Buying a new car

Contracts of sale

The 'contract of sale' for the purchase of a car is a legally binding document.

Do not sign a contract or pay a deposit until you are sure you want to buy the car.

Make sure the contract:

  • has no clauses, terms or conditions you don't agree with
  • includes all promises for additional work to be carried out (repairs and inclusions such as servicing)
  • shows the trade-in amount (if applicable)
  • includes any specific requests you have
  • has a specific delivery date.

You should:

  • never sign an incomplete contract
  • always keep a copy of any signed documents.

If there have specific contract requirements, make sure they are included in the contract.

Cancelling the contract of sale

There is no statutory cooling-off right for car sales in Tasmania. You can only cancel a sale contract by agreement with the car seller or a court order.

You can apply to the Magistrates Court of Tasmania for an order to cancel the contract if you believe

  • the contract doesn't comply with the Motor Vehicle Traders Act 2011, or
  • that the trader made a false claim about the odometer or odometer reading, or
  • the vehicle is 'substantially different' from the pre-sale disclosure statement.

You must inform the Motor Vehicle Trader in writing why you wish to cancel the contract. This must be done within 90 days after you take delivery of the car.

You have 60 days after notifying the trader to apply to the magistrates court to cancel the contract.  This is so that you have time to attempt to resolve the matter with the trader.

if you make a claim to the magistrates court, the magistrate can:

  • order the contract remain in force
  • order the contract be cancelled; or
  • make an order to resolve the dispute.

Total cost

Car sellers often display a ‘cash’ price and a ‘total’ price for vehicles. The motor vehicle trader or seller must specify all mandatory costs.

The costs should include the sum of:

  • the actual price of the car
  • motor vehicle duty
  • dealer delivery charges
  • any other levies
  • fees that must be paid before the consumer receives the car.

Make sure you know the full cost of the car, including add-on costs such as window tinting and rust proofing.


It is common practice for licensed motor vehicle traders to take a holding deposit from consumers, in order to reserve the car.

The deposit amount may vary. However consumers should only pay the minimum deposit the dealer will accept.

You should:

  • check if the deposit is refundable
  • understand the terms and conditions
  • get a receipt for the payment made.

Pre-delivery check

Before drive off with a new car, you should check:

  • there are no dents or chips in the paintwork
  • there are no cuts or scratches on the interior
  • there is a spare tyre, tool kit and jack
  • the lights and indicators are working properly
  • the build date of the car
  • all accessories or extras ordered are included
  • the features specified in the contract are included.


Manufacturer's warranty

All new cars come with a manufacturer’s warranty covering any faults and defects.

Take care reading the warranty, as details such as the length of the warranty period can vary.

Before the warranty expires, it’s a good idea to have a mechanic do a full check on the car. This allows problems to be fixed within the warranty period.

Extended warranty

Motor vehicle dealers may also offer extended warranties at the point of sale or at the end of a manufacturer’s warranty. These warranties extend the coverage provided in the original manufacturer's warranty, usually at an additional cost. Extended warranties are optional.

Extended warranties may restrict your choice of mechanic and parts used, or lock the car into a service schedule with a specific dealer or group of dealerships.

Regardless of the type of warranty (or even after a manufacturer's warranty expires), you still have protection under the Australian Consumer Law if there is a problem with a vehicle.

Statutory warranty

Licensed motor vehicle traders must provide a statutory warranty at no extra cost if the car:

  • is less than 7 years old, and
  • has travelled less than 120 000km.

The warranty expires after 3 months or after 3 000km, whichever happens sooner.

The following vehicles do not have a statutory warranty:

  • cars that are out of the warranty period
  • motorcycles
  • caravans
  • commercial vehicles
  • cars being sold on consignment for a private seller
  • cars that can’t be registered because of their design
  • cars that are on the ‘written-off’ register.

Dealers or auctioneers must state if a car does not come with a statutory warranty.

What statutory warranties cover

A statutory warranty will cover most defects, including where a part does not do what it is supposed to do, or has worn out so much that it no longer works.

A statutory warranty does not cover defects:

  • occurring in brake linings, pads, drums, discs, clutch pressure plates, spigot bearings, clutch release bearings or flywheel clutch plates, tyres or batteries
  • subject to a manufacturer's recall
  • resulting from unauthorised repair after sale
  • resulting from failure to maintain or service the vehicle after sale
  • resulting in accidental damage due to from misuse, negligence, immersion in water, collision, accidental or deliberate damage, or water freezing after sale
  • resulting from racing or trialling
  • resulting from any unauthorised repairs, fittings or modifications made to the vehicle after the time of sale.

Making a claim

If a problem or fault is covered by the statutory warranty and no manufacturer's warranty applies, the motor vehicle trader must have the car repaired at no cost to you.

A claim for repair must be made:

  • within 7 days of the problem or fault being discovered (unless a longer time is specified in the contract or any additional warranty), or
  • within 7 days of the owner being notified that the manufacturer has refused repair under a manufacturer's warranty.

The repair must be carried out according to industry standards.

The repaired car must be 'fit for purpose' and in a reasonable condition, having regard to its age, its original price and description, and all other relevant circumstances.

It may be acceptable for example to fit a second hand part to a used car.

Consumer guarantees

The Australian Consumer Law offers protection for consumers buying vehicles. There are the consumer guarantees:

  • sellers and manufacturers must not mislead consumers about a car’s make, price, quality, fuel consumption or performance
  • the car must be of acceptable quality, fit for the purpose explained to the seller by the consumer, and match any descriptions and the demonstration model.

Your consumer guarantees will apply:

  • for a reasonable amount of time after buying the car
  • even if the car didn’t come with a statutory warranty
  • regardless of any other warranties from the business
  • even if other types of warranty have run out.

You can seek a remedy (a solution to the issue) if a business sells a car that doesn’t meet a consumer guarantee.

Under consumer guarantees, a failure may be corrected by:

  • returning the car for a refund or a replacement
  • getting repairs to the car
  • being compensated, such as for a drop in value.

Read the updated Guide to Motor vehicle sales and repairs (Australian Consumer Law) (PDF, 1.5 MB)

Making a complaint

Complaint to a business

If there is a problem with a motor dealer or business, the first thing you should do is talk to them. Usually, people want to do the right thing and will be happy to fix any problems.

Complaint to an industry body

You might also be able to complain to the Tasmanian Automobile Chamber of Commerce, which is the representative body for the Tasmania’s automotive industry.

Consumer assistance and advice is available regardless of whether the business or retailer is a TACC member or not.

Lodge a formal complaint

If the issue remains unresolved, you can make a formal complaint

Related information

Updated: 25 Jul 2022

This page has been produced and published by the Consumer Building and Occupational Services Division of the Department of Justice. Although every care has been taken in production, no responsibility is accepted for the accuracy, completeness, or relevance to the user's purpose of the information. Those using it for whatever purpose are advised to verify it with the relevant government department, local government body or other source and to obtain any appropriate professional advice. The Crown, its officers, employees and agents do not accept liability however arising, including liability for negligence, for any loss resulting from the use of or reliance upon the information and/or reliance on its availability at any time.