Buying or renting a car

Always do your research before buying or hiring a car. Knowing your rights and asking some key questions can help avoid problems.

Buying a new car

Under Australian law, when you buy products and services they come with automatic guarantees that they will work and do what you asked for, under what is referred to as Australia’s consumer guarantee rights.

These rights include that your new car must:

  • be of acceptable quality (including that it is safe, durable and free from defects)
  • be fit for any purpose disclosed before the sale
  • match the description provided or the demonstration model
  • have spare parts and repair facilities available.

When buying a new car, you should receive a fact sheet at the point of sale from the supplier (e.g. the dealer) about your consumer rights, which is titled Just bought a new car?

Repairs, replacements and refunds for cars

If you discover a problem that fails one or more of the consumer guarantees, you may be entitled to a repair, replacement or refund. You can go back to the salesperson and explain the problem. The seller must assist you and cannot tell you to contact the manufacturer.

You cannot get a repair, replacement or refund if you’ve changed your mind, damaged the car, discovered a better deal elsewhere or not followed the seller‘s advice that the car wouldn’t suit your needs.

There are also specific state based laws that 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

Before buying a car:

  • compare on-road costs and operating costs, including registration, compulsory third-party insurance, stamp duty, additional insurance, fuel, servicing and spare parts
  • get an independent safety assessment on new cars through the Australian New Car Assessment Program (ANCAP)
  • test drive the vehicle
  • get an independent vehicle inspection on a used car and check the Personal Property Securities Register (PPSR) to make sure there’s no money owing on it (note the PPSR website charges a small fee to check vehicles)
  • ask about and compare after sales support and warranties that different sellers and manufacturers offer
  • understand the purpose of fuel consumption labels on new cars.

Fuel consumption

New motor vehicles are required to display fuel consumption values in a label on the front windscreen. The fuel consumption values displayed in these labels are derived from testing conducted under an international framework. This testing takes place in a laboratory and the fuel consumption values produced generally will not 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.

New car retailing industry market study

In 2016-17, the ACCC conducted a market study of the new car retailing industry to look at competition and consumer issues in the industry.

See: New car retailing industry market study

Hiring a car

It is important to shop around and read the vehicle hire contract carefully before you sign. The contract outlines rental, insurance and extra costs, and may have limits on your use of the vehicle and in-house insurance.

It may be possible for you to get extra insurance cover for a rental vehicle from your own insurer, a motor vehicle association or travel insurance package.

Note that vehicle hire contracts may include your agreement to the company making unlimited charges to your credit card.

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?
  • are there any restrictions on using insurance if the vehicle is damaged while you’re using it? If so, can you use your own insurance from elsewhere?
  • who is permitted to drive the vehicle?
  • are you entitled to a refund if you can return the car early?
  • if necessary, can you pick up the vehicle in one location and return at another? Is there an extra cost for this?
  • in what circumstances will the hire company make unauthorised charges to your credit card? What amounts could be charged in each circumstance? When will the company refund money you’re entitled to, such as a security deposit?

Before signing a contract for a hire car

Take the following steps before signing a contract:

  1. inspect inside and outside of the vehicle for damage with a representative from the company and take photos of any existing damage
  2. ensure any damage you find is recorded in the contract and countersigned by the company representative
  3. check that all mechanical and electrical components work
  4. ensure there is a full tank of fuel
  5. ensure you understand the procedures the contract requires you to follow if you break down or have an accident
  6. ensure you understand all contract requirements for returning the vehicle, such as the time, place and refilling the fuel tank.

Returning a hire car

Take the following steps when returning the car:

  1. ensure you have done everything you are required to do under the contract
  2. if there was no damage to the vehicle while you were renting it, ask for a written agreement from the company noting that the car was returned undamaged
  3. if there was damage to the car during your rental, ensure you make a written agreement with the company about costs and procedures for fixing the damage before you leave the premises.

If it’s not right, use your rights

Make a complaint

More information

Consumer rights & guarantees