Car Dealer Sold You a Lemon? How to Demand a Refund in Australia

You bought a used car from a dealer. It seemed fine during the test drive. Two weeks later the engine is overheating, the transmission is slipping, or the air conditioning does not work. The dealer says “sold as is” or “no warranty.”

They are wrong. Under Australian Consumer Law, dealer-sold vehicles come with automatic consumer guarantees — regardless of what the contract says.

Your rights

Cars sold by dealers (not private sellers) must be:

• Of acceptable quality — safe, durable, free from defects, and acceptable in appearance (s 54 ACL)
• Fit for purpose — if you told them you needed a car for towing, it must be suitable for towing (s 55 ACL)
• Match the description — if they said “full service history” or “one owner,” it must be true (s 56 ACL)

“Sold as is,” “no warranty,” and “buyer beware” signs do not override these rights. They are void under the ACL.

Major failure = full refund

If the car has a major failure — a problem that would have stopped you buying it if you had known — you are entitled to reject the car and get a full refund. Major failures include:

• Engine or transmission failure within the first few months
• Undisclosed accident damage
• Odometer tampering
• Safety defects (brakes, steering, airbags)
• The car is significantly different from the description

What to do

1. Get an independent mechanic’s report documenting the faults
2. Send a formal Letter of Demand to the dealer demanding a full refund
3. If refused, you can contact your state or territory consumer affairs or fair trading agency, and apply to your state or territory tribunal (in Western Australia, South Australia and Tasmania, the Magistrates Court)

Demand your refund — $49

Claim Done drafts your Letter of Demand for $49. We cite the Australian Consumer Law, your right to reject a major failure, and demand a full refund. You approve it before it goes to the dealer. Done in about 5 minutes.