NSW Car Sold by Dealer - Can I Get a Deposit Refund?

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23 August 2015
Could you please assist in helping me understand my legal position under Australian Consumer Law?

I placed a $1000 deposit for a used vehicle, with the understanding I would finance the remaining amount. The dealers finance rates were above market rate so I choose to fund the car via my own financial institute. During the process of financing the vehicle the dealer sold the vehicle (informing me via voicemail) and advising that my deposit will not be refunded. I have the finances available to purchase the original vehicle for which I signed a contract. The dealer has offered 2 options
1. Purchase another vehicle. (Which I do not want and is greater amount)
2. Lose deposit

Thanks in advance.

Sarah J

Well-Known Member
16 July 2014
Melbourne, Victoria
Hi Zak,

Is the dealer an authorised car dealer operating in Australia (i.e. they are not a private seller)?

It does not seem right that (i) after signing a contract to sell the vehicle to you, they then sell the vehicle to another party; and (ii) keep your deposit after not delivering the car. Did you sign a contract for the sale and purchase of the vehicle? If so, does it impose an obligation on the seller to provide you with the car or is it merely an agreement to agree after happening of certain conditions (e.g. you get finance)?

You seem like you would be protected under the Australian Consumer Law. Contact NSW Fair Trading to lodge a complaint. They offer a free dispute resolution service to help you get your deposit back (or possibly a replacement car if available). If Fair Trading cannot help, or you think their process is too slow, you can commence an action with NCAT (a tribunal, not a court) for the recovery of your deposit. The application process is all online and they will arrange a hearing with you within 6 weeks of lodging the application (so relatively faster).

There are also a number of other legislations that regulate car dealers in Australia (it is a heavily regulated area). So if you are unsuccessful under Australian Consumer Law, there may also be some recourse under the Sale of Goods Act or contact law. However, much of it will depend on what is written in the contract between you and the dealer.