Guides / Lemon cars
Lemon cars: your rights in Victoria
A lemon car is one with a serious fault, or with faults that keep coming back after repairs. Victoria has no separate lemon law, but the law still gives you rights against the dealer.
In short
- Victoria has no separate lemon law. A lemon car is covered by the consumer guarantees, the used car warranty and the Guarantee Fund.
- If the faults amount to a major failure, you can reject the car and choose a refund or a replacement.
- Several faults, taken together, can be a major failure even if each one could be fixed.
- The right to reject ends after a reasonable time, so act promptly and in writing.
What is a lemon car?
“Lemon” is not a legal term. People use it for a car with a serious fault, or with faults that keep coming back after repairs. Whether a lemon car gives you a remedy depends on what the law says about the faults, not on the label.
The consumer guarantees apply to new and used cars bought from a business. They do not apply to cars bought at auction or privately.1
Is there a lemon car law in Victoria?
Not a separate one. In Victoria, the rights come from three places:
- the consumer guarantees in the Australian Consumer Law: a car must be of acceptable quality, which includes being safe and durable;1
- the used car warranty, if a licensed trader sold you a used car that is no more than 10 years old and has travelled less than 160,000 km;2
- the Motor Car Traders’ Guarantee Fund, if a licensed trader does not honour the warranty, does not pass good title, or fails to refund or deliver.3
For the warranty and the Fund, see Cars and car dealers.
When a lemon car is a major failure
A fault is a major failure if, for example, a reasonable buyer who knew about it would not have bought the car, the car is substantially unfit for normal use and cannot easily be fixed within a reasonable time, or the car is unsafe.4
Several faults can also be a major failure when they are taken together, even if each one could be repaired on its own. The faults do not have to relate to the same guarantee.5 This is the rule that most often helps the owner of a lemon car.
If it is not a major failure
The dealer can choose to repair the car within a reasonable time, or to replace it or refund you. If it refuses or takes too long, you can have the car repaired elsewhere and recover the reasonable cost, or reject it.6
How to reject a lemon car
Tell the dealer in writing that you reject the car, and why.7 You then choose a refund, or a replacement of the same type and similar value if one is reasonably available.8 You must return the car, unless it cannot be returned without significant cost because of the nature of the fault; then the dealer must collect it within a reasonable time at its own expense.9 A refund must be money, not a credit towards another car.10
You cannot reject the car once the rejection period has ended, or if it was damaged after delivery for reasons unrelated to its condition when you bought it. The rejection period is the time within which it would be reasonable to expect the fault to show, considering the type of car, how it is likely to be used, and how long and how much it should be usable.11 Keep every service and repair record, and act as soon as the pattern is clear.
You can also claim other loss the faults caused, such as towing costs, if that loss was reasonably foreseeable.12
Claims against the manufacturer
Questions about a lemon car
Have another question? Phone 1800 776 529 or send us a message.
No. The consumer guarantees apply as well, whatever the warranty says, and a term that tries to exclude them is void.14
That depends on how the finance was arranged. Bring the finance contract; it affects how a refund is paid.
The consumer guarantees do not apply to private sales or to cars bought at auction.1 Other claims may still be possible, for example under the contract.
The right to reject ends with the rejection period, which depends on the car. Most consumer claims must be started within six years, but some time limits are much shorter. A claim against the manufacturer must be started within 3 years after you first became aware, or ought reasonably to have become aware, of the failure.15 See Time limits.
When to get help
If the dealer keeps offering another repair and you think the car should be rejected, or it refuses a refund. A review of your documents and a letter to the dealer is $1,320, including GST.
The law
- ACL s 54(1), (2).
- Motor Car Traders Act 1986 (Vic) s 54.
- Motor Car Traders Act 1986 (Vic) ss 74, 76.
- ACL s 260(1).
- ACL s 260(2), (3).
- ACL s 259(2).
- ACL s 259(3)(a).
- ACL s 263(4).
- ACL s 263(2), (3).
- ACL s 263(5).
- ACL s 262.
- ACL s 259(4).
- ACL s 271(1).
- ACL s 64(1).
- Competition and Consumer Act 2010 (Cth) sch 2 s 273.
Last reviewed: November 2026. This page is general information about Victorian and Commonwealth law as at November 2026. It is not legal advice about your circumstances.
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