VCAT Motor Vehicle Disputes in Victoria: Defective Cars, Private Sales and Consumer Guarantees

When VCAT Hears Motor Vehicle Disputes

Motor vehicle disputes involving a licensed motor car trader or a mechanic may fall in the Civil Claims List under the goods and services jurisdiction. A dispute between two private individuals needs a separate statutory basis for VCAT to hear it. Each scenario carries different rules about what VCAT can and cannot do.

The most common situation for respondents is being a private seller sued by a buyer who claims the car was defective, or being a trader facing a claim under the Australian Consumer Law. Less commonly, you might be a buyer countersuing a seller who started proceedings first.

The $40,000 Motor Car Trader Threshold

Under section 45 of the Motor Car Traders Act 1986 (Vic), a purchaser may apply to VCAT to rescind a motor car sale agreement with a cash price not exceeding $40,000 on the grounds in section 45(1), within three months after the agreement is entered into. If the purchaser notified the trader of a qualifying complaint within those three months, section 45(3) allows an application within one month after that notice.

If you are a licensed trader being sued under this provision, the buyer has strong statutory protections. Where the buyer acquired the car as a consumer, Australian Consumer Law guarantees — including that goods are of acceptable quality, match their description, and are fit for a disclosed purpose — apply. Your defence needs to address any applicable guarantees directly rather than relying on general contract terms.

If the cash price exceeded $40,000, or neither statutory timing route is met, section 45 does not provide this rescission route. Other Australian Consumer Law rights may still apply where the buyer acquired the car as a consumer.

Private Car Sale Disputes

Private sales between non-traders have weaker consumer protections. The Australian Consumer Law's consumer guarantees generally apply to goods supplied "in trade or commerce," which typically means by a business. A genuine one-off private sale between two individuals may not trigger these guarantees.

However, a private sale may still give rise to a claim under general contract law. If you sold a car and the buyer claims you misrepresented its condition — you said it had no accident history when it did, or you described it as mechanically sound when it had a known engine fault — they may have a misrepresentation or contract claim, depending on what was said and agreed. That does not by itself establish that VCAT has jurisdiction over the dispute.

If you are the private seller responding to a VCAT claim, your Points of Defence should address:

• What you actually said about the car's condition (and what you can prove you said, through text messages, the advertisement, or emails)
• Whether the buyer inspected the car or had it independently inspected before purchase
• Whether you disclosed known defects

The principle of "buyer beware" has limits, but the buyer's failure to inspect a vehicle they had the opportunity to inspect weakens their position.

Responding to a Defective Car Claim

Whether you are a trader or a private seller, the process for responding follows the standard VCAT goods and services procedure. You file Points of Defence through the myVCAT portal, addressing each allegation in the applicant's Points of Claim.

Evidence matters more than argument in car disputes. The Tribunal Member will want to see:

• The sale listing or advertisement showing how the car was described
• Text messages or emails from before the sale discussing the car's condition
• Pre-sale inspection reports (either yours or the buyer's, if one was obtained)
• Mechanical inspection reports from after the dispute arose, ideally from an independent mechanic
• Service records showing maintenance history
• Photos or videos of the vehicle's condition at the time of sale

If the buyer claims a defect that you believe existed before the sale, an independent mechanical inspection report can help establish whether the fault predated the sale and what repairs it requires.

Counterclaims and Costs

If the buyer's claim is not just wrong but their conduct caused you loss — for example, they damaged the car after purchase and are now blaming you — you can lodge a counterclaim through myVCAT. This requires a separate application fee and links the two matters together for a single hearing.

VCAT's default costs rule under section 109 of the VCAT Act is that each party bears their own costs. The Tribunal may award costs if it considers that fair in the circumstances, including where a party acted unreasonably, caused unnecessary delay, or incurred costs unnecessarily.

For the full procedure of defending any goods and services claim at VCAT, including deadlines, evidence exchange and hearing preparation, see our step-by-step guide.

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