Bought a Lemon From a Dealer? Your Refund, Replace or Repair Rights
Updated 26 June 2026 · FairClaim Guides
A car bought from a dealer or business is not “sold as is.” It comes with consumer guarantees under the Australian Consumer Law (ACL) — including that it is of acceptable quality for its age, price and kilometres. If your car keeps failing and the dealer won’t properly fix, refund or replace it, you can take the matter to your state consumer affairs body and tribunal (in Victoria, Consumer Affairs Victoria and VCAT).
Your consumer guarantees
- Under ACL section 54, the car must be of acceptable quality — safe, durable, and free from defects a reasonable buyer would not expect given its age, price and kilometres.
- For a major failure, you (not the dealer) choose the remedy: a refund or a replacement (ACL ss.259–263).
- Repeated failed repairs can add up to a major failure even if no single fault would.
- These rights generally apply to vehicles bought mainly for personal or household use, or costing under $100,000.
Major vs minor failure
A major failure is one that is serious — unsafe, undriveable, or something a reasonable buyer would not have bought the car knowing about. For a major failure you can demand a refund or replacement. For a minor failure, the dealer can choose to repair it within a reasonable time; if they fail or refuse, your rights escalate.
How to act
- Put the problem to the dealer in writing, describe the faults, and state the remedy you want.
- Keep all evidence: the contract, every fault, repair attempts, invoices, and any independent mechanic’s report.
- If the dealer refuses or obstructs your remedy, apply to your state consumer affairs body or tribunal (e.g. VCAT).
- For a major failure, clearly state whether you want a refund or a replacement.
How FairClaim helps
FairClaim checks your situation against the consumer guarantees, helps you judge whether the failure is major or minor, and drafts a structured complaint or tribunal application. Free to start.
Check your rights and build your complaint — free to start
Answer guided questions or just describe what happened. FairClaim checks your facts against the relevant law and drafts your complaint.
Start your faulty car purchase complaintFrequently asked questions
Can I get a refund on a faulty car from a dealer?
If the fault is a major failure under the Australian Consumer Law, you can choose a refund or a replacement — the dealer cannot insist on only repairing it. For minor failures, the dealer may repair within a reasonable time first.
What is a “major failure”?
A failure that is serious — for example the car is unsafe or undriveable, or it has a problem a reasonable buyer would not have accepted had they known. Repeated failed repairs can also amount to a major failure.
Does this apply if I bought from a private seller?
Consumer guarantees apply to purchases from a dealer or business, not generally to private sales. If you bought from a dealer, you are covered; private sales have far fewer protections.
The dealer says the warranty has expired — does that matter?
Consumer guarantees under the ACL apply independently of any dealer or manufacturer warranty and can last beyond it, depending on the car’s age, price and kilometres. An expired warranty does not extinguish your guarantee rights.
Related guides
This guide is legal information, not legal advice. It describes general rights under Australian consumer credit law and may not account for the specifics of your situation. For advice about your circumstances, contact a community legal centre, the National Debt Helpline (1800 007 007), or a qualified legal practitioner.