Lemon Laws South Australia: Faulty Car Refund or Replacement (2026)

Claim Done is not a law firm and does not give legal advice. This page is general information about the law as at 19 October 2026.

Your rights in 60 seconds

• Two laws, not one. The Australian Consumer Law (ACL) is federal and covers new and used cars from any dealer in Australia. The SA duty to repair is extra protection on top. The SA Act says it is in addition to, and does not derogate from, any other law or civil remedy (Second-hand Vehicle Dealers Act 1995 s 5).
• Major failure: your choice. You can reject the car and choose a full refund or a replacement (ACL ss 259(3), 263(4)).
• Minor failure: repair first. The dealer must fix it within a reasonable time, or you can have it fixed elsewhere and claim the cost, or reject the car (ACL s 259(2)).
• SA duty to repair. Over $6,000: 3 months or 5,000 km. $3,001 to $6,000: 2 months or 3,000 km. Even a cheaper, older or high-kilometre car must be roadworthy and safe when you take it (s 23).
• Cooling-off: two clear business days to cancel a dealer used-car contract in writing, unless you have taken the car or signed the official waiver (s 18B).
• A compensation fund may pay if a licensed dealer cannot.
• The forum is a court: the Magistrates Court of South Australia. For a court order enforcing the duty to repair, you first apply to Consumer and Business Services for a conciliation conference.

Which state’s law applies to you

It is the state where the dealer is located that matters, not where you live. The dealer’s state decides which state dealer warranty applies, which regulator handles your complaint, and which tribunal or court hears your claim. If you bought from a dealer in Adelaide, Mount Gambier, Whyalla or anywhere else in SA, this page is for you, even if you live in Broken Hill or Perth.

If you live in SA but bought from a dealer in another state, online or in person, use that state’s page, such as Victoria, NSW or Western Australia, or start at the lemon laws Australia guide.

The interstate rule. In some states car disputes go to a tribunal that is not a court. Under Burns v Corbett [2018] HCA 15 such a tribunal cannot decide a dispute between an individual or sole-trader dealer and a buyer who lives in a different state; in New South Wales and Victoria the claim then goes to a court. Companies and territory residents are not affected. Queensland’s QCAT currently hears these disputes, because the Queensland Court of Appeal has held it is a court (Owen v Menzies [2012] QCA 170), although two appeals challenging that are pending. In SA the problem does not arise: the forum is already a court, so it can hear your claim whether you live in SA or interstate.

Your rights under the Australian Consumer Law

The ACL is Schedule 2 to the Competition and Consumer Act 2010 (Cth). Cars, new or second-hand, are “goods” under it (ACL s 2(1)). You are a “consumer” if the car cost not more than $100,000, or if it is the kind of vehicle ordinarily bought for personal or household use, which covers the family car even above that price (ACL s 3(1); Competition and Consumer Regulations 2010 reg 77A).

Acceptable quality (s 54)

The dealer guarantees the car is fit for all the purposes cars like it are commonly used for, acceptable in appearance and finish, free from defects, safe and durable. The test is what a reasonable consumer, fully aware of the car’s condition including hidden defects, would accept, having regard to the nature of the car (such as its age and kilometres), the price, any statements on labels, anything the dealer or manufacturer told you, and any other relevant circumstances. An old, cheap car need not be perfect, but it must be safe and do what a car of its age and price should. The guarantee does not cover a fault the dealer specifically pointed out before you agreed to buy, or one your own examination before buying ought reasonably to have revealed (s 54(4)-(7)).

The car must also match its description, such as the model, year and kilometres advertised (s 56), and be fit for any purpose you told the dealer about, such as towing a particular boat (s 55).

What is a major failure (s 260)

A failure is major if any one of these applies:

• a reasonable consumer who knew about the problem would not have bought the car;
• the car is significantly different from its description, sample or demonstration model;
• it 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; or
• it is unsafe.

Several minor faults can add up to a major failure. For contracts made on or after 18 December 2020, two or more failures count as a major failure if a reasonable consumer who knew about all of them, taken together, would not have bought the car (s 260(2)-(3)). The ACCC’s industry guide gives examples such as a car immobile within 60 days and not repaired within a reasonable number of days, and an engine seizure not repaired within five weeks.

