Bought a Lemon Car in New South Wales? How to Get a Refund Through NCAT

If a car you bought from a dealer in New South Wales has a major fault, the Australian Consumer Law lets you reject it and choose a refund or a replacement. Start with a written demand to the dealer; if the dealer refuses, the claim goes to NCAT, which hears motor vehicle consumer claims against dealers up to $100,000. The application fee starts at $64 for a claim up to $10,000, as at 1 July 2026.

For the forms, fees and each step, see our guide to making an NCAT application.

This guide covers your consumer guarantee rights, the steps before you apply, and where and how to make the claim in New South Wales.

What does the Australian Consumer Law guarantee when you buy from a dealer?

A car bought from a business comes with automatic consumer guarantees under the Australian Consumer Law. The main ones for a car are that it must:

• Be of acceptable quality: safe, durable and free from defects, allowing for its age, price and condition (s 54)
• Be fit for any purpose you told the dealer about, such as towing (s 55)
• Match its description, for example “one owner” or “full service history” (s 56)

A dealer cannot contract out of these guarantees with a “sold as is” or “no warranty” term. They are in addition to any manufacturer’s or statutory warranty. The guarantees do not generally cover private sales.

When can you ask for a refund instead of a repair?

If the failure is major, you can reject the car and choose a refund or a replacement. A failure is major where, for example:

• you would not have bought the car if you had known about the problem
• the car is unsafe
• the car is significantly different from its description
• the car is substantially unfit for its normal purpose, or for a purpose you told the dealer about, and cannot easily be fixed within a reasonable time

If the failure is not major, the dealer can choose to repair it within a reasonable time. If it refuses or takes too long, you can have it repaired elsewhere and claim the reasonable cost, or in some cases reject the car. Act promptly: the right to reject can be lost if you wait too long.

Step 1: Get an independent inspection

Have an independent mechanic, not the dealer’s, inspect the car and write down each fault, its likely cause and whether it was probably present when you bought it. This report is usually your most important evidence.

Step 2: Put your demand in writing

Write to the dealer asking for a refund, replacement or repair, citing the consumer guarantees, attaching the mechanic’s report and giving a clear deadline, such as 14 days. Keep a copy and proof of when it was sent. Some disputes end there; if not, the letter shows the tribunal or court that you gave the dealer a fair chance.

Step 3: Complain to NSW Fair Trading

NSW Fair Trading takes complaints about car dealers in New South Wales and may be able to help resolve the dispute without a hearing.

Some used cars bought from licensed dealers also carry a statutory warranty under state or territory law. NSW Fair Trading can tell you whether one applies to your car.

Step 4: Where do you make a claim in New South Wales?

NCAT hears motor vehicle consumer claims in its Consumer and Commercial Division. The claim must be against a supplier carrying on a business, not a private person, and you must apply within 3 years of when the problem began, for a vehicle supplied within the last 10 years (NCAT: motor vehicles, last updated 19 June 2026). NCAT hears consumer claims up to $100,000.

Application fees as at 1 July 2026 (NCAT: fees):

Motor vehicle applications are first listed for conciliation and hearing, so be ready to present your evidence on the first date. A case not resolved then may be listed for a contested hearing later.

Bring the purchase contract, the advertisement, the mechanic’s report, your letter of demand and proof it was sent, and all messages with the dealer, organised in date order.

Do you need a lawyer?

In the Consumer and Commercial Division a lawyer or agent needs NCAT’s permission (leave) to represent you; most people represent themselves.

What if you bought the car privately?

The consumer guarantees generally do not apply to a private sale. If a private seller told you something about the car that was untrue, a letter of demand setting out what was said and what was wrong is the usual first step.

How Claim Done helps

Claim Done’s Letter of Demand ($49) is drafted from your answers about the car, the faults and the dealer, and cites the Australian Consumer Law. You approve it before it is sent.

If the dealer does not put things right, the Tribunal Application ($97) drafts your NCAT claim from your answers and documents, ready for you to review and lodge yourself. Claim Done is not a law firm and does not lodge, file or serve documents for you.

Frequently asked questions

Where do I take a lemon car claim in New South Wales?

To NCAT, which hears motor vehicle consumer claims against dealers up to $100,000. Send the dealer a written demand first.

How much does it cost to apply?

The application fee starts at $64 for a claim up to $10,000, as at 1 July 2026, and rises with the amount claimed. See the fee table above.

Can the dealer insist on repairing a major fault?

No. For a major failure you choose between a refund and a replacement. For a failure that is not major, the dealer can choose to repair it within a reasonable time.

Does “sold as is” mean I have no rights?

Not when you buy from a dealer. The consumer guarantees apply by law and cannot be excluded by the contract.

Dealer still refusing? Start your claim — $97.

Fees and forum facts checked against NCAT’s motor vehicles, fees and consumer claims pages on 27 September 2026. Consumer guarantee sections refer to the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010). Claim Done is not a law firm and does not lodge, file or serve documents for you.