If you sign a contract to buy a car and need to cancel the agreement, as of 1 January 2022 the maximum amount a motor vehicle dealer may charge is up to five per cent of the total purchase price.

There is no cooling off period on contracts when buying a vehicle in Western Australia.

The cancellation fee is called ‘pre-estimated liquidated damages’ and must reflect actual costs to the dealership.

You are entitled to receive your full deposit back and should not be charged any damages fees if:

• The contract is broken because the dealer has breached their obligations.
• You withdrew the offer before the dealer accepted.
• You cannot meet your contractual obligations despite taking all reasonable steps.

Need to know more? Go to our Cancelling a contract to buy a vehicle with a dealer page.