In South Australia, the sale of secondhand cars by businesses is regulated by the Second-hand Vehicle Dealers Act 1995 (SA), and any references in this section are to this Act.

By contrast, buying a secondhand car from a private seller has few protections for a purchaser. More information about buying from a private seller is set out below.

Second-hand car dealers

No person may carry on a business of selling second hand motor vehicles unless they are licensed to do so [s 7]. The definition of what constitutes dealing in under the legislation has been expanded to catch “backyard” (unlicensed) traders. Under section 50 a person will be presumed to be a dealer if:

Before granting a licence the Commissioner of Consumer Affairs must be satisfied that all the people concerned with the business are fit and proper people to hold a licence [s 9]. The Commissioner must also be satisfied that the business has sufficient resources to meet the requirements of the Act. If an unlicensed person carries on the business of buying and selling second hand motor vehicles they commit an offence and can face a penalty up to $100 000 [s 7].

Display of information

Dealers must give certain information to any potential buyers and a notice, known as a Section 16 Notice, setting out the information must be attached to the vehicle. The information includes:

This information must also be displayed at any auction where second hand vehicles are sold [s 20].

Contract of sale

A contract for the sale of a second-hand vehicle by a dealer must be in writing within one document and be signed by the parties to the sale [s 17(1)]. It must also contain other information about the dealer and the vehicle, and whether the 2 day cooling-off period applies, set out in a Form 5 Particulars to be included in a contract [reg 12]. A purchaser must also be given a copy of the Section 16 Notice, and a Form 3 Notice to Purchaser, which confirms the details on the Section 16 Notice and describes the duty to repair.

Statutory duty to repair

Defects in a vehicle which make it unroadworthy or illegal to drive at the time of delivery to the purchaser must be repaired or made good by the dealer regardless of the price paid for, or the distance traveled by, the vehicle [s 23(7)].

In addition to the pre-condition that a car is roadworthy when delivered, dealers have a duty to repair defects in secondhand cars dependent on the price paid for the car, its age and distance travelled.

If the car was first registered more than 15 years before the sale or driven more than 200,000 kilometres, there is no duty by the dealer to repair (aside from ensuring that it is roadworthy).

The duty to repair by the dealer is also limited by time or distance driven [s 23(4)]:

In calculating the warranty period, the time that the vehicle is with the dealer for repairs does not count. The duty does not apply to the tyres or battery (unless those would make the car unroadworthy), or to reasonably apparent defects in upholstery or paintwork [ss 23(6),(7)]. A dealer does not have to repair any defects in an accessory not originally fitted by the vehicle's manufacturer, or not produced or approved by the manufacturer for fitting to vehicles of that kind if the dealer has stated in the Section 16 Notice given to the purchaser that the dealer does not accept a duty to repair a defect in that accessory [Second-hand Vehicle Dealers Regulations 2010 (SA) reg 21, sch 4].

The dealer is also not responsible for repairs to damage caused by an accident or deliberate act by someone, or normal wear and tear. Insurance may cover accidental damage.

Purchasers may also have rights under the Australian Consumer Law in relation to a secondhand vehicle. For more information the consumer guarantees relating to acceptable quality of goods see the Law Handbook page on Statutory Guarantees.

It is possible for a purchaser over 18 years of age to waive the dealer's duty to repair, although the purchaser cannot waive their rights in relation to applicable consumer guarantees under the Australian Consumer Law [s 33(2)]. The purchaser must be given a document known as a Waiver of rights under Part 4, that explains the consequences of giving up the right to insist that the dealer repairs defects to the car. The consumer's signature must be witnessed on this document by a Justice of the Peace, solicitor or proclaimed bank manager who is independent of the dealer [reg 23 and sch 6].

The witness has the duty to ensure that the purchaser understands the effect of the waiver before witnessing the signature [reg 23(2)(b) and sch 6]. It is an offence carrying a maximum fine of $20,000 for a dealer to, in any other way, attempt to modify or exclude the rights under this Act [s 33(3)]. This includes letting the purchaser believe that the vehicle is only for sale if the purchaser waives the warranty rights [s 33(5)].

Repairs to the car under the duty to repair must be done to acceptable industry standards. A consumer is also required to deliver the car to the dealer for the repairs to be done, to give the dealer a reasonable opportunity to fix the problem [s 24].

If the dealer cannot or will not repair the car in a reasonable time, a purchaser is entitled to get assistance from Consumer and Business Servicesfor a conciliation conference [s 24(2)]. If this does not resolve the problem it may be necessary to apply for a Magistrates Court order [s 24(5)].

