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← Legal Guides 13 May 2026

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

A car with a major fault is a "major failure" under the Australian Consumer Law. Here's the exact legal step that triggers a refund, replacement, or compensation.

Australian Consumer Law car dealer lemon law letter of demand refund

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 on professional letterhead

The flat fee

A solicitor charges $400–$1,500 to draft the same letter. Claim Done charges $79. The wizard takes about ten minutes. The letter is drafted, formatted, and sent to the dealer on your behalf.

Most dealers fold within a week. The ones that don’t get a Final Demand ($79), and after that, a tribunal application ($79 plus your state’s filing fee). Every step keeps the same paper trail.

Don't Let Them Off the Hook.

You've read how it works — now have your Letter of Demand drafted, formatted and sent for a flat $79.

Start Letter of Demand — $79 →
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