Bought a Faulty Car from a Dealer: Refund or Repair Demand

You bought a car from a dealer, drove it home, and soon afterwards it broke down, won’t start, has engine trouble or serious faults the dealer never mentioned. The dealer is now avoiding your calls, offering excuses, or telling you it’s your problem.

Claim Done drafts your formal refund or repair demand letter to the dealer for $49. The letter is built from your answers to plain questions, sets out the faults, the consumer guarantees under the Australian Consumer Law that you say apply, what you are asking for (refund, replacement or repair), and a deadline for the dealer to respond. You read and approve it before we email it to the dealer for you.

Consumer Guarantees Under Australian Consumer Law

Cars bought from a licensed dealer in Australia generally come with automatic consumer guarantees under the Australian Consumer Law. These guarantees apply regardless of what the dealer’s own warranty says, and the Australian Consumer Law generally limits a business’s ability to exclude them through wording on the contract or receipt.

The key guarantees include:

• Acceptable quality: the car should be safe, durable, free from defects, and fit for normal use. A car that breaks down shortly after purchase, has serious mechanical faults, or is unsafe to drive may fail this guarantee.
• Fit for purpose: if you told the dealer what you needed the car for — towing, long-distance driving, a family car — it should be reasonably fit for that purpose.
• Match the description: the car should match what the dealer told you or advertised. If the dealer said it had a new engine, low kilometres, no accidents, or particular features, and that was not true, the car may fail this guarantee.

Selling a car “as is” or including an exclusion in the contract does not automatically remove these guarantees, because the law generally limits attempts to contract out of them. How the law applies to your purchase depends on the facts.

What Counts as a Major Failure

Under the Australian Consumer Law, if a fault is a major failure, a consumer may be able to reject the goods and seek a refund or replacement.

A fault may be a major failure where, for example:

• The car is unsafe to drive.
• The fault is so serious that a reasonable consumer would not have bought the car if they had known about it.
• The car is substantially unfit for normal use and cannot easily be fixed within a reasonable time.

Examples that may be argued as major failures include an engine failing soon after purchase, a complete gearbox failure, unsafe brakes, a car that was previously written off without disclosure, or an odometer that was wound back.

If the fault is not major — for example, a minor electrical fault, a worn component that can be repaired, or cosmetic damage — the law generally allows the dealer to repair it within a reasonable time at no cost to the consumer.

What to Do Before You Send the Letter

It helps to gather your evidence:

• The sale contract or receipt showing the purchase date, price, and any representations the dealer made.
• Any advertisement, listing or email where the dealer described the car.
• Photos or video of the fault or damage.
• A mechanic’s report or inspection report setting out the faults, the cause, and the cost to repair. This is not required, but it can strengthen your case.
• Records of your attempts to contact the dealer: emails, text messages, notes of phone calls.

If the dealer has already refused to help, ignored you, or offered a solution you don’t accept, a formal letter is a common next step.

What the Demand Letter Contains

Claim Done’s demand letter is drafted from your answers. It contains:

• The purchase details: date, price, make, model, VIN, odometer reading.
• A clear description of each fault, when it appeared, and the effect on the car’s safety or usability.
• Any representations the dealer made that you say turned out to be false.
• The consumer guarantees under the Australian Consumer Law that you say have been breached.
• Whether you say the failure is major or minor, and the test that applies.
• Your request: a refund, a replacement car of similar value, or repair at the dealer’s cost within a fixed deadline.
• A deadline for the dealer to respond, which you can set in the letter.
• The next steps you may take if the dealer does not respond: a complaint to your state motor vehicle regulator, a tribunal claim, or both.

The letter is professional, direct, and commercially firm. It sets out the facts, the law, and what you want.

The Deadline and What Happens Next

Most states require dealers to be licensed and to follow a code of conduct. If you believe a dealer has breached the Australian Consumer Law or the code, you can complain to your state regulator:

• New South Wales: NSW Fair Trading
• Victoria: Consumer Affairs Victoria
• Queensland: Office of Fair Trading Queensland
• Western Australia: Consumer Protection WA
• South Australia: Consumer and Business Services
• Tasmania: Consumer Affairs Tasmania
• Australian Capital Territory: Access Canberra
• Northern Territory: Consumer Affairs NT

A regulator may investigate, issue a warning, or take enforcement action. In some states, the regulator may also help mediate the dispute.

If the dealer still refuses, you may be able to lodge a claim in your state tribunal (VCAT, QCAT, NCAT, etc.) or the local court for the purchase price, repair costs, or compensation. Filing fees are set by each tribunal or court, so check the current fee on its website. Parties can generally represent themselves.

Free vs Paid: Can You Write the Letter Yourself?

You can write your own letter. You would need to:

• Set out the purchase details and the faults clearly and in order.
• Identify which consumer guarantees you say have been breached and refer to the relevant provisions of the Australian Consumer Law.
• Explain why you say the failure is major (if you say it is).
• State your remedy clearly: refund, replacement or repair.
• Give the dealer a reasonable deadline.
• Keep the tone professional and factual, not emotional or threatening.

