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Buying a car
Consumer rights and car purchases
Under Australian law, products and services that consumers buy from a business come with automatic guarantees that they will work and do what they’re supposed to do. These are called consumer guarantee rights.
These rights apply to new and used cars purchased from a licensed dealer and cannot be restricted or excluded. They are separate to any manufacturer’s warranty.
If a car fails to meet one or more of the consumer guarantees, consumers can ask the business they bought the car from – the licensed dealer – for a remedy.
These rights include that the car must:
- be of acceptable quality
- be fit for any purpose disclosed before the sale
- match the description provided or the demonstration model
- come with title and undisturbed possession.
Learn more about products and consumer rights.
State based laws apply to cars too
Specific state-based laws also apply to the sale and purchase of motor vehicles that coexist with the consumer guarantees. State and Territory consumer protection agencies can provide information on their individual laws in this area.
Tips for buying a car
State and Territory consumer protection agencies have specific tips and checklists for consumers purchasing new or used cars in their state or territory.
These include:
- the differences between purchasing a car from a licensed dealer, auction house or private seller
- displayed prices and additional fees and charges
- warranties and any cooling-off periods
- pre-delivery and mechanical checks and inspections
- Personal Property Securities Register checks
- finance and insurance.
The Australian Securities and Investments Commission (ASIC)’s Moneysmart website has information on budgeting, car loans, extended warranties and insurance.
Private car sales and auctions
If you buy a car through a private sale or auction, it’s important to check ownership before you purchase. A Personal Property Securities Register check will tell you if there is money owing on the car or if the registered owner does not own the car outright.
Learn more about the consumer guarantees for private sales and auctions.
Fuel consumption values
New motor vehicles are required to display fuel consumption values in a label on the front windscreen. The fuel consumption values come from testing conducted in a laboratory under an international framework. The fuel consumption values produced generally won't be achieved in actual on-road driving.
Displayed fuel consumption values should be used for comparative purposes only.
When considering fuel consumption values:
- use values to compare the fuel consumption of different car models.
- don't take values to represent the actual fuel consumption of a car.
The Department of Infrastructure and Regional Development, Green Vehicle Guide, lists fuel consumption figures calculated under the international testing framework and reported by vehicle manufacturers and importers. These figures can be used for comparison between vehicles.
When buying a new car
Consumers should receive the Just bought a new car? fact sheet about their consumer rights. This should be provided by the supplier, such as the dealer, at the point of sale.
Repairs, replacements and refunds for cars
If a consumer discovers a problem that fails one or more of the consumer guarantees, they may be entitled to a repair, replacement or refund.
Consumers can go back to the salesperson and explain the problem. The seller must assist and cannot tell the consumer to contact the manufacturer for a remedy.
However, consumers are not entitled to a repair, replacement or refund under the consumer guarantees if:
- they got what they asked for but changed their mind, found the car cheaper somewhere else, decided they didn't like the purchase or had no use for it. However, if a business has a ‘change of mind’ policy, they must follow it
- the problem with the car was caused by the consumer misusing it, or
- they knew of or were made aware of the problem with the car before they bought it. They may be entitled to a repair, replacement or refund for a different problem with the car that wasn’t made clear to them before they bought it.
Choice of repairer and service
The Motor Vehicle Information Scheme makes motor vehicle service and repair information available to all Australian repairers and registered training organisations.
Consumers can choose an independent repairer to service and repair their vehicle knowing it's mandatory for car manufacturers to make service and repair information available.
Hiring a car
Most consumer guarantees apply when you hire a car, except those related to ownership.
It's important to shop around and read the vehicle hire contract carefully before signing. The contract outlines rental, insurance and extra costs. It may have limits on the use of the vehicle and in-house insurance.
It may be possible for a consumer to get extra insurance cover for a rental vehicle. This can be from their own insurer, a motor vehicle association or travel insurance package. If you need to make a claim, you will generally pay the excess to the vehicle hire company and claim reimbursement from the insurer.
Some vehicle hire contracts may include you agreeing to unlimited charges on your credit card. It’s important to find out in what circumstances this might occur and the amounts.
Businesses that offer car hire
If you’re a business offering car hire, you must:
- include all mandatory fees in the advertised headline price
- not hide any costs in the fine print of a contract
- be transparent about the method of calculating any fees based on usage
- make sure car rental contracts do not contain unfair contract terms.
Businesses do not have to include optional charges and extras in the advertised price.
Businesses should clearly explain the insurance coverage and its limitations in the contract. Any exclusions from insurance policies must be clearly stated and not buried in the fine print of the contract.
Laws protect consumers from unfair contract terms in standard form contracts. These laws apply to car hire contracts.
Before hiring a car
Consider the following questions when hiring a car:
- what is the total cost, including rental, basic and excess insurance cover and all extra costs? Are rates cheaper online or elsewhere?
- is there a deposit? Are there any circumstances where the deposit will be forfeited?
- are there any gaps in the insurance coverage? For example, single vehicle accidents are sometimes not covered. If so, can the consumer's own insurance from elsewhere be used?
- who is permitted to drive the vehicle?
- if the car is returned early, is there an entitlement to a partial refund?
- if necessary, can the vehicle be picked up in one location and returned to another? Is there an extra cost for this?
- in what circumstances will the hire company make unauthorised charges to the consumer's credit card? What amounts can be charged in each circumstance? When will the company refund money that the consumer is entitled to, such as a security deposit?
Before signing a contract for a hire car
Take the following steps before signing a contract:
- inspect inside and outside of the vehicle for damage with a representative from the company. Take photos of the vehicle, particularly any existing damage.
- make sure any damage found is recorded in the contract and countersigned by the representative
- check that all mechanical and electrical components work
- make sure there is a full tank of fuel
- understand the procedures in the contract that must be followed if the car breaks down or is in an accident
- understand all contract requirements for returning the vehicle, such as the time, place and refilling of the fuel tank.
Returning a hire car
Consumers should take the following steps when returning a car:
- make sure everything that is required under the contract is done
- take photos of the vehicle again to have a record of the condition of the vehicle when you returned it
- if there was no damage to the vehicle while renting it, ask for a written agreement from the company noting that the car was returned undamaged
- if there was damage to the car during the rental, make sure a written agreement is made with the company before leaving the premises. The agreement should detail the costs and procedures for fixing the damage. Also review your insurance policy to check if the cost of the damage is covered.