If it is not possible or safe to deliver the car to the dealer, and the dealer is put on notice of the purchaser's intention to have the repairs done by another repairer, it may be possible to claim the cost of the repairs from the dealer on application to the Magistrates Court.

The duty by a secondhand dealer to repair does not apply to motor cycles or to vehicles purchased at auction or immediately after an auction [s 23(3)].

Cooling-off period

Purchasers also have the right to rescind (cool-off) a contract for a secondhand car bought from a dealer by delivering a written notice to the dealer within 2 business days of the signing of the contract [s 18B and reg 23(3)].

A dealer cannot require a purchaser to make any payment before the cooling period expires other than a deposit of not more than 10% of the contract price [s 18B(5)]. If the contract is cancelled by the purchaser within the cooling off period, the dealer must refund any deposit paid, less 2% of the contract price or $100, whichever is the lesser. The refund must be paid by the end of the next business day and the dealer faces a penalty of up to $5,000 (or $500 expiation fee) if they fail to comply [s 18B(7)].

During the cooling-off period, both physical possession and legal title for the vehicle remains with the dealer, who must allow the purchaser reasonable access to inspect the vehicle. The right to rescind the contract does not apply if the purchaser takes possession of the car. Other rights may exist under the Australian Consumer Law relating to the consumer guarantee as to acceptable quality or misleading and deceptive conduct and if there is a problem, it is wise to get legal advice regarding a remedy as soon as possible.

A purchaser over 18 years of age can waive their right to a cooling-off period but must sign a document, known as a Waiver of Cooling-off Rights, indicating that they are aware of the implications of doing this [s 33(2a), reg 23(3) and sch 6]. It is an offence for a dealer to influence or attempt to influence a purchaser to waiver their right to withdraw from the contract and a penalty of up to $20,000 applies [s 33(5a)]. In addition, they can be pursued for damages in the Magistrates Court by any individual who can show that they have suffered a loss or damage as a result of the offence [s 33(5b)].

Effect of cooling-off period on credit contract

A credit contract will not take effect until after the expiration of the cooling-off period or, in the event that the purchaser waives their right to withdraw, until a waiver has been signed [s 18B(9)(b)].

If a purchaser withdraws from a sales contract within the cooling-off period, any credit contract entered into in relation to the purchase will be void and any security taken by the credit provider will be discharged [s 18B(9)(a)].

Other considerations when buying from a dealer

Any security held by a lender over the car is automatically discharged if it is bought from a dealer in the normal course of the dealer's business. A purchaser is also entitled to undisturbed possession of the car, as well as clear title. These guarantees apply under the Australian Consumer Law.

Private sales

Buying a car privately offers few protections for the purchaser. However, there are a few steps that a purchaser can take before buying to avoid problems.

A private seller has no duty to repair a secondhand car. As a result it is essential to have the car checked over mechanically first. If any substantial claims are made by the seller regarding the car, such as its ability to tow a trailer, or year of manufacture or odometer reading, it is very wise to check the information for yourself. There is also no cooling-off period when buying secondhand.

If you rely on something the seller told you about the car and that information turned out not to be true, it could be a misrepresentation and may entitle you to ask for compensation. Get legal advice as soon as possible about your rights.

Money owing on the car

It is very important to ensure that there is no money owing on the car before you buy. You can obtain a search certificate from the Personal Properties Securities Register (PPSR) for a small fee ($2.00 as at March 2023). The PPSR is a national register and is available on-line at the PPSR Website. A certificate can be printed at the same time.

You will need to know the VIN of the vehicle to do the search as it is the only information that will identify the vehicle. Owner details are not required. The certificate also shows details regarding any reports regarding the stolen or written off history of the vehicle, assuming that information is reported. The search can be done by staff at PPSR if you cannot search on-line. If a certificate is obtained that shows there is no registered interest over the car, you will have until the end of the next day to complete the purchase to remain protected.

If you buy a car privately, you should always check the PPSR. If there is a registered security interest, you will lose the car if the lender repossesses it. Even if the seller says there is no security interest and no money owing, you should check for yourself on the PPSR. It may be very difficult to recover the purchase price from the seller once the lender repossesses the car, even though you have the right to ask for your money back,

The PPSR also records information about whether or not the car has been previously written off (economic write-off) or reported stolen. An economic write-off can be re-registered after strict testing, but a car that has suffered severe damage cannot, and must be taken off the road.

You can contact the PPSR by phone on 1300 007 777 (1300 00PPSR).