The risk is that a poorly worded letter can weaken your position. If the law is misstated, a claim is overstated, or the dealer is not given a fair opportunity to respond, the dealer (or their lawyer) may dismiss it.

Claim Done’s letter is built around the legislation. It uses clear legal language, refers to the relevant provisions, and sets out your position in a way a tribunal or regulator will recognise. For $49, you get a structured letter without having to work out the layout and wording yourself. Claim Done is not a law firm and this page is general information, not legal advice.

What If the Dealer Sold You a Statutory Write-Off?

A car that was previously written off — recorded as a statutory write-off or a repairable write-off — raises separate issues if the dealer did not tell you about it in writing before the sale.

The rules about selling written-off vehicles differ between states, and disclosure obligations may apply. Selling a repairable write-off without written disclosure may also breach the motor vehicle dealer laws and the Australian Consumer Law, depending on the circumstances.

If this applies to you, your demand letter can include this issue as part of your request for a refund. You can also report the dealer to your state regulator, which decides whether to take action.

What About the Dealer’s Own Warranty?

Many dealers offer a dealer warranty or a statutory warranty (required in some states for certain used cars). That warranty generally sits alongside your consumer guarantee rights, rather than replacing them.

If the dealer’s warranty covers the fault, the dealer may need to fix it under the warranty. If the warranty has expired, or the dealer says the fault is not covered, your consumer guarantee rights may still apply. The consumer guarantees apply for a reasonable time, which depends on factors such as the age, price and condition of the car.

What If You Bought the Car Privately?

If you bought the car from a private seller (not a licensed dealer), the consumer guarantees generally do not apply. Your rights depend on what the seller told you and whether they misled you.

If a seller misrepresented the car’s condition, history or odometer reading, you may have a claim for misleading conduct or misrepresentation. That is a different process, and the letter would be different.

Claim Done’s Used Car Dealer Dispute service is for cars bought from licensed dealers only.

How Claim Done Helps

Claim Done’s Used Car Dealer Dispute — Refund or Repair Demand service drafts your formal letter for $49. You answer plain questions about the car, the dealer, the faults, and what you want. Claim Done drafts the letter, referring to the Australian Consumer Law and your state’s motor vehicle dealer legislation. You read it, approve it, and we email it to the dealer for you (or you can download it and send it yourself).

The letter is written to be taken seriously. It is the document you send before you escalate to the regulator or the tribunal. It can also be attached to a tribunal application or regulator complaint if the dealer does not respond.

Steps After You Send the Letter

Once the dealer receives your letter, you may find that:

• If the dealer agrees to a refund, replacement or repair, it is sensible to get it in writing, and to be cautious about handing back the car or signing anything until the refund is paid or the replacement is delivered.
• If the dealer offers a repair, you may wish to ask for it to be done by a qualified mechanic at the dealer’s cost, with a written guarantee that the repair fixes the fault.
• If the dealer ignores the letter or refuses, you can consider lodging a complaint with your state regulator and a tribunal claim.
• Keep all records: the letter, the dealer’s response (or lack of response), repair quotes, and any further evidence.

Start Your Demand Letter Now

Bought a faulty car from a dealer and the dealer won’t help? Get your formal refund or repair demand letter drafted now for $49.

Start your Used Car Dealer Dispute demand letter →

Frequently Asked Questions

How long do I have to demand a refund for a faulty car?

The Australian Consumer Law ties the right to reject goods to what is a reasonable time in the circumstances, and separate time limits may apply to legal proceedings in your state. Because it depends on the circumstances, the sooner you raise a fault with the dealer in writing, the stronger your position is likely to be.

Can a dealer refuse a refund if I signed an 'as is' contract?

An ‘as is’ clause does not automatically remove consumer guarantee rights, because the Australian Consumer Law generally limits a business’s ability to exclude them by contract. Whether you are entitled to a refund, replacement or repair depends on the fault and the circumstances, for example whether the car has a major failure or does not match the description.

What if the dealer says the fault is wear and tear?

A fault that appears shortly after purchase may be harder to explain as normal wear and tear. A car is expected to be durable and fit for purpose for a reasonable time. If a major component fails soon after purchase, you can raise the acceptable quality guarantee in your letter. Whether it applies depends on the facts, including the age and price of the car.

Do I need a mechanic's report before I send the letter?

A mechanic’s report is not required, but it can strengthen your case. It provides independent evidence of the fault, the cause, and the repair cost. If the dealer disputes the fault, the report can be useful evidence for a tribunal claim or regulator complaint.

What if the dealer offers a repair instead of a refund?

Under the Australian Consumer Law, the remedy available depends on whether the fault is a major failure. Where the fault is a major failure, a consumer may be able to choose between a refund and a replacement. Where it is not major, the dealer is generally allowed to repair it within a reasonable time. If the repair is not made within a reasonable time, or the repair fails, your options may change, so keep records of every attempt.