The cooling-off period is the period of time in which the buyer can end the contract without large penalties. When you buy a used car from a motor dealer, a cooling-off period of one business day, on which the motor dealer trades, applies.
A cooling-off period does not apply to the purchase of new vehicles.
If you take possession of the vehicle during this time, you lose your right to a cooling-off period. However, you can take the vehicle for an independent mechanical inspection and test drive the vehicle during the cooling-off period.
The cooling-off period applies to all used motor vehicles except when the sale is:
- on consignment on behalf of consumer (unless the vehicle owner is a motor dealer or auctioneer)
- to another motor dealer
- done by auction
- done privately.
A dealer cannot refuse to grant you a cooling-off period.
The sales contract is binding on the dealer as soon as both parties sign the contract.
As the buyer, you are bound by the contract only after the expiry of the cooling-off period, unless you take possession of the vehicle.
Cooling-off period form
The dealer must give you PAMD Form 37a - Important pre-purchase information cooling-off period (PDF, 220 KB) before you sign the contract.
If they do not give you this form, they must give you a seven-day cooling-off period instead of one day.
Deposit during cooling-off period
The dealer can charge you a non-refundable deposit. The amount cannot exceed $100.
If the sale goes ahead, the dealer takes this amount off the vehicle´s purchase price. If you end the contract, they can keep a maximum of $100 of the deposit.
The dealer must advise you of this in writing when you pay your deposit.
Ending the contract during cooling-off period
To end a contract you need to tell the dealer in writing that you do not wish to proceed with the purchase. You can deliver it personally, by email or fax.
The dealer cannot refuse a buyer who is exercising their cooling-off right, or harass a buyer not to exercise their right.
Option from another buyer during cooling-off period
The dealer can give one other potential buyer an option to purchase a vehicle that is under contract.
For example, a vehicle in the yard that is being held under contract during the cooling-off period.
If you do purchase the vehicle, the other buyer's option finishes and the dealer must refund any deposit they have paid.
If the dealer sells customers´ consignment vehicles, they must tell potential buyers that they are consignment vehicles and do not have a cooling-off period.
Any advertisements for the consignment vehicle must also state this.
If you decide not to proceed with the purchase during the cooling-off period, the dealer must return your deposit and trade-in vehicle (if you gave them one).
They can keep a maximum of $100 as a non-refundable deposit.
When does the business day start?
If you sign a contract on a Wednesday, the cooling-off period ends at the close of normal business hours (5:00 pm) on Thursday, the following day.
However, if the dealership closes before 5:00 pm on Thursdays, the cooling-off period runs until their usual close of business on the Friday (which may not necessarily be 5.00 pm).
Real life stories
Read a real life story about why it's so important to check your used car contract.
Read a real life story about the cooling-off period on used car contracts.
Last reviewed 22/11/2011