The Law Handbook 2024

636 Section 6: Houses, communities and the road the loss or damage that the seller may claim to have suffered. If the seller is a car trader, it is also a good idea to send a copy of the letter to Consumer Affairs Victoria and inform the car trader that you have done this. It can help to pressure the car trader into rescinding or acknowledging your withdrawal from the contract. Retrieving a deposit or trade-in vehicle If a contract is rescinded or withdrawn from, both you and the seller must be placed in the same position that you were in before the contract was entered into. The exception is when the cooling-off period under section 43 of the MCT Act is relied upon, in which case the car trader retains: • in the case of a used car contract : $100 or one per cent of the purchase price, whichever is greater; or • in the case of a new car contract : $400 or two per cent of the purchase price, whichever is greater. The seller gets back the car sold to you. You get back the money paid, together with any trade-in vehicle (or, where the car trader has already sold the trade-in vehicle, the equivalent monetary value of the trade- in). (For used cars, see s 41 MCT Act; reg 23 sch 2 MCT Regulations.) If the car trader disputes that the contract has been legally rescinded or withdrawn from and refuses to return your money and any trade-in vehicle, you need to force the car trader’s hand by applying to VCAT for orders stating that the contract has been rescinded or withdrawn from and ordering the deposit or trade-in vehicle, or both, be returned. A car trader who disputes you getting out of a contract may sue you for damages in the Magistrates’ Court. If this seems likely, then it’s a good idea to make a ‘pre-emptive strike’ and bring your own application in VCAT first (this is much cheaper than having to defend a Magistrates’ Court claim). If the car trader gets in first, you can apply to have the case transferred from the Magistrates’ Court to VCAT. If VCAT or the court does not agree that the contract has been rescinded or withdrawn from, then you have wrongfully broken the contract (see ‘What if a contract has not been cancelled or withdrawn from properly?’, below). How to get out of a car sale contract There are a number of grounds on which a car sale contract can be legally cancelled or withdrawn from. These include: 1 cooling-off period; 2 Motor Car Traders Act (ss 45, 88B); 3 failure of a condition precedent; 4 quality; 5 misrepresentation; 6 waiver and estoppel; 7 withdrawal of offer; 8 delivery is delayed; and 9 using the National Credit Code. 1 Cooling-off period A cooling-off period is the time during which a purchaser can withdraw from a contract after signing it. Section 43 of the MCT Act provides for a cooling- off period after the purchase of a new or used car from a car trader. Under the MCT Act, a purchaser can cancel a car sale contract within three clear days after signing it, unless: • the purchaser is a car trader or owners corporation; • the purchaser has accepted delivery of the car; • the car is a commercial vehicle; or • the car was purchased at a public auction. NOTE A car trader cannot sell any trade-in vehicle during the three-day cooling-off period (s 43(3) MCT Act; penalty: 50 pu). If you suffer loss as a result of the car trader selling the trade-in vehicle during the cooling-off period, you can claim compensation from the Motor Car Traders’ Guarantee Fund (s 76). (The Motor Car Traders’ Guarantee Fund is administered by Consumer Affairs Victoria; for CAV’s contact details, see ‘Contacts’ at the end of this chapter.) This cooling-off period also applies to ‘off-trade- premises sales agreements’ for new or used cars. An off-trade-premises sales agreement is made in the presence of the purchaser and the car trader (or a person acting on either party’s behalf) at a private residence or the purchaser’s workplace (unless the agreement was made at either premises at the purchaser’s request).