Refund or replacement is your choice

For a major failure you can reject the car, and the dealer must act “in accordance with an election made by the consumer”: refund what you paid, including the value of any trade-in, or replace the car with one of the same type and similar value if one is reasonably available (ss 259(3), 263(4)). A credit note is not a refund (s 263(5)). The ACCC says a refund for a major problem should be the full amount you paid (ACL s 263(4)). If the car cannot be driven, or returning it would cost you significantly, the dealer must collect it at its own expense (s 263(3)).

For a minor failure the dealer chooses whether to repair, replace or refund (s 261).

How long you have to reject (s 262)

There is no fixed number of days or kilometres. You must reject within the period in which it would be reasonable to expect the fault to show up, having regard to the type of car, its likely use, how long it should last and how much use it should take before such a fault appears. The ACCC’s guide says the warranty period can end before the rejection period ends, so your ACL rights can run past the SA duty to repair. Act promptly anyway.

Extra costs, “sold as is” and the manufacturer

• You can claim damages for reasonably foreseeable loss, such as towing, inspection reports, hire cars, and registration or insurance wasted while the car sat broken (s 259(4)).
• A term that tries to exclude the guarantees is void (s 64). Writing “as is” on the contract is not enough; only faults specifically drawn to your attention are excluded.
• The ACCC says the dealer “must not tell the consumer to go to the manufacturer for a remedy”. The dealer can recover its costs from the manufacturer (s 274). You can also sue the manufacturer, but only for damages, not a refund or replacement (ss 271-272).
• Misleading you about your rights can breach s 29(1)(m), which carries civil penalties.

If the car is on finance

• If the dealer arranged the loan with a lender it regularly works with (a “linked credit provider”), the lender and dealer can be jointly liable for your loss when the car fails a consumer guarantee (ACL s 278), with the lender’s share capped at the amount financed plus interest and costs (s 281).
• If you validly reject the car and the sale ends, you can terminate a tied loan with a linked lender and recover interest you paid under it (National Credit Code s 135). If you cancel in the SA cooling-off period, a linked credit contract is void (s 18B).
• The ACCC warns against stopping repayments while a minor fault is fixed. If you cannot pay, give the lender a hardship notice, orally or in writing (National Credit Code s 72); a refusal must name the Australian Financial Complaints Authority (AFCA).

The SA dealer’s duty to repair

Under section 23 of the Second-hand Vehicle Dealers Act 1995 (SA), a dealer who sells a second-hand vehicle must repair any defect that is present in it or appears after the sale, to accepted trade standards. A “defect” is one that makes the car non-compliant with the Road Traffic Act 1961, stops it being driven safely or at all, leaves a part not in proper working condition, or that you would not reasonably expect given the car’s apparent condition and what the dealer said about it before the sale (s 23(10)). The rules were updated from 1 September 2025 with the Second-hand Vehicle Dealers Regulations 2025.

Some government summaries say the duty does not cover “commercial vehicles” or anything bought at auction. The Act is narrower: the regulations exempt vehicles over 3,000 kg unladen and agricultural or industrial vehicles, and only auctions for a non-dealer are excluded. Exactly 200,000 km is still covered.

Getting the car repaired

Deliver the car during ordinary business hours to the repair place named in your contract or any of the dealer’s business premises, and give the dealer a reasonable opportunity to repair it (s 24(1)). If it cannot be driven safely, or without risk of damage, and delivery would be unreasonable, give the dealer proper notice and a chance to nominate another place; you can then have it repaired elsewhere and claim the reasonable cost (s 24(9)).

What the dealer can lawfully exclude

• Form 17 “Notice of defects” (from 1 September 2025). No duty for a pre-sale defect only if it does not, and could not reasonably be expected to, affect safe driving, the dealer names it on Form 17 with a statement that there is no duty to repair it, and you acknowledge it on the form before signing the contract (s 23A). Safety defects cannot be excluded this way.
• Non-original accessories and left-hand-drive conversion, if the dealer says so in the window notice (Regulations reg 24(1)(a)).

Electric and hybrid cars, demonstrators and paperwork

From 1 September 2025, for a prescribed electric or hybrid vehicle, repairing a battery defect means replacing the battery (s 3(2)); there is no duty for a battery of 12 volts or less that does not drive the car (Regulations reg 24(1)(a), Sch 3 Part 3). A “second-hand vehicle” includes a car used for demonstration, so ex-demonstrators get the duty to repair (s 3(1)). The window notice (Form 1) must say whether the dealer is liable to repair and whether the car was ever recorded as wrecked, written off or water damaged (ss 16-18).

