Cooling-off for New Car Purchase

According to Consumers Affairs Victoria:

What does cooling off mean?
Cooling-off periods apply to cars and motorbikes bought from licensed motor car traders.

You have three business days (excluding weekends and public holidays) after you sign a contract to change your mind. This is your cooling-off period. However, if you choose to accept delivery of the vehicle during this three-day period, you will automatically lose your right to cool off.

Licensed motor car traders are required to include a prescribed information box in the contract of sale for each vehicle they sell, that sets out information about the cooling-off process.

A licensed motor car trader is not obliged to order a vehicle from the manufacturer before the cooling-off period expires. You should therefore clarify with the licensed motor car trader when you can expect to receive it.

Changing your mind
If you change your mind and terminate the sale agreement, you must do so in writing within the cooling-off period, and the licensed motor car trader may keep $400 or two per cent of the purchase price (whichever is greater).

It seems that the regulation is totally in the favour of the car dealers. How can it even be called "cooling off"?

How does everyone feel about it?

/WT

Comments

  • how is it totally?

    losing $400 for wasting everyones time?

  • Is there a type of product that normally has legal cooling off periods applied to it? Or it is because you buy cars on 'contract' (registering ownership etc)?

    I wouldn't really expect there to be a legally enforced 'change of mind' period for car purchases.

    Edit: Although I do sometimes feel the allowances for 'excluded information' on used cars is a bit lenient

    • A few day's ago, a friend of mine was asked to pay a desposit of $400 for the car she was going to purchase. With that, she signed a contract without reading too much into the details. Then she found a better deal the next day which was $1000 less. She willingly paid the $400 cancellation fee to the first dealer but was treated badly and rudely. That's the reason I started looking into it at Consumers Affairs. Indeed they did it within the law.

      My layman's understanding of "cooling off" is to cancel a contract without incurring any panelty. I found Google's definition as below:

      • a period of time after a sale contract is agreed during which the buyer can cancel the contract without incurring a penalty.

      I think the cooling off period is needed to protect consumers who often have to face hard sales from car dealers and real estate agents. In this case, I feel that the term "cooling off" is misused and misleading.

      • Always always always read any document you sign. If you cant be bothered reading the document then you should not complain.

        • That's true.

          But I just feel that the words used are not what the common understanding is. I am pretty sure you won't be penalized if you change your mind within the coolong off period of buying a house.

          • @whytea: You need to read up on house contracts before you sign anything as the standard contacts I have seen have a similar clause.

      • Sure seems like that's your friends fault.

      • The contract is an agreement to purchase the car in exchange for the purchase price e.g. $20,000.

        When you sign it, you commit to this deal.

        The cooling-off period gives you a chance to back out of the deal even though you've already committed to it, with only a minor financial penalty.

        That seems like 'cooling-off' to me.

        If there was no penalty, there would be no point in actually signing anything. You could go around to dealers signing contracts all day and cancelling them!

  • You can always make changes to the contract you sign when you buy the car to modify this area if the dealer is okay with it.

  • In QLD there is no cooling off period for new cars, only used and demonstrators.

  • It seems that the regulation is totally in the favour of the car dealers. How can it even be called "cooling off"?

    How so? They have to offer a cooling off period. 2%/$400 is a fair fee to pay considering you wasted their time. They have the car off the market for 3 days, lose other potential buyers who may have paid more and had to remove it from advertising and spent time fielding queries and filing paperwork for the sale.

    If you were selling your car and someone left you a deposit and you got your car cleaned and checked over and did all of their paperwork for them and removed any paid advertising you had, would you give their whole deposit back if they came back 3 days later? Or would you keep some it to cover your costs?

    I am sure that had your friend contacted them about the other vehicle being a better deal and said she wanted to cancel the contract, the current dealer would have been willing to renegotiate the deal and she could possibly have been $1,000 in front. Instead, she went with the second car dealer and lost $400 in the transaction. So the other car only ended up being $600 better in price.

    • That's not quite comparing apple to apple….

      The consumer law says:
      - A licensed motor car trader is not obliged to order a vehicle from the manufacturer before the cooling-off period expires. You should therefore clarify with the licensed motor car trader when you can expect to receive it.

