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Buying a Car (ACT)

It is a significant financial decision to buy a car. It is essential to know what your legal rights are if the purchase does not turn out the way you had hoped. Generally, there are three ways of buying a car in the Australian Capital Territory. These are through a motor dealer, at an auction or through a private seller. Your rights as a purchaser may differ depending on how you purchase the vehicle.

Buying a car through a motor dealer

In the Australian Capital Territory, motor vehicle dealers are required to abide by the Sale of Motor Vehicles Act 1977 (the Act). This provides purchasers with further protections than are available when purchasing vehicles through private sellers. A motor vehicle dealer must guarantee clear title on the vehicles that they sell. This means that there is no money owing on the vehicle to a financial institution or another lender.

A new vehicle purchased from a motor dealer will most probably come with a manufacturer’s warranty. This will entitle you to have certain repairs done without charge within a certain time of purchasing the vehicle. You may also be entitled to a new vehicle or a refund. This will depend on the significance of the defect that becomes apparent after purchase. It is important when purchasing a new car to determine how any manufacturer’s warranty may apply.

The Act also provides that warranties are to apply to certain used vehicles. These used vehicles are those which are less than ten years old, and that have travelled less than 160,000 kilometres. The warranty for these vehicles is for 5,000 kilometres or for three months, whichever comes first. If the vehicle proves to be defective within this time, the dealer must repair the defects and restore the car to a reasonable condition. When considering what is a reasonable condition, the age and the distance that the car has travelled can be taken into account. There are certain things that will not be covered by these warranties. It is important that you make sure you understand what is and what is not covered by the warranty before buying a car.

If you buy a car from a motor dealer, you are also entitled to a cooling-off period after you sign the contract for purchase. This period is three business days from the time of purchase. Your deposit may not be fully recoverable if you exercise your right to terminate the contract during the cooling-off period.

Buying a car at an auction

You may be able to obtain a bargain by purchasing a vehicle at an auction. However, it is important to be aware that you may not be entitled to the same protections as you would be if you bought a car from a motor dealer.

If an auctioneer is acting on behalf of a licensed motor dealer, your car may be covered by a statutory warranty if it is less than ten years old and has travelled less than 160,000 kilometres. However, if the auctioneer is not acting on behalf of a licensed dealer, you may only be able to seek relief against an auctioneer for a purchase of a vehicle which you later find out to be defective if you can show that they have deliberately misrepresented the vehicle.

Buying through a private seller

If you buy a car through a private seller and later find out it is defective, there will be little recourse to restore you to the position you would have been in had you not purchased the vehicle. You will not be entitled to a statutory warranty on the vehicle or a cooling-off period when buying a car through a private seller. This is why it is extremely important when purchasing a car privately that you make proper inquiries about what you are purchasing. Where possible, you should have your own mechanic look over the car to ensure it is in a reasonable condition and in working order. You should also make inquiries to ensure that there is a clear title on the vehicle, i.e. that no money is owing on the vehicle and it is not likely to be repossessed from you by someone or an institution. To do this, you can search the Personal Property Securities Register (PPSR).

If you require legal advice or representation in any legal matter, please contact Armstrong Legal.

Kathryn Sampias

This article was written by Kathryn Sampias

Kathryn Sampias has a Bachelor of Laws, a Bachelor of Arts and a Graduate Diploma in Journalism. Kathryn was admitted to practice in 2005 and practised law for more than eight years, working both in private practice (mainly in defence litigation for professional indemnity disputes) and in the public service for the Australian Securities and Investments Commission (ASIC) in enforcement.

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