Victorian Consolidated Legislation

Motor Car Traders Act 1986 - SECT 43

Cooling-off period

43. Cooling-off period



(1) A purchaser (not being a motor car trader or a body corporate) under an
agreement for the sale of a motor car may, at any time before the expiration
of three clear days after the purchaser signs the agreement, terminate the
agreement by giving to or serving on the motor car trader or an agent of the
motor car trader notice in writing to the effect that the purchaser terminates
the agreement.

(1A) For the purposes of subsection (1), a clear day does not include any day
that is-

   (a)  a Saturday or a Sunday; or

   (b)  a day that is wholly or partly observed as a public holiday throughout
        Victoria.

(1B) A motor car trader must provide a purchaser (not being a motor car trader
or a body corporate) with a copy of the prescribed form before the purchaser
enters into an agreement for the sale of a motor car.

Penalty: 10 penalty units.



(1C) The prescribed form under subsection (1B) must set out-

   (a)  a statement of the purchaser's rights under this section to terminate
        the agreement; and

   (b)  an explanation of the effect of a waiver under this section of the
        right to terminate the agreement; and

   (c)  the form of that waiver.

(2) Subsection (1) ceases to apply if the purchaser immediately before
accepting delivery signs the waiver in the prescribed form acknowledging that
the right to terminate the agreement no longer applies.

(2A) A motor car trader must, subject to and in accordance with the
regulations, retain a copy of any prescribed form signed by a purchaser under
subsection (2).

Penalty: 10 penalty units.

(3) A motor car trader must not sell, give in exchange or otherwise dispose of
a motor car given or agreed to be given by a purchaser under an agreement for
the sale of another motor car in satisfaction of part of the purchase price
during the period during which the purchaser may terminate the agreement under
this section.

Penalty: 50 penalty units.

(4) If an agreement for the sale of a motor car has been terminated in
accordance with this section-



   (a)  the vendor under the agreement must pay to the purchaser all money
        received by the vendor less-

   (i)  in the case of an agreement for the sale of a used motor car or an
        off-trade-premises sales agreement of any motor car, the sum of $100
        or 1 per cent of the purchase price under the agreement (whichever is
        the greater); or

   (ii) in the case of an agreement for the sale of a new motor car that is
        not an off-trade-premises sales agreement, the sum of $400 or 2 per
        cent of the purchase price under the agreement (whichever is the
        greater); and

   (ab) the vendor under the agreement must return to the purchaser any motor
        car given in satisfaction of any part of the purchase price; and

   (b)  any collateral credit agreement is discharged to the extent that it
        was entered into for the purposes of the payment for the motor car
        supplied or to be supplied under the agreement; and

   (c)  any security interest in the motor car arising under the collateral
        credit agreement is extinguished to the extent that it secures the
        payment of a debt or other pecuniary obligation or performance of any
        other obligation under the collateral credit agreement; and

   (d)  a purchaser who has accepted delivery of the motor car before the
        agreement was terminated-

   (i)  is liable to the motor car trader for any damage (other than fair wear
        and tear) occurring to the motor car while it was in the purchaser's
        possession; and

   (ii) subject to subsection (5), must return the motor car to the motor car
        trader.

(5) A purchaser is not liable under subsection (4)(d) to return the motor car
to the motor car trader if, before the agreement was terminated, a defect
appeared in the motor car for reasons beyond the control of the purchaser
making the motor car-

   (a)  incapable of being driven; or

   (b)  unroadworthy-

but must permit the motor car trader to collect, or arrange for the collection
of, the motor car.

(6) Sections 25 and 26 of the Credit Act 1984 and section 125 of the Consumer
Credit (Victoria) Code do not apply to the termination of agreements under
this section.

(7) This section does not apply to an agreement for the sale of a commercial
vehicle or a motor car purchased at a public auction.

(8) In this section off-trade-premises sales agreement means an agreement for
the sale of a motor car that is made or entered into in the presence of the
purchaser (or a person acting on behalf of the purchaser) and the motor car
trader (or a person acting on behalf of the motor car trader) at-

   (a)  a private residence other than a private residence which is the
        business premises of the motor car trader or the person acting on
        behalf of the motor car trader; or

   (b)  the workplace of the purchaser-

unless the agreement was entered into at either of those premises at the
request of the purchaser.