Cooling-off period |
The cooling-off period is the period of time in which the buyer can end the contract without large penalties.
The buyer can exercise their cooling-off period right by returning the car to you before the close of business on the day following the sale, provided the buyer did not take possession of the vehicle. The buyer can take the car away for a test drive or independent mechanical inspection, without being deemed to have taken possession of the vehicle.
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.
The buyer loses the right to the cooling-off period if they sign the contract and drive the vehicle out of the car yard.
Cooling-off period form
You must give the buyer PAMD form 37a - Important pre-purchase information cooling-off period (PDF, 220 KB) before they sign the contract.
If you do not give the buyer this form, you must give them a seven-day cooling-off period instead of one day.
Deposit during cooling-off period
You can charge the buyer a non-refundable deposit. The amount cannot exceed $100.
If the sale goes ahead, take this amount off the vehicle´s purchase price. If the buyer ends the contract, you can keep a maximum of $100 of the deposit.
You must advise the buyer of this in writing when they pay their deposit.
Ending the contract during cooling-off period
To end a contract the customer needs to tell you in writing that they do not wish to proceed with the purchase. They can deliver it personally, by email or fax.
You 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
You can give one other person 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 the first buyer purchases the vehicle, the second buyer's option finishes and the dealer must refund any deposit they have paid.
Consignment vehicles
If you are selling customers´ consignment vehicles, you must tell potential buyers that they are consignment vehicles and do not have a cooling-off period.
Any advertisements for the vehicle must also state this.
Vehicle trade-in
If the buyer decides not to proceed with the purchase during the cooling-off period, you must return their deposit and trade-in vehicle (if they gave you one).
They can keep a maximum of $100 as a non-refundable deposit.
When does the business day start?
If a customer signs a contract on a Wednesday afternoon, the cooling-off period ends at the close of normal business hours (5:00 pm) on Thursday the following day.
However, if your dealership closes before 5:00 pm on Thursdays, the cooling-off period runs until your normal close of business on the Friday.
During the cooling-off period, the buyer cannot drive the car away and the dealer cannot take ownership of any trade-in.
Last reviewed 21/11/2011 |
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