I AM UNHAPPY WITH A USED CAR I BOUGHT FROM A MOTOR CAR TRADER Use this fact sheet if you: are a consumer who has purchased a used car from a Licensed Motor Car Trader (LMCT); and the car is not a commercial vehicle and was not purchased at auction; and you are unhappy with the transaction.
Motor car transactions can be complex. This factsheet is designed only to give you general information about some, but not all, of your rights and obligations. !! IMPORTANT !! Don’t delay in seeking legal advice: it can be much more difficult – and often impossible – to get out of the contract or exercise your rights if you let too much time pass. Cancelling a motor vehicle contract without legal grounds can have serious consequences. Be sure to seek legal advice before you take any action. Cooling-off rights The Motor Car Traders Act may allow you to cancel a contract to purchase a used car from an LMCT within three clear days of signing the contract. The three clear days does not count the day on which the contract was signed, Saturday, Sunday or a public holiday. Some of the important things to note are: Usually the LMCT will have you waive your cooling-off rights. However, the LMCT may not be able to rely on this waiver if it is not in the right form, if it is not signed immediately before you take delivery of the car, or the LMCT acted unfairly towards you or misled you in getting you to sign the waiver. Notice of the cancellation must be in writing. The LMCT must return your tradein and most of the money you have paid, but will keep 1% of the purchase price or $100, whichever is greater. You will usually have to pay for any damage (except fair wear and tear) caused when you had the car. The three day cooling-off period does not currently apply to new cars, commercial cars, or cars bought at auction. The law is due to change to introduce a three day cooling-off period in relation to new cars. Under the new law, the LMCT must return your trade-in but will keep 2% of the purchase price or $400, whichever is greater. This change will come into effect no later than 1 December 2008, so get advice
about your rights to cancel a contract to buy a new car if you have recently signed up. Other reasons for cancelling under the Motor Car Traders Act If the trader has made a false representation about the odometer reading of the car; or If the contract for sale of the car does not contain the prescribed particulars, terms and conditions; or If the car is substantially different from that represented in the notice attached to the car when it was sold,
conduct breaching the Fair Trading Act. However, in order to protect all your rights you should seek legal advice immediately if you think you have been lied to or treated unfairly. Problems with the safety and quality of the car Implied conditions and warranties For most contracts there will be an implied term that the car be of merchantable quality and fit for purpose. Whether the car you bought meets these standards will depend upon a number of things including the price, the apparent condition of the car and whether you inspected the car before you signed. For more information on implied conditions and warranties see our fact sheet on implied terms. If there are problems with the quality of the car, it is important that you seek legal advice immediately. If you delay: you may be deemed to have accepted the car and therefore lose any right you may have to cancel (although you may still be able to claim damages); you may be unable to get the evidence required to prove that the vehicle was defective when you took delivery.
then section 45 of the Motor Car Traders Act may allow you to apply to apply to VCAT or the Magistrates Court to rescind your contract (ie you return the car to the trader and the trader returns the money you have paid) . You have 3 months for the time you signed the contract to apply for an order. However, if you have complained to the trader within 3 months of signing the contract, you have one month from the complaint to apply for an order. Being misled or treated unfairly If you feel you were misled, lied to, taken advantage of or treated unfairly, you may have rights to cancel the contract or seek damages. The Fair Trading Act 1999 (Vic) prohibits misleading or deceptive and unconscionable conduct. You will generally have six (6) years to take legal action from the date of the
Roadworthy certificate An LMCT should not sell you a used car without providing a current roadworthy certificate. A roadworthy certificate: is current if it has been issued in the last 30 days; only relates to the most important safety related parts of the car that can be easily inspected; does not tell you about the general condition and mechanical reliability of the vehicle.
it only applies to a car which was manufactured not more than 10 years before the date it was sold and which has been driven for less than 160 000 kilometres; the warranty period is for 3 months or 5,000 kilometres from when you take delivery of the car, whichever comes first; the trader can exclude defects. The steps the LMCT must take to exclude defects is reasonably complex, so get advice if you have signed anything relating to exclusions; defects occurring in tyres, battery and certain accessories are not covered.
The roadworthy certificate might tell you if the vehicle is safe to drive, but it will not tell you whether it is likely you will have to pay some hefty repair bills in the near future. If you want to know about the mechanical soundness of a car you will be need to get a comprehensive inspection done, like those offered by the RACV and VACC. If you think you have been issued with a false roadworthy certificate: get the car tested immediately by another licensed vehicle tester; make a complaint to VicRoads; seek advice from Consumer Action about your rights in relation to warranties and cancelling your contract, and taking action against the original licensed vehicle tester.
If the LMCT is refusing to fix the car and the car is covered by a warranty under the Motor Car Traders Act you can make a claim to the Motor Car Trader’s Guarantee Fund. You may also have been sold an extended warranty under your contract. This will set out what is covered, how much will be paid for repair of a defect and the circumstances under which cover will be given. If the company who provided the extended warranty is refusing to fix your car as agreed, seek advice about making a claim in the Victorian Civil and Administrative Tribunal. Loan (credit) contracts If you have paid for the car with a loan contract, you will need to consider what to do about it.
Warranties Often a used car sold by an LMCT will be covered by a warranty under the Motor Car Traders Act. Some things to note about this warranty are:
If the loan has already been drawn down, it is important that you do not stop payments until you have sought legal advice. See our fact sheet on Linked Credit Disputes and get legal advice. See also our sheets on Motor Finance Wizard Where things have to happen before the contract goes ahead, like getting finance Often people will make their contract with the LMCT subject to conditions, like obtaining finance of the purchaser’s choice or subject to a satisfactory mechanical test. If you agreed with the trader that something would happen before the deal would go ahead, and that thing does not happen, then you may be able to end the transaction. In some circumstances, under section 124 of the Consumer Credit (Victoria) Code you will be entitled to cancel the contract even if you did not make the contract subject to finance but you make it known to the LMCT that you need finance, and you made
reasonable attempts to obtain credit on reasonable terms, but were unable to do so. The LMCT arranged insurance, credit, consumer credit insurance, and gap insurance Often an LMCT will sell or arrange insurance, credit, consumer credit insurance and gap insurance. Often the LMCT will be paid a commission for selling you these products. Get advice if you do not understand exactly what you have been sold. Delayed delivery If the trader delays making the car available for delivery by more than 14 days from the delivery date stated in the contract, you may be able to cancel the contract by notifying the trader in writing. This will not work if you caused the delay. Canceling the contract without legal grounds If you try to get out of the contract without a lawful reason you could be sued for damages. If you are unhappy with the deal you must get legal advice immediately, so that you can weigh up your options.