Lemon Law in Australia: How to Reject a Faulty EV and Get Your Money Back

Australia doesn’t have a lemon law in name, but you can still reject a faulty car and get your money back. The Australian Consumer Law (ACL) gives every buyer a set of consumer guarantees. If your EV has a major failure, you can reject it and choose a refund or a replacement. The dealer can’t force you to accept another repair instead. So when people search for lemon law Australia, the ACL is the answer, and it’s stronger than most buyers realise.

Getting a refund is a different matter. Owners who’ve gone through it describe months of unanswered emails, dealers who keep the car for “one more repair”, and fair trading offices that can’t compel anyone to do anything. Those stories have a common thread. The buyers who succeeded kept detailed records, rejected the car in writing and were prepared to go to a tribunal. The ones who struggled let the process drift.

This guide explains what counts as a major failure, how to reject a car properly, what it costs to take a dealer to a tribunal, and the mistakes that sink claims. It applies to any car, but EVs raise a few specific issues, from 12-volt battery drain to charging-unit faults. It’s general information, not legal advice. For the wider EV buying picture, start at our electric vehicles hub.

Is there a lemon law in Australia?

No national lemon law exists, but the ACL does the same job. It applies to new and used cars bought from a dealer, it can’t be signed away in a contract, and it can last longer than the manufacturer’s warranty.

The guarantees cover cars that cost up to $100,000. They also cover pricier cars normally bought for personal or household use, so a $120,000 EV bought as the family car is still protected. The threshold rose from $40,000 on 1 July 2021.

Queensland goes a step further. Since 1 September 2019, it has run a dedicated motor vehicle dispute process through QCAT, the Queensland Civil and Administrative Tribunal, for claims up to $100,000 against licensed dealers. That’s the closest thing Australia has to a formal lemon law.

Other countries do it differently. US states set a fixed number of repair attempts before a car is a lemon. Australia doesn’t. That’s frustrating when you want a clear rule, but it also means there’s no magic number a dealer can hide behind.

What counts as a major failure on a car?

A major failure is a fault serious enough that you’re entitled to reject the car. Under section 260 of the ACL, a failure is major if any one of these applies:

1. A reasonable buyer who knew about the fault wouldn’t have bought the car.
2. The car is significantly different from its description or the demo you drove.
3. It’s substantially unfit for normal use and can’t easily be fixed within a reasonable time.
4. It’s unfit for a specific purpose you told the dealer about, such as towing a caravan, and can’t easily be fixed.
5. It’s unsafe.

The ACCC gives braking and steering faults as examples of unsafe failures. For an EV, a car that loses drive power on the road, or won’t unlock or start, can reasonably fall into the same territory.

Repeated faults matter too. Since December 2020, several minor failures can together count as a major failure, even if they’re different problems and even if each was repaired. A car that has been back to the dealer a dozen times for different issues may qualify as a whole, even though no single fault would.

A minor failure is one that can be fixed within a reasonable time. For those, the dealer chooses: repair it or refund you. If the dealer refuses or takes too long, a minor failure can become grounds to reject the car.

How to reject a faulty car under the Australian Consumer Law

You reject a car by telling the dealer in writing that you’re rejecting it for a major failure and stating the remedy you want. That letter is the step most owners skip, and it’s the one tribunals look for.

Start with the right target. Your claim for a refund or replacement is against the dealer that sold you the car. The manufacturer must reimburse the dealer by law, so the dealer can’t push you off to head office. You can also claim damages directly from the manufacturer within three years of the fault becoming apparent, but that route pays compensation, not a refund.

Build the evidence file before you send anything. Keep every job card, invoice and roadside callout record. Photograph every warning message on the dash. Log each day the car was unusable. Put all contact in email, and confirm phone calls by email afterwards.

Get an independent report if the fault is intermittent. Intermittent EV faults are hard to prove, because the dealer often can’t reproduce them in the workshop. A report from a qualified technician or engineer turns “the customer says” into evidence. Owners who skipped this step report losing at tribunal.

Then write the rejection letter. Name the Australian Consumer Law. List the faults and repair dates. Say which major failure test applies. State that you’re rejecting the car and whether you want a refund or a replacement. Set a reasonable deadline, such as 14 days, and keep proof of delivery.

A real NCAT case shows the pattern. In 2025, NCAT ordered a dealer to refund $60,294.98 for a 2022 Mitsubishi Outlander that had been back to the dealer at least 12 times in 18 months (NCAT, 2025). The owner had sent a written letter of demand rejecting the car before lodging the claim.

The traps that sink claims

Most failed claims trip on timing, evidence or access. These are the ones to avoid.

Waiting too long. Your right to reject lasts for the “rejection period”, meaning the time in which it would be reasonable for the fault to show, based on the type of car and how it’s used. In a 2020 QCAT case, an owner who waited more than five months after the fault appeared to ask for a refund was found to be out of time. Act once it’s clear the fault is serious.

Letting one more repair fix it. If you keep handing the car back after rejecting it, and a repair finally works, you may lose the grounds for a refund based on that fault. Once you’ve rejected the car, any further repair should be your choice, agreed in writing and without giving up your rejection.

