Someone Owes You Money From a Car Sale? Letter of Demand Guide

You sold the Hilux for $8,000. The buyer paid $2,000 on the day, seemed genuine, and said the rest would come “Friday when I get paid.” You handed over the keys and signed the transfer. It has been five weeks. Friday has come and gone five times. Now the number is disconnected.

You are $6,000 down and you feel like an idiot. Stop that. This is a straightforward debt.

A sale is a contract, even a handshake one

You agreed a price. They agreed to pay it. You delivered the car. They owe the balance. That is a breach of contract, and it is the kind of claim your state’s small claims court or tribunal hears. You do not need a written contract. Texts agreeing the price, the bank transfer for the deposit, and the transfer paperwork are enough.

If the buyer is a dealer or a business, the ACL also applies. If it is a private buyer, contract law is all you need.

Do not try to take the car back

You transferred ownership. Repossessing it yourself is likely an offence. The right path is the money, not the car.

Protect yourself with the rego first

If you have not already submitted the notice of disposal / seller’s transfer to your state transport authority, do it today. Otherwise you are liable for their fines, tolls and camera offences. This does not affect your right to the money.

What you can claim

• The unpaid balance ($6,000)
• Interest from the due date at the court’s prescribed rate
• Filing fees if you have to go to court

Find them

You need a full name and address. You probably have more than you think:

1. The name on the transfer form and their licence (you did check their licence?)
2. The name on the deposit bank transfer
3. Their Facebook Marketplace or Gumtree profile
4. The address where they collected the car, or where you delivered it

The Letter of Demand

A formal letter states the sale, the price, the deposit, the balance, the due date, and demands payment within 14 days. It warns that you will file a claim, that a judgment can be enforced by garnishing wages, seizing bank funds, or a warrant to seize goods (including the car you just sold them), and that a judgment appears on their credit file for five years.

Offer a short payment plan if you like: “$2,000 per fortnight for three fortnights.” It gives them an out and makes you look reasonable if you end up in front of a magistrate.

If they ignore it

File. In most states, claims under $10,000 to $20,000 are fast-tracked, need no lawyer, and cost $100 to $300 to file. If the buyer does not defend, you get a default judgment in weeks. Then the sheriff can act. People who dodge texts do not dodge the sheriff.

Five weeks is already too long. Send it today.

Claim Done drafts your Letter of Demand for $49. Done in about 5 minutes. You approve it before it is sent.

Selling a car that still has finance on it? See can you sell a car with finance owing.