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Putting down a deposit for a used car

Looking to save by using a deposit for a used car? See your options and compare used car loans now.

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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?

Sellers can request that you put down a deposit so the vehicle isn't sold to anyone else – but you are not obliged to do so. On the other hand, a used car dealer is more likely to ask you for a deposit to secure the sale, or require you to sign a contract. Some states have regulations in place for used car dealerships that allow them to ask for a deposit.

  • Queensland. The dealer can charge you a deposit that cannot exceed $100.
  • South Australia. The dealer can ask you to leave a deposit that's up to 10% of the purchase price.

Other states have no regulations for deposits.

Types of deposits for used cars

There are two types of deposits that you can be asked for when buying a used car:

Holding deposit

  • 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

Purchase deposit

  • 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

If you decide to leave a deposit to hold your vehicle, there are a few ways you can protect yourself:

  • Agree on the terms of the deposit. Check whether the deposit is refundable, whether the deposit is part of the purchase price and how the deposit should be paid. Have all the terms written down and signed by both parties.
  • Get a receipt. It's important to get a receipt for the deposit for your own records, especially if there is any disagreement down the line.
  • Inspect the car thoroughly. Even if you've agreed that the deposit is refundable, checking the car before putting down your deposit can save yourself hassle down the track. Make note of the Vehicle Identification Number (VIN), and if possible, have the car inspected by a mechanic. Also, check if the car is under finance. You can read more about what to do in the used car buying guide.
  • Don't leave too large a deposit. Check the section above to see if your state has regulations for how much of a deposit you are required to leave. If your state has no regulations set, you don't have to leave a large deposit. If you leave a big deposit and change your mind, it's a larger amount of money you'll stand to lose if you aren't entitled to a full refund.

Can I get my deposit back?

If you've signed a car loan contract or handed over a deposit, you may still change your mind about the vehicle. Each state has its own regulation in regards to "cooling-off periods", which can affect your ability to get your deposit back. A cooling-off period is a period of time after you sign a contract in which you are able to cancel it.

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.

Found your car? Compare your loan options

1 - 11 of 11
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Monthly Repayment View Details CTA
Credit Concierge Car Loan - Prime (Credit Score 800+)
From
3.69%
(fixed)
4.23%
You'll receive a fixed rate of 3.69% p.a. with a comparison rate of 4.23% p.a.
Must have a high credit score and excellent previous repayment history to qualify. Home ownership or mortgage may assist overcoming a lower credit score in some instances. Lenders individual credit criteria applies and approval is not guaranteed nor is the interest rate finalised until a formal submission for finance is made.
You'll receive a fixed rate of 3.69% p.a. with a comparison rate of 4.23% p.a.
Must have a high credit score and excellent previous repayment history to qualify. Home ownership or mortgage may assist overcoming a lower credit score in some instances. Lenders individual credit criteria applies and approval is not guaranteed nor is the interest rate finalised until a formal submission for finance is made.
loans.com.au - New - Prime Special (Variable)
3.74%
(variable)
4.28%
You'll receive a variable rate of 3.74% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees.

Special Offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. T&Cs apply.
You'll receive a variable rate of 3.74% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees.

Special Offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. T&Cs apply.
Stratton Finance Used Car Loan
From
4.99%
(fixed)
6.41%
You'll receive a fixed rate loan from 4.99% p.a. with a comparison rate of 6.41% p.a.
A used car loan of up to $300,000 with quick approval times and balloon payment options.
You'll receive a fixed rate loan from 4.99% p.a. with a comparison rate of 6.41% p.a.
A used car loan of up to $300,000 with quick approval times and balloon payment options.
loans.com.au - New - Prime Special (Fixed)
5.09%
(fixed)
5.64%
You'll receive a fixed rate of 5.09% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment.

Special Offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. T&Cs apply.
You'll receive a fixed rate of 5.09% p.a. based on your risk profile
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment.

Special Offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. T&Cs apply.
OurMoneyMarket Car Loan
From
5.85%
(fixed)
6.47%
You'll receive a fixed interest rate from 5.85% p.a. to p.a. based on your risk profile.
Borrow between $2,001 and $75,000 to finance a new or used car up to 7 years.
You'll receive a fixed interest rate from 5.85% p.a. to p.a. based on your risk profile.
Borrow between $2,001 and $75,000 to finance a new or used car up to 7 years.
RACV Used Car Loans
From
6.99%
(fixed)
7.68%
You'll receive a fixed rate from 6.99% p.a.
Benefit from no ongoing fees, 5-hour approval and a 21-day satisfaction guarantee. Interest rate discounts for members.
You'll receive a fixed rate from 6.99% p.a.
Benefit from no ongoing fees, 5-hour approval and a 21-day satisfaction guarantee. Interest rate discounts for members.
loans.com.au - Used Car Loan (6+ years)
5.04%
(variable)
5.59%
You'll get a variable rate of 5.04% p.a.
Borrow up to $100,000 for a used car for 6+ years, with no monthly fee.

