used-car-deposits

Putting down a deposit for a used car

Looking to save by purchasing a used car? Here's everything you need to know about deposits.

If you're in the hunt for a used car or you've already found the vehicle you want to buy, 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, if 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 you need to leave a deposit?

Sellers can request that you put down a deposit so the vehicle isn't sold to anyone else – whether you oblige or not is up to you. 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 needs to be decided between you and the seller
  • You need to agree whether this deposit is refundable (get this in writing)
  • Applies for a limited time

Purchase deposit

  • You commit to purchasing the vehicle
  • It's usually non-refundable, but 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. Getting a receipt for the deposit is an important record to have, especially if the deal goes sour.
  • 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 it's 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.

Used Car Loan Offer

IMB Secured Personal Loan

6.89 % p.a.

fixed rate

7.24 % p.a.

comparison rate

  • No monthly account fees
  • Extra repayments OK
  • Borrow up to $60,000
Security Logo

100% confidential application

Used Car Loan Offer

A competitive fixed rate loan available from $2,000 that you can use for any worthwile purpose. Security required.

  • Interest rate: 6.89% p.a.
  • Comparison rate: 7.24% p.a.
  • Interest rate type: Fixed
  • Application fee: $250
  • Minimum loan amount: $2,000
  • Maximum loan amount: $60,000
Go to site
Promoted

Found your car? Calculator your monthly repayments with the below loans

Rates last updated September 19th, 2018
$
Name Product Interest Rate (p.a.) Comparison Rate (p.a.) Min Loan Amount Loan Term Monthly Service Fee Application Fee Product Description Monthly Repayment
IMB Secured Personal Loan
6.89% (fixed)
7.24%
$2,000
1 to 5 years
$0
$250
You'll receive a fixed rate of 6.89% p.a.
Benefit from this competitive rate by securing the loan with a vehicle up to 6 years old. Use this flexible loan for any purpose.
Latitude Motor Vehicle Loan
From 6.99% (fixed)
8.1%
$5,000
1 to 7 years
$10
$295
You'll receive a fixed rate between 6.99% p.a. and 14.99% p.a. based on your risk profile
Apply for a loan from $5,000 to finance a new or used car. Flexible repayments and options to finance a classic car.
Stratton Finance New Car Loan
From 5.29% (fixed)
6.56%
$18,000
1 to 7 years
$8.90
$459.20
You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $100,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.
Beyond Bank Low Rate Car Loan
From 5.69% (fixed)
5.97%
$25,000
1 to 7 years
$0
$175
You'll recive a fixed rate of 5.69% p.a.
Take advantage of a competitive rate, pre-approval and no early repayment fees when you finance a car under two years old.
St.George Secured Personal Loan - Fixed Rate
From 8.49% (fixed)
9.6%
$3,000
1 to 5 years
$12
$195
You'll receive a fixed rate from 8.49% p.a. based on the value of your car
Get a competitive rate and apply for a larger loan up to $80,000 when you attach a new or used car as security to the loan.
RACV Personal Loan
From 6.99% (fixed)
7.55%
$5,000
1 to 7 years
$0
$399
You'll receive a fixed rate of 6.99% p.a.
A secured personal loan with a competitive rate to help you fund a range of purposes. Benefit from no ongoing fees.
RACQ Bank Used Car Loans
8.95% (fixed)
9.52%
$3,000
5 years
$0
$395
You'll receive a fixed rate of 8.95% p.a.
Finance a used car over two years old and benefit from a competitive rate. Pre-approval and 21-day satisfaction guarantee also available.

Compare up to 4 providers

Picture: Shutterstock

Was this content helpful to you? No  Yes

Related Posts

Car Loan Offers

Important Information*
IMB New Car Loan

You'll receive a fixed rate of 5.89% 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.

Loans.com.au - New Car Loan

You'll receive a fixed rate of 5.44% p.a.
Finance a new car and benefit from features such as fast approval, no ongoing fees and an optional balloon payment.

Latitude Motor Vehicle Loan

You'll receive a fixed rate between 6.99% p.a. and 14.99% p.a. based on your risk profile
Apply for a loan from $5,000 to finance a new or used car. Flexible repayments and options to finance a classic car.

Stratton Finance New Car Loan

You'll receive a fixed or variable rate depending on the lender you are approved with
Apply for up to $100,000 and use cash or trade in a vehicle to use as a deposit. Optional balloon payment available.

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy.
Ask a question
Go to site