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Is there a Cooling Off Period when Buying a Dealer Car?

Although you may put in countless hours scoping out your next car, it’s easy to have reservations or concerns once you’ve gone ahead with the purchase. It might not necessarily be a case of buyer’s remorse, but it could be that the reality of your personal situation reminds you the car just isn’t right for you.

However, what rights do you have if you’ve taken out a loan to acquire the car? Sometimes, a buyer has the right to return a car to the dealer within a stipulated period, and without penalty. This right, known as the cooling off period, will vary considerably depending on the state where the car was bought, and whether in fact it is a second-hand vehicle or not.



Locations without a cooling off period

First things first, let’s get out of the way the locations where buyers do not have protection via a cooling off period. This includes Western Australia, Tasmania and the Northern Territory. Once you have signed the document, and receive acceptance, there is no recourse to return the car should you change your mind. The only exception to this is any specific clause included in the contract by which you both agree to such a provision, or via court order. In WA, the contract can be cancelled if the seller has not formally told you they have accepted your contract, even if it is already signed.


Purchasing a new car does not provide the owner with the right to a cooling off period. In contrast, a second hand car bought through a licensed dealer offers a cooling off period until close of business the following work day. To retain this right, the car cannot be driven from the dealer’s premises, except for inspection or a test drive.

New South Wales

While commercial vehicles are not covered by a cooling off period, the stipulation applies to all other new and used cars. The duration is one business day. Should you choose to exercise this right, you must notify the dealer in writing and pay the lower of $250, or 2% of the vehicle purchase price.

South Australia

The only cars covered by this provision are those attained second-hand, or ex-demo, from a dealer. Written notice must be provided within two business days to cancel the contract and car loan. If a deposit was provided, the dealer may retain the lower of $100, or 2% of the contract value.


Both new and second-hand vehicles are covered by a three (business) day cooling off period. If cancelling the sale, you must write to the dealer to let them know. If it is a new car, you will be liable for the greater between $400, or 2% of the purchase value. This is lower if the deal was made off-site. Second-hand vehicles cannot leave the caryard for delivery in this period, or else your right is waived. The dealer may retain a lower amount if you cancel the sale of a second-hand car, which is the greater between $100, or 1% of the purchase price.