Special offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. Terms and conditions apply.
You'll get a variable rate of 5.04% p.a.
Borrow up to $100,000 for a used car for 6+ years, with no monthly fee.

Special offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. Terms and conditions apply.
NRMA Used Car Loan
From
6.99%
(fixed)
7.68%
You'll receive a fixed rate from 6.99% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
You'll receive a fixed rate from 6.99% p.a.
Finance a used car with NRMA and benefit from a fixed rate term and no monthly fees. Pre-approval available within 5 business hours.
loans.com.au - Used Car Loan (8+ years)
8.94%
(variable)
9.51%
You'll get a variable rate of 8.94% p.a.
Borrow up to $50,000 for a used car for 8+ years, with no monthly fee.

Special offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. Terms and conditions apply.
You'll get a variable rate of 8.94% p.a.
Borrow up to $50,000 for a used car for 8+ years, with no monthly fee.

Special offer: Settle the loan before 30 June 2022 and enter the draw to win a $1,000 fuel gift voucher. Terms and conditions apply.
Credit Concierge Car Loan - Mid Prime (Credit Score 500-800)
From
5.89%
(fixed)
6.99%
You'll receive a fixed rate of 5.89% p.a. with a comparison rate of 6.99% p.a.
Must have an above average credit score and no defaults or late payments in the last 6 months. Home ownership or mortgage may assist overcoming a lower credit score in some instances. Lenders individual credit criteria applies and approval is not guaranteed nor is the interest rate finalised until a formal submission for finance is made.
You'll receive a fixed rate of 5.89% p.a. with a comparison rate of 6.99% p.a.
Must have an above average credit score and no defaults or late payments in the last 6 months. Home ownership or mortgage may assist overcoming a lower credit score in some instances. Lenders individual credit criteria applies and approval is not guaranteed nor is the interest rate finalised until a formal submission for finance is made.
Credit Concierge Car Loan - Sub Prime (Credit Score Below 500)
From
14.99%
(fixed)
17.99%
You'll receive a fixed rate of 14.99% p.a. with a comparison rate of 17.99% p.a.
Must have stable employment longer than 3 months with no recent missed payments or overdrawn bank accounts. Defaults are assessed on individual circumstances and amounts on credit file must be paid or under arrangement. Good savings history may assist overcoming a low credit score and any unpaid defaults in some instances. Lenders individual credit criteria applies and approval is not guaranteed nor is the interest rate finalised until a formal submission for finance is made.
You'll receive a fixed rate of 14.99% p.a. with a comparison rate of 17.99% p.a.
Must have stable employment longer than 3 months with no recent missed payments or overdrawn bank accounts. Defaults are assessed on individual circumstances and amounts on credit file must be paid or under arrangement. Good savings history may assist overcoming a low credit score and any unpaid defaults in some instances. Lenders individual credit criteria applies and approval is not guaranteed nor is the interest rate finalised until a formal submission for finance is made.
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Car Loan Offers

Important Information*
Logo for IMB New Car Loan
IMB New Car Loan

You'll receive a fixed rate of 4.88% p.a.
A low minimum borrowing amount of $2,000 that you can use to purchase a new car or one up to two years old.

Logo for Beyond Bank Low Rate Car Loan "Special Offer"
Beyond Bank Low Rate Car Loan "Special Offer"

You'll receive a fixed rate of 4.69% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.

Logo for RACV New Car Loans
RACV New Car Loans

You'll receive a fixed rate from 5.99% p.a.
A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.

Logo for NRMA New Car Loan
NRMA New Car Loan

You'll receive a fixed rate of 5.99% p.a.
Purchase a new or used car up to 2 years old and benefit from a fixed rate and no monthly fees. Pre-approval available within 5 business hours.

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2 Responses

  1. Default Gravatar
    RhonMacOctober 10, 2018

    Hi
    My 17 yr old son has paid a $500 deposit to a dealer
    Hoping on finance which is proving difficult…not allowed under 18
    Parents are required to borrow for him even though he is earning good money in a permanent part time job per week.
    They also have commitments of their own
    If finance can’t be arranged does he lose his deposit?? And his trade-in agreed to sell as part of the deal!

    • Avatarfinder Customer Care
      JohnOctober 10, 2018Staff

      Hi RhonMac,

      Thank you for leaving a question.

      Was an agreement signed when the $500 deposit was given? Ideally, there should be one that states whether the deposit is refundable, whether the deposit is part of the purchase price and how the deposit should be paid. Have all the terms written down and signed by both parties. This ensures clarity for the pending contract on the car. Please reach out to the dealer on what you could agree upon regarding the deposit. Hope this helps!

      Cheers,
      Reggie

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