Cooling-off in South Australia

• Who: a buyer who is a natural person, on a second-hand vehicle bought from a dealer (s 18B).
• How long: until the end of the second clear business day after the contract is made. Saturday counts; Sundays and public holidays do not.
• How: written notice given personally, by registered post, left at the dealer’s address for service, or emailed to an address the dealer gave you.
• Money: the dealer can take a deposit of no more than 10% during cooling-off. On cancellation it must refund everything less the lesser of 2% of the price or $100, by the end of the next clear business day.
• Ends early if you take possession of the car, according to the prescribed contract.
• Waiver only on the prescribed form signed before a witness who is not the dealer or a salesperson involved.
• Not available for auction sales or sales negotiated by an auctioneer straight after an auction.

Compensation fund: the Second-hand Vehicles Compensation Fund

The Commissioner for Consumer Affairs administers a fund for a person with an “unsatisfied claim against the dealer arising out of or in connection with the transaction” (Schedule 3), including a buyer from a dealer and someone who paid a dealer under a contract cancelled in cooling-off. The dealer must have been licensed, or you reasonably believed it was. The Commissioner may pay if satisfied the claim is valid and you have no reasonable prospect of recovering it otherwise. Things not directly related to the vehicle, such as travel, are excluded. The government’s examples: a court award against a bankrupt dealer, a company in liquidation with a warranty claim outstanding, or a deceased dealer.

Claim with the online claim against second-hand vehicle dealer form. The fee is $150.00, refundable in part or full depending on success. You or the dealer can appeal the decision to the Magistrates Court within 3 months of notice.

New cars in South Australia

The SA Act covers only second-hand vehicles, including ex-demonstrators. For a new car your protection is the ACL, including a refund or replacement for a major failure, whatever the manufacturer’s warranty says. The ACCC says voluntary warranties “cannot replace, change or take away” your automatic rights. A recall does not replace your ACL rights; check vehiclerecalls.gov.au.

Private sales and auctions

• Private sales: no duty to repair, and the ACCC says most ACL guarantees do not apply. CBS warns a private seller is not legally required to disclose a write-off, and recommends a PPSR check.
• Auctions for a private seller: no duty to repair and no cooling-off. The official Form 13 says that, “As with any private sale”, the duty does not apply.
• Auctions of a dealer’s car: where the auctioneer sells its own car or sells for a dealer, the duty applies: the selling dealer, otherwise the auctioneer, must repair.
• ACL at auctions: most guarantees do not apply to a “sale by auction”; the ACCC’s guide says an eBay sale is not one.

Bought privately? See private sale rights in South Australia

Evidence checklist

1. The signed contract (showing where the car goes for repair) and tax invoice, with the dealer’s name and licence number.
2. The window notice (Form 1), the Form 3 notice, and any Form 17 notice of defects.
3. The advertisement (screenshot it now) and messages about the car’s history or condition.
4. Odometer photos on collection day and when each fault appeared, with dates.
5. The year of first registration.
6. Proof you notified the dealer within the warranty period and when you delivered the car for repair, with a log of every call, email and text.
7. An independent mechanic’s report or quote for each fault.
8. Receipts for towing, inspections, repairs, hire cars and wasted registration or insurance.
9. Any finance contract, your CBS reference, and any agreement recorded at a conciliation conference.

The 5 steps

Step 1: Contact the dealer

Phone the dealer, then email them the same day. Describe each fault, when it appeared, the odometer reading and what you want done. Give them 24 hours to respond, and keep a record of every call and message. In SA this contact is part of keeping your rights: you must notify the dealer within the warranty period and deliver the car for repair within 5 business days after it ends.

Step 2: Send a formal demand

If the dealer does not respond or refuses, send a formal letter of demand. Ours sets out your rights under the Australian Consumer Law and the SA Second-hand Vehicle Dealers Act, lists every defect with dates and kilometres, states your choice of refund, replacement or repair, and sets a deadline.

Send the dealer a formal demand – $49

Step 3: Complain to Consumer and Business Services

If the deadline passes, go to Consumer and Business Services (CBS) with the second-hand car disputes advice form, and attach your demand letter to show you tried. CBS offers voluntary conciliation, generally by phone, and compulsory conciliation conferences for serious or complex matters.

