Cooling-off period for selling a car

By law, you must give your customers a cooling-off period of 1 business day.

You must fill out and give to the buyer an approved form before they sign the contract.

Cooling-off period and statutory warranty (motor dealer or chattel auctioneer to buyer) form (PDF, 172KB)

If you do not give the buyer a copy of the form:

  • the buyer will be entitled to a 7-day cooling-off period
  • you could be fined.

Length of period

When it begins

The cooling-off period begins as soon as you and the buyer have both signed the contract.

A business day is defined as a day that you are open for business but not a Sunday or public holiday (even if you open).

When it ends

The cooling-off period ends at 5pm on the next business day. It may extend into a 2nd business day if you close for the day significantly earlier than 5pm.


You do not need to give a cooling-off period when:

  • the vehicle is on consignment
  • you are selling by auction
  • the buyer is another motor dealer.

Applying the period


The buyer can cancel the contract for any reason by:

  • giving you a written notice
  • delivering it before the end of the cooling-off period.

You cannot:

  • refuse a buyer’s cancellation
  • harass or coerce a buyer into not cancelling.

Trade-in and deposit

During the cooling-off period, you may accept a buyer’s:

  • trade-in vehicle
  • paid deposit.

If the buyer cancels the contract:

  • you must return the vehicle
  • you may only keep up to $100 of the deposit.

You must tell the buyer about the non-refundable deposit. Put this in writing when they pay their deposit.

Option to purchase

If a vehicle is already under contract and in its cooling-off period, you may still sell an option for it. This means that if the first contract falls through, the option holder can buy the vehicle.

You may only do this with one other buyer.

You must give them a written statement to clearly set out:

  • that their contract is conditional on the first buyer’s contract falling through
  • at what point they can exercise any rights under the contract
  • how much of the deposit is non-refundable.

A deposit can only be non-refundable if they choose to withdraw their option. It does not apply when the first buyer completes their sale.

The statement must include:

  • the principal licensee’s name
  • your business address
  • the second buyer’s name and address
  • a motor dealer’s receipt
  • the date and time.

If the first buyer buys the vehicle:

  • the second buyer’s option ends
  • you must refund the second buyer’s deposit.