Bought a Lemon? Demanding a Refund Under the Australian Consumer Law

You bought a car. Within weeks, the engine, transmission, gearbox, electronics or another major component failed. The dealer says it’s “not their problem now”. They’re wrong.

Under the Australian Consumer Law (ACL) — Schedule 2 of the Competition and Consumer Act 2010 — every vehicle sold by a dealer comes with a non-excludable consumer guarantee that it is of acceptable quality. A car with a major defect that wasn’t disclosed at sale almost always breaches that guarantee. The remedy depends on whether it’s a major failure or a minor one.

What counts as a “major failure”

• You wouldn’t have bought the car had you known about the defect
• The car is significantly different from how it was described
• The car is unsafe to drive
• The defect can’t be fixed within a reasonable time, or can’t be fixed at all

If any of those apply, the ACL gives you the right to choose the remedy: a full refund, a replacement vehicle, or compensation for the difference in value. The dealer doesn’t get to pick.

Why a polite email rarely works

Dealers know most consumers won’t escalate. They count on the friction. A direct email or phone call from you usually produces an offer of a “goodwill repair” — at your cost or theirs, but never the refund the law actually entitles you to.

A formal Letter of Demand changes the conversation. It cites the specific ACL provisions, identifies the major failure, names the remedy you’re claiming, and sets a deadline. Dealers respond to letters that look like they came from a lawyer because they know the next step is your state’s civil tribunal — and tribunal decisions go on record.

What Claim Done’s Letter of Demand covers

• The vehicle (make, model, VIN, purchase date, price)
• The specific defects and when they appeared
• Citation of the Australian Consumer Law sections breached
• The remedy you’re entitled to and why
• A clear deadline (typically 14 days)
• The escalation path: your state’s tribunal (NCAT, QCAT, VCAT, SAT, SACAT, ACAT, NTCAT) or the Magistrates Court
• Sent as a PDF

The flat fee

Claim Done charges $49. The wizard takes about ten minutes. The letter is drafted, formatted, and sent to the dealer.

The ones that don’t get a Final Demand ($49), and after that, a tribunal application ($97 plus your state’s filing fee). Every step keeps the same paper trail.

Bought the car on finance? See how to pause your repayments while you demand a refund.