For a duty-to-repair dispute this step is required before court. If the dealer refuses or fails to repair promptly, or refuses to take the car, apply to the Commissioner for a conciliation conference. The Commissioner must convene one unless satisfied it is not appropriate, and the dealer must attend. If the Commissioner declines, the dealer does not attend, the matter is not resolved, or the dealer breaks the agreement, you can then apply to the court for orders to repair, pay reasonable repair costs, compensate your loss, or enforce the agreement (s 24(2)-(5)). You can go straight to court to recover repairs done on the dealer’s behalf, for an undriveable car repaired elsewhere, or against an unlicensed dealer (s 24(8)-(10)). If a licensed dealer cannot pay, the Commissioner also administers the Second-hand Vehicles Compensation Fund (see above).

Step 4: Send the final demand

When CBS gives you a complaint reference number, send the final demand. It quotes your first letter, the dealer’s response (or silence) and the reference number, and gives a final deadline before court. The court says a notice of intention to sue, as a Final Notice or a Letter of Demand, “should be given” first, “Otherwise, the costs of filing the claim will not be recoverable.” The dealer has 21 days to respond, so wait 21 days before filing. The court’s own sealed Final Notice (Form P1) costs $27.75 lodged electronically.

Send the final demand – $49

Step 5: Lodge a court claim

Lodge your claim in the Magistrates Court of South Australia through the CourtSA portal. Duty-to-repair applications go to the Civil (Consumer and Business) Division, which can sit with assessors (ss 3(1), 25), on “Form 1CS Statement of Claim – Second Hand Vehicle Dealers Act” with any agreement recorded by the Commissioner. For ACL claims, minor claims are $12,000 or less, with minimal formality and no lawyers except in special circumstances, and can use a short summary of under 100 words or Form 1S; general claims are $12,001 to $100,000. Ask for the remedy you chose, refund, replacement or repair costs, plus your foreseeable losses.

Prepare your court claim – $97

Where your claim goes

Court fees are as at 1 July 2026. A trial-setting fee applies if the case goes to trial: $260.00 or $783.00 for minor civil claims (the lower for claims not over $4,000) and $981.00 for other proceedings.

After you win: getting paid

Your claim is decided by the Magistrates Court, so a judgment in your favour is already a court order. But the court does not automatically enforce civil judgments: if the dealer does not pay, you start enforcement yourself.

How to start

In CourtSA, go to My Cases, then the Enforcement tab, and request an Investigation Summons (Form 143) or an Examination Summons (Form 146). Under the court rules, an investigation summons or a warrant of sale is applied for with Form 141 (Application to Enforce Judgment). The service fee and lodgement fee are added to the judgment automatically.

Investigating the debtor’s finances

The court can issue an investigation notice (Form 140), which gives the debtor at least 28 days to comply. An investigation summons must be served personally. If the debtor does not appear, the court may issue a warrant for their arrest.

One rule to know: if the debtor is an individual, the judgment is $12,000 or less, and the debt did not arise from the debtor carrying on a business, no other enforcement can usually be issued until a payment order is made at an investigation hearing or the debtor fails to appear after being served with an investigation summons.

Garnishee order (bank account and wages)

The court can order that money owed to the debtor by someone else, or held for them, including money in a bank account, is paid to you instead. You apply with an interlocutory application, an affidavit and a draft Form 148 Interim Garnishee Order, and the application can be made without notice to the debtor. The bank or employer pays you directly, and one that does not comply becomes personally liable.

Wages can be garnished too. The total taken cannot reduce the debtor’s net weekly wage below 90% of the weekly national minimum wage, and the court looks at the debtor’s means, living expenses and other debts. An employer who sacks or disadvantages a worker because of the order commits an offence. Social security payments cannot be taken.

Warrant of sale (property)

A warrant of sale (Form 163) lets the sheriff seize and sell the debtor’s real or personal property, except personal property that could not be taken in a bankruptcy.

Enforce your order – $97

Questions people ask

Is there a lemon law in South Australia?

No, SA has no separate law called a lemon law. A faulty car from a dealer is covered by the Australian Consumer Law, which gives you a refund or replacement for a major failure, plus the dealer’s duty to repair in the Second-hand Vehicle Dealers Act 1995 for many used cars. The state duty adds to the ACL.

Can I return a used car to a dealer in SA?

Yes, if the car has a major failure you can reject it within a reasonable time and choose a refund or a replacement under the Australian Consumer Law. For a minor fault the dealer can repair it first. You can also cancel within two clear business days under cooling-off, unless you have taken the car or signed a waiver.

