Cooling Off Period For Car Purchases

All you need to know about cooling off periods when buying a car

A car loan cooling-off period is a legal provision designed to protect consumers who have entered into a car loan agreement. During this designated period, which typically ranges from a few days to a couple of weeks, depending on local regulations and the lender’s policies, borrowers have the right to change their minds and cancel the loan without incurring any financial penalties or consequences. This cooling-off period allows borrowers to carefully review the terms and conditions of the loan, seek advice if needed, and reconsider their decision if they feel it’s not in their best interest. It’s a valuable consumer protection mechanism that promotes informed and responsible borrowing, ensuring that individuals have the opportunity to make well-informed financial choices when financing a vehicle. Borrowers should always be aware of the specific cooling-off period associated with their car loan and use it wisely if necessary to make sure the loan aligns with their financial goals and needs.

Cooling off periods for each state

NSW

In New South Wales, Australia, the car loan cooling-off period  typically spans a 2-day period after signing the car loan contract. During this time, consumers have the opportunity to carefully review the terms of the agreement, seek advice, or reconsider their decision. It's essential for consumers in NSW to be aware of this cooling-off period and exercise their rights if needed to ensure they make informed financial choices when obtaining a car loan. 

QLD

In Queensland, Australia, the car loan cooling-off period is a legal safeguard for consumers who have entered into a car loan agreement. This period typically spans five business days. During this time, borrowers have the right to reconsider their car loan contract and, if they wish, cancel it without incurring any financial penalties or obligations. This allows borrowers to review the loan terms, seek advice, and ensure that the financing arrangement aligns with their financial circumstances and needs.

VIC

In Victoria, Australia, the car loan cooling-off period typically extends for three business days(excluding weekends and public holidays). During this time, borrowers have the right to reconsider their car loan contract and, if they wish, cancel it without facing any financial penalties or obligations. This period allows borrowers to carefully review the loan terms, seek advice, and ensure that the financing arrangement suits their financial situation and needs.

NT

In the Northern Territory (NT), there isn't a cooling-off period for vehicle purchases, which implies that once you've committed to a contract to buy a vehicle, you cannot alter your decision. Once you've affixed your signature to the contract, it becomes legally binding, necessitating your adherence to the purchase as mandated by the law. Prior to signing, it's crucial to thoroughly comprehend the terms and conditions and, if necessary, eliminate any contract clauses with which you disagree. If you're merely exploring options or contemplating a purchase, it's important to note that there's no paperwork involved in that initial phase.

SA

The cooling-off provision in South Australia also encompasses the acquisition of used vehicles from a dealership, which extends to demonstration vehicles as well. Customers are afforded a two-business-day window to deliberate on their decision to purchase a pre-owned vehicle from a second-hand vehicle dealer. Before the cooling-off period concludes, a buyer has the option to cancel the sales contract by submitting written notice to the dealer. This period may also encompass weekends, contingent upon the dealership's operating hours. Furthermore, purchasers have the choice to relinquish their cooling-off rights by signing a waiver document, which can be beneficial for those who require immediate possession of the vehicle and are willing to forego their cooling-off privileges.

WA

In Western Australia, there is no cooling-off period applicable to car purchase agreements. You have the freedom to withdraw from the transaction before formally signing the contract without incurring any penalties. However, if you find the need to cancel the contract post-signing, the dealer may request compensation in the form of 'pre-estimated liquidated damages' to cover any losses incurred due to the cancellation. It's important to note that in Western Australia, these damages are limited to a maximum of five percent of the total purchase price of the vehicle.

 

TAS

Tasmania does not provide for a "cooling-off" period, which implies that once you commit to purchasing a car, you have no designated timeframe to reconsider the decision if you find the vehicle too costly or unsuitable. It's crucial to exercise caution and refrain from signing any contracts or making deposits until you are absolutely certain about your intent to purchase the car. In Tasmania, the sole means of canceling a sales contract involves reaching an agreement with the car seller or obtaining a court order; there is no automatic right to cancellation.

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