      Looking at it as an outsider in this case, I am just not feeling it's right to call it a "cooling off period".

      • So, what you are suggesting is that the dealer, who sold you the car in good faith, should bear the brunt of your buyers remorse?

        And you are basing your whole experience off a Google definition. There are plenty of other dictionary definitions online that don’t mention “without penalty”, so you are cherry picking your definition to suit your narrative. Google definitions are not the overriding legal definition. What is, is what is listed in the contract or what is listed on the Victorian Fair Trading website…

        And I have been on both sides of this type of transaction, so I have a lot of experience from both sides of the fence, it is absolutely right to call it a cooling off period.

        • OK. That explains it.

          Note, I'm not saying who is right or wrong. I just don't think the wordings are right.

  • I don't see why anyone would sign a contract without the intent on going through with it.

  • Did you find out that roof racks couldn't be fitted?

  • Well isn't it good that in WA, car sales contracts don't have a cooling off period 😉

    Coz last I checked, adults generally are aware that they're signing a contract and the repercussions of it.

    How would she feel if the dealer turned around and cancelled the contract because someone else was prepared to pay more? They're in their rights to do so…

  • The cooling off penalty payment is also a disincentive to changing your mind without considering the cost involved.

    • I think it should work both ways. Very often a buyer is rushed into making a decision.

      • Hahahaha what?!?

      • +1 vote

        You as a buyer, you already had plenty of time to decide before visiting a car dealership. No one forced you to buy, if you do impulse buy a car then you have to deal with your own decision.

        People already complain enough about government being a Nanny state…

  • I find during these pandemic times, most salesperson are very sensitive and emo, thus thread with care as things easily flare up.

  • Not it isn't… you have options of fully informing yourself, of test drives/rides, all b4 even contemplating a purchase. Dealers do a lot of work ordering in your new toy…. you can't walk around dealerships and say yes…yes…and yes…. to various cars/bikes.
    3 days is ample time.

  • “Your friend” is the reason why car cooling off clauses have a small penalty in place. Otherwise every Tom, Dick and Harry will waste time negotiating a deal only to pull out the next day if they find a better deal

    • Haha, "my friend" is actually my friend. I know what you were thinking :)

      To be fair, the time wasting is for both parties.

      I think the pressure and hard selling of the car dealers could actually push the buyers to sign up. I would really like to hear from people who have been put under such situation before.

      I am aware that at least one of the KIA dealers in Victoria doesn't impose the panelty cancellation. The contract states a 3-day cooling off period with full refund.

      • +2 votes

        I think the pressure and hard selling of the car dealers could actually push the buyers to sign up.

        Ok, that's the reason you asked… the problem behind the said problem.

        I would really like to hear from people who have been put under such situation before.

        Speaking for myself, the pressure you felt is part of the car dealer's game, if you see it as a game, and not let them prey on your emotions (e.g. I'm going to miss out on this wonderful deal, or they'll say I can't give you this price if you don't sign now, that sort of BS), then you are better placed to decide with a more clear head.

        Walk away from a deal, if you haven't shopped around yet. If a dealer does have a best price (after you shopped around), you can go back to them. Transfer your OzBargain KnowHow to buying cars - compare before buying - price match, price beat. Cars are the same.

        It is just a transaction (exchange $ for a product) after all, the dealer may seem all lovely and talk like if s/he is your best friend. Dealer does not see you anymore than an money earner for them.

        • Speaking for myself, the pressure you felt is part of the car dealer's game, if you see it as a game, and not let them prey on your emotions (e.g. I'm going to miss out on this wonderful deal, or they'll say I can't give you this price if you don't sign now, that sort of BS), then you are better placed to decide with a more clear head.

          We all have heard something like that before :) That's why I think it's always good to bring a friend or two along in order to keep a clear head.

          How do you actually deal with the situation when the dealer won't tell you the best price until you commit to buy today??

          Thanks for the good advice.

  • If you found a better deal why not talk to the dealer you signed a contract with and explain and just say you're prepared to lose the $400 and go elsewhere if they aren't willing to match.

    • She actually did. But the dealer then turned rude and agressive when told of a better deal, instead of price matching…