Buying a new vehicle
Before buying a new vehicle, it is important to know your rights and to understand the contract of sale and what is expected of you.
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Before you buy
Buying a new car can be a big financial commitment. Doing the right research can save time and money. It is helpful to:
- set your budget. It is important to have a clear idea of how much you are able to spend on a new vehicle
compare different vehicles and their features. Think about:
fuel efficiency
safety rating
price of maintenance and spare parts
cost of insuring vehicle
consider your needs for the vehicle and the operating costs involved
if you are buying an electric vehicle, take into account any government rebates when planning your budget. Additionally, think about how you might charge the vehicle
always try to test drive a vehicle before you consider buying it
Know your rights
The buying and selling of new cars and other new vehicles in NSW is governed by the Motor Dealers and Repairers Act 2013 (MDRA) and the Australian Consumer Law (ACL). Under each of these laws there are guarantees to protect you.
Dealer guarantees under the Motor Dealers and Repairers Act 2013
If something goes wrong with your new vehicle, you may be entitled to a remedy under the dealer guarantees.
The dealer guarantees includes:
a guarantee the vehicle is free from encumbrances and the buyer will have title of the vehicle
the motor dealer guarantees to cover defects that occur after purchase
a compensation fund to cover loss because the dealer did not meet its obligations and the loss cannot be recovered
The dealer guarantee applies to the following new vehicles:
- new vehicles
- new motorcycles
You can learn more about dealer guarantees and warranties.
Consumer guarantees under the Australian Consumer Law
The ACL also offers protections for consumers buying vehicles from dealers. Most vehicles sold through motor dealerships are covered by consumer guarantees that they must:
be of acceptable quality (including that it is safe)
be fit for any purpose disclosed before the sale
match the description provided or demo model
have spare parts and repair facilities available
title possession and securities guarantee
Consumer guarantees are your automatic rights under the ACL. These cannot be restricted or excluded.
The Australian Competition and Consumer Commission (ACCC) has a fact sheet detailing your consumer rights when purchasing a new vehicle.
Manufacturers and dealers must honour your consumer guarantee rights regardless of any express or implied commercial warranties they give or sell to you.
Electric vehicles
The NSW Government is investing almost half a billion dollars in tax cuts and incentives to drive uptake and reduce barriers for electric vehicle (EV) purchases over the next four years.
Read more about the EV strategy.
There are number of things to consider before buying an electronic vehicle. Here are a few things to think about:
- Do you have a repairer/mechanic with experience in working on electric vehicles who can work on your vehicle?
- Can you charge your vehicle at home? Some strata/apartment buildings may not have the right fittings. You should check with your strata first.
- What rebates are available?
- Where are you nearest charging stations?
New vehicle buyers guide
Information to help you make the right choices when buying a new vehicle.
Please note that a demo car (demonstration car) is not a new vehicle. It is classed as a used vehicle. You can learn more about Buying a used vehicle.
Set your budget
Buying a new vehicle can cost much more than just the purchase price itself.
On top of the cost of the new vehicle, you need to consider:
CTP insurance
maintenance
repairs
yearly registration fees
motor vehicle duty (also called stamp duty)
Negotiating
Once you have decided on your budget and the type of vehicle you would like to buy, you can shop around for the best price.
Prices can vary from dealer to dealer and special offers will happen at different times of the year. Most dealerships will reduce prices just before the next year’s models are delivered. This can be a good time to pick up a good deal on a vehicle.
Ask them to give you their best price quote and any inclusions and to detail their warranty terms.
Compare prices at different dealerships online and in-person. This will give you the best chance of finding a good price.
Remember to stick to your budget.
Loans and contracts
If you are looking to get a loan for your vehicle, read through the finance agreement carefully. Make sure you understand the terms and conditions of the contract, and it contains:
all fees and interest rates
any exit fees or balloon payments, learn more about balloon repayments
repayment rates and due dates for payment
the total amount you will have paid at the end of the loan period
all insurance requirements.
Read more about finance and contracts.
Cooling-off periods
Cooling-off periods apply when you buy a car from a dealership and the dealership:
arranges your loan for the car, or
supplies application forms for, or a referral to, a credit provider
This is called a linked credit arrangement.
Under these arrangements a cooling-off period will give you one business day to change your mind about the purchase.
The cooling-off period starts when you sign the contract and usually ends at 5pm on the next business day.
A Form 12, also called a cooling-off period notice, will form part of the contract if you enter into a dealer-financed arrangement. During this period, you can cancel the contract by giving a signed written notice to the dealer. You will have to pay the dealer $250, or two per cent of the purchase price, whichever is the lesser amount.
You may also choose to waive your cooling-off period.
Before signing a contract
The contract of sale for a motor vehicle is a legally binding document. It is important you read the contract carefully and understand it before you sign.
- Never sign a blank contract or one with any unfilled spaces.
- Make sure all the costs are clearly itemised in the contract.
- Any prejudicial terms are disclosed to you by the motor dealer, for example, balloon payments, exit fees, finder’s fees, and any terms that exclude the liability of the dealer.
To know when you get your car, make sure the delivery date is stated.
The contract should state a deadline by which you no longer want to proceed with the purchase if the dealer is unable to provide a delivery date.
Paying a deposit
When you sign a contract of sale with a licensed motor vehicle dealer, it is common practice for them to take a holding deposit for the vehicle. The deposit amount may vary.
Make sure you get a receipt for this payment and any future payments. If you change your mind and break the contract, the seller may be entitled to keep the deposit and ask you to pay a cancellation fee.
Picking up your new car
Before you pick up your new car, the dealer you are buying it from should inspect the car and go through its features with you. It is worthwhile inspecting the vehicle yourself, particularly checking the bodywork for dents and chips in the paintwork.
You may also want to check:
The date the vehicle was built. You can search the VIN on the Register of Approved Vehicles (RAV) to find the date
the interior trim for cuts and scratches
that there is a spare tyre, tool kit and jack
that the lights and indicators are working properly
for the accessories or extras you ordered
that the odometer reading is appropriately low
that the features specified in the contract are included.
To check for mechanical issues, you may want to take the car for a test drive with the motor dealer. Remember that during the first 12 months of ownership, the dealer has an obligation to rectify any defects.
Before you drive away
Make sure the seller gives you (if available):
all keys including those for the ignition, glove box, boot and alarm
the service books, owner’s manual and logbook
instructions for working and deactivating any alarm
location of the hidden ignition switch if there is one
radio security number
Motor vehicle duty
In NSW, you generally need to pay motor vehicle duty (commonly known as stamp duty) when you are:
registering a new vehicle for the first time
transferring a vehicle’s registration to another person
registering an imported second-hand vehicle in NSW for the first time.
Transport for NSW collects the motor vehicle duty on behalf of Revenue NSW. You will pay motor vehicle duty on the market value of the vehicle or on the price you paid for the vehicle, whichever is higher. Stamp duty is three per cent of the market value of the car, up to $44,999 then five per cent on the value over $45,000. Revenue NSW has more information about motor vehicle duty.
Registration and insurance
Before you can drive your new vehicle, you need to make sure it is registered and has compulsory third party (CTP) insurance.
When you buy a new vehicle, the dealer can organise the rego and CTP forms and register the vehicle on your behalf. Learn more about registering a new vehicle.
Contact NSW Fair Trading
Online: Complaints and enquiries
Phone: 13 32 20 (Monday to Friday, 8:30am-5pm)
In-person: find a service centre