What is a major failure for a car?

A major failure is a fault so serious that a reasonable buyer who knew about it would not have bought the car. It also covers a car that is unsafe, significantly different from its description, or substantially unfit and not easily fixed. For contracts from 18 December 2020, several minor faults together can count as one.

Does the Australian Consumer Law apply to second-hand cars?

Yes, the consumer guarantees apply to second-hand cars bought from a dealer, judged against the car’s age, kilometres and price. An older, cheaper car need not be perfect, but it must be safe and reasonably durable for its age. Most guarantees do not apply to private sales or private-seller auctions.

I live in another state – which tribunal do I use?

You use the forum in the dealer’s state, not your own. For an SA dealer that is the Magistrates Court of South Australia, a court, so it can hear your claim even if you live interstate and the dealer is a sole trader. If the dealer is in another state, that state’s rules apply.

How long do I have to reject a faulty car?

There is no fixed number of days. The Australian Consumer Law allows a reasonable time, judged by the type of car, its use, how long it should last and when such a fault would be expected to appear. It can run past the SA duty to repair. Reject in writing as soon as you know the fault is serious.

Can the dealer refuse a refund and only offer repairs?

Not for a major failure. You choose between a refund and a replacement, and the dealer cannot insist on repairs or a credit note. For a minor failure the dealer may repair, but if it refuses or takes too long, you can have it repaired elsewhere and claim the cost, or reject the car.

What does it cost to go to the Magistrates Court of SA?

Filing costs $186.00 for a $5,000 minor civil claim and $522.00 for a $30,000 general claim, as at 1 July 2026. The court’s own Final Notice costs $27.75 lodged electronically, and trial-setting fees apply later if the case goes to trial. A CBS conciliation conference has no fee stated in the Act.

What if the car was on finance?

If the dealer arranged the loan through a lender it regularly works with, the lender can be jointly liable with the dealer for your loss, up to the amount financed plus interest and costs. If you validly reject the car and the sale ends, you can terminate that linked loan. Keep paying while the dispute runs.

Can I get my money if I win and the dealer still won’t pay?

You may be able to claim from the Second-hand Vehicles Compensation Fund if the dealer was licensed and you have no reasonable prospect of recovering the money otherwise. The government’s examples include a court award against a bankrupt dealer. The application fee is $150.00, refundable in part or full depending on success.

Is there a cooling-off period for used cars in SA?

Yes, a natural-person buyer of a used car from a dealer can cancel in writing until the end of the second clear business day after the contract. Saturday counts; Sundays and public holidays do not. Taking the car ends it early, and the dealer can keep the lesser of 2% of the price or $100.

How long is the used car warranty in SA?

It is 3 months or 5,000 km, whichever comes first, for a car sold for over $6,000, and 2 months or 3,000 km from $3,001 to $6,000. Cars sold for $3,000 or less, first registered over 15 years before the sale year, and cars over 200,000 km get no duty for later faults but must be roadworthy when sold.

Sources

• Second-hand Vehicle Dealers Act 1995 (SA) (ss 3, 5, 15-18C, 23-25, 33, Schedule 3), checked 19 October 2026
• Second-hand Vehicle Dealers Regulations 2025 (SA) (regs 3, 4, 24-27, Forms 1, 3, 5, 13, 17), checked 19 October 2026
• Australian Consumer Law (Competition and Consumer Act 2010, Schedule 2), checked 19 October 2026
• Competition and Consumer Regulations 2010, reg 77A, checked 19 October 2026
• National Credit Code (National Consumer Credit Protection Act 2009, Schedule 1), checked 19 October 2026
• CBS: Buying a used car, checked 19 October 2026
• CBS: Contact CBS, checked 19 October 2026
• sa.gov.au: Disputes about a second-hand car, checked 19 October 2026
• sa.gov.au: Second-hand vehicle dealer compensation fund, checked 19 October 2026
• CourtSA: Starting a civil case, checked 19 October 2026
• CourtSA: Before making a claim, checked 19 October 2026
• Magistrates Court of SA: Civil fees, checked 19 October 2026
• ACCC: New and second-hand cars, checked 19 October 2026
• ACCC: Motor vehicle sales and repairs industry guide, checked 19 October 2026

Prepared by the Claim Done content team. See also: bought a used car from a dealer and it’s faulty: what now?