Refusing the dealer access. The opposite mistake also costs people. In another 2020 QCAT case, an owner who wouldn’t let the dealer investigate further lost a claim for repair costs. Let the dealer inspect the car, but put your rejection on the record first.

Accepting a partial refund. Dealers sometimes offer a refund minus a charge for kilometres or depreciation. The ACCC says the ACL doesn’t allow that after a major failure. Mazda paid an $11.5 million penalty in 2024 after the Federal Court found it misled owners of faulty cars about their right to a refund or replacement at no cost (ACCC, 2024). In the NCAT case above, the tribunal deducted only the registration and CTP the owner had already used.

Forgetting the finance. If the dealer arranged your car loan, the lender is jointly responsible with the dealer under the ACL. Rejecting the car means you shouldn’t keep paying on it. If you organised the finance yourself, the loan stays separate, so get advice before you stop payments.

How much does it cost to take a dealer to a tribunal?

Tribunal fees are low compared with the value of a car. Here’s what each of the three biggest states charges, as of October 2026.

State	Tribunal	Claim limit for car disputes	Application fee
NSW	NCAT	Up to $100,000; new car purchase disputes have no cap	$64 (to $10k), $133 ($10k to $30k), $344 (over $30k)
Victoria	VCAT	No set cap for goods and services claims	$67.40 (to $15k), $222.80 (over $15k)
Queensland	QCAT	Up to $100,000 against licensed dealers	$144.50 ($1k to $10k), $405.60 (over $10k)

Sources: NSW Government vehicle dispute guide and NCAT fee schedule (from 1 July 2026); VCAT goods and services (from 1 July 2026); QCAT motor vehicle disputes (updated August 2026). Reduced fees are available for some applicants.

The fee is the easy part. Time is the real cost. The Australian Automotive Dealer Association’s 2026 review found tribunal hearings taking 12 to 18 months. In NSW, you must apply within three years of the problem starting.

Fair trading is the usual first stop. NSW Fair Trading, Consumer Affairs Victoria and the Queensland Office of Fair Trading run free, voluntary mediation. Owners often find this disappointing, because a fair trading office can’t order a refund or make a dealer take the car back. It’s still worth doing. A formal complaint often gets the first written reply from a dealer who’s been ignoring you, and it shows the tribunal you tried to settle.

A letter of demand from a solicitor is the step between the two. It costs money, but dealers tend to take a lawyer’s letter that cites the ACL more seriously than a customer email.

Why EV owners run into this more often

EVs fail differently from petrol cars, and the after-sales system hasn’t caught up. Three issues come up again and again.

12-volt battery drain. EVs still use a small 12-volt battery to wake the car’s computers and unlock the doors. If it goes flat, a car with a full high-voltage battery can be dead in the driveway. The cause might be a faulty 12-volt battery, an accessory such as a GPS tracker, or a fault in the system that keeps it charged. Our EV 12V battery guide explains how the system works.

Charging-unit faults on Hyundai, Kia and Genesis. The integrated charging control unit (ICCU) is the part that charges both the high-voltage and 12-volt batteries on Hyundai Motor Group’s E-GMP EVs. A common symptom of ICCU trouble is a 12-volt battery that stops being topped up. Australian recalls cover 3,566 IONIQ 5 and IONIQ 6 cars and 4,551 Kia EV6s built from 2021 to 2024, with a software update or ICCU replacement as the fix (vehiclerecalls.gov.au). Hyundai, Kia and Genesis have also extended ICCU warranty cover in Australia to 15 years or 300,000 km for affected models, according to Drive. The Kia EV9 isn’t in that extended cover, so EV9 owners rely on the standard warranty and the ACL.

Parts and approval delays. Many EV parts are shipped from overseas, and some brands route warranty claims through head office. The AADA’s 2026 review found manufacturers taking six to eight weeks to handle dealer claims. Every week your car sits in a workshop strengthens the “can’t be fixed within a reasonable time” argument, so log it. Our guide to EV warranty repair delays covers this in more detail.

The scale of the problem isn’t new. An ACCC market study in 2017 recorded more than 10,000 complaints about new car makers over two years (ACCC, 2017). Penalties have followed: Ford paid $10 million in 2018 for its handling of PowerShift gearbox complaints, and Mazda paid $11.5 million in 2024.

Is reform coming?

Some reform is on the way, but it won’t help a claim you’re making today. In November 2025, Australia’s consumer affairs ministers agreed to introduce civil penalties for businesses that fail to provide a consumer guarantee remedy, according to Treasury. At the moment, refusing a valid refund carries no fine on its own. We found no draft legislation published as of October 2026.

Dealers want change too. The AADA review, led by UNSW emeritus professor Jenny Buchan, argues that manufacturers should have to join consumer claims earlier, because dealers carry the legal obligation while waiting on manufacturers for parts and approvals.

None of this changes your rights now. The ACL already entitles you to reject a car with a major failure. The ACCC’s guide to new and second-hand cars sets out the rules in plain terms, and it’s worth printing a copy for the dealership. If you end up shopping for a replacement, line up the options in our EV compare tool, and check each brand’s cover in our EV battery warranty guide.