takes away this amount from the vehicle’s sale price. If you end the contract, the dealer may keep some or all of your deposit.

The dealer must tell you in writing about these conditions.

Ending the contract

To end a contract, write to the dealer to tell them that you don’t want to go ahead with the sale.

You can deliver it in person, by email or fax.

The dealer cannot refuse your attempt to use your cooling-off period rights.

Interest from another buyer

The dealer may give another person a chance to buy a vehicle, even once it’s under contract. The second buyer can only buy the car if the existing contract falls through. This is usually when the original buyer ends their contract during the cooling-off period.

Once the original buyer takes the vehicle home, the dealer must fully refund the second buyer’s deposit.

Consignment vehicles

A consignment vehicle is sold on behalf of someone else. Usually a consignment sale involves a motor dealer selling a vehicle on behalf of its owner.

Consignment vehicles don’t have a cooling-off period.

The dealer must tell you that:

  • it’s a consignment vehicle
  • the cooling-off period doesn’t apply.

Any advertisements must also clearly state this.

Vehicle trade-in

You may have traded in your old vehicle as part of the agreement. The dealer must return it to you if you cancel in the cooling-off period.

Last updated
18 December 2014

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