Putting down a deposit for a used car
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If you're looking to buy a used vehicle, you may be wondering if you need to leave a deposit.
Both private sellers and used car dealerships may ask for a deposit, so it's important to know how much you're required to put down, whether you're entitled to a refund, or if you need to leave a deposit at all.
Read through the guide to see where you stand before you make your purchase.
Do I need to leave a deposit?
Types of deposits for used cars
There are two types of deposits that you can be asked for when buying a used car:
- A holding deposit essentially "holds" the vehicle for you but you're in no way obliged to follow-through with the purchase
- It may go towards the purchase price but this needs to be decided between you and the seller
- You need to agree whether this deposit is refundable (get this in writing)
- Will generally only apply for a limited time
- You commit to purchasing the vehicle
- It's usually non-refundable, but you should confirm this with the seller
- You sign a contract that outlines all terms and conditions relating to the sale
What to do if you leave a deposit
Can I get my deposit back?
Here are the cooling off periods by state:
- Queensland. A cooling-off-period of one day applies to all used car sales. You must cancel in writing.
- NSW. A one-day cooling-off period only applies when you are purchasing the car under a credit contract, that is, using finance arranged with the dealer. You must cancel in writing and the dealer can charge you $250 or 2% of the cars value, whichever is less.
- Victoria. A cooling-off period of three business days, excluding weekends and public holidays, applies to cars and motorbikes purchased from licensed motor car traders. You lose this period if you opt for delivery during the three-day period. The dealer can keep $100 or 1% of the purchase price, whichever is greater.
- Tasmania. No cooling-off period applies.
- South Australia. You're entitled to a two-day cooling-off period in SA. If you cancel during this period, the seller can keep $100 or 2% of the purchase price, whichever is less.
- Western Australia. No cooling-off period applies.
- Northern Territory. No cooling-off period applies.
- ACT. After you've signed the purchase agreement you're entitled to a cooling-off period of three days. If you cancel during this time (must be cancelled in writing) the seller can charge you $100 or 1% of the purchase price, whichever is greater.
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