If you’re thinking about selling your car but it’s under recall, you’re not alone in wondering what the legalities are. Vehicle recalls are more common than you might think, but they can complicate the selling process. Whether you’re a private seller or a dealership, it’s crucial to understand your legal responsibilities and best practices when dealing with a car under recall in Australia.
What is a Vehicle Recall?
A vehicle recall is issued when a manufacturer identifies a safety-related defect or non-compliance with mandatory standards in a car. Recalls are meant to protect drivers, passengers, and road users by ensuring that faulty vehicles are repaired or replaced. High-profile recalls have affected millions of vehicles in Australia, including brands like Toyota, Honda, Ford, and Volkswagen.
Common Reasons for Vehicle Recalls:
- Faulty airbags (e.g. the Takata airbag recall)
- Brake system failures
- Fuel leaks
- Fire risks
- Electrical malfunctions
Can You Sell a Car with a Recall in Australia?
Selling a car with an open recall in Australia is legal as long as the buyer is fully informed and the vehicle remains roadworthy. Selling a defective car without disclosure can breach Australian Consumer Law, leading to serious legal consequences.
Private vs. Dealer Sales
- Private sellers are still obligated to disclose known defects, including open recalls.
- Dealerships must ensure that any vehicle sold is free of known safety defects or clearly notify buyers of any outstanding recall work.
Vehicle Recall Laws in Australia
Vehicle recalls in Australia are governed primarily by the Australian Consumer Law (ACL), which is enforced by the Australian Competition and Consumer Commission (ACCC). These laws ensure that manufacturers and suppliers uphold their obligations to provide safe products, including motor vehicles.
Key points under Australian Consumer Law:
- Vehicles must be of acceptable quality, safe, and fit for purpose.
- If a vehicle has a safety defect, the manufacturer is required to take action, usually through a manufacturer recall.
- Repairs must be provided free of charge, and owners must be notified promptly and clearly.
- In some cases, where a repair is not possible or timely, the owner may be entitled to a refund, replacement, or compensation.
Manufacturer Recall Obligations:
- Notify the ACCC and affected customers as soon as a defect is identified.
- Publish clear information about the recall, including the risks and remedy.
- Supply the necessary parts and repairs at no cost to vehicle owners.
- Maintain a database of affected vehicles and track which ones have received repairs.
Open Vehicle Recalls and Sales
The ACL doesn’t outright ban the resale of a car with an open recall, but sellers must not mislead buyers. Under consumer law, withholding information about a known recall, especially that affecting safety, can be considered deceptive.
Car Recall Laws and Penalties
Failure to comply with recall laws can result in:
- Fines and legal action for manufacturers, dealers, or private sellers.
- Product bans or mandatory recalls enforced by the ACCC.
- Civil penalties for misleading or deceptive conduct.
It is important to keep in mind that the ACCC also monitors the effectiveness of recall actions and can take further enforcement steps if a recall is not conducted correctly.
Is It Legal to Sell a New Car with a Recall?
Selling a brand-new car with an open recall raises legal and ethical concerns. While it is technically possible in some circumstances, doing so without disclosure can breach Australian Consumer Law (ACL), especially if the recall involves a safety-related defect.
Responsibilities of Dealers and Manufacturers
Both car manufacturers and dealerships have legal obligations under the ACL:
- Manufacturers are responsible for identifying defects, notifying the public and the ACCC, and offering a repair, replacement, or refund.
- Dealerships must ensure any vehicle sold is safe, roadworthy, and free of known defects, including unresolved recall issues, unless clearly disclosed to the buyer.
Even if a car has never been driven and is listed for sale with an open recall, both parties must be transparent about the issue.
Can a Dealership Sell a Car with an Open Recall?
In most cases, reputable dealerships will not sell a car with an open recall until the issue is resolved. Selling a defective or unsafe vehicle (even one that’s brand new) can be considered misleading or deceptive conduct under the ACL.
However, if a dealership does sell such a vehicle, it must:
- Inform the buyer of the recall and associated risks.
- Arrange the repair as a condition of sale or shortly after delivery.
- Provide clear documentation of the recall status and scheduled repair.
Consumer Rights if a New Car Has an Active Recall
If you purchase a new car with an unresolved recall, you’re protected under car recall laws and ACL guarantees. As a consumer, you may be entitled to:
- A free and timely repair from the manufacturer.
- A full refund or replacement vehicle if the defect is considered a major fault or cannot be fixed within a reasonable time.
- Compensation for additional losses, such as towing fees, loss of income, or temporary transport costs.
What Happens if My Car Is Recalled and Can’t Be Fixed?
Some recalls don’t have an immediate fix available, for example, if replacement parts are in short supply. In these cases, options may include:
- Manufacturer buybacks (especially for severe safety issues)
- Temporary remedies (e.g., software updates or usage limitations)
- Compensation for loss of use or value
If a fix isn’t available and you’re unable to safely drive or sell the car, contact the manufacturer or ACCC for guidance.
Selling a Car with an Open Recall: Risks and Considerations
While selling a recalled car is not illegal, it can be risky, especially if the process is not handled properly.
Key risks:
- Legal liability if a buyer is injured due to the defect
- Reduced resale value
- Failed roadworthy inspections
To reduce your risk:
- Be transparent about the recall.
- Provide documentation of any completed or pending repairs.
- Consider delaying the sale until repairs are finalised.
How to Check for Recalls Before Selling Your Car
Before listing your vehicle, it’s wise to check for any open vehicle recalls, especially if you’ve owned the car for several years.
Where to check:
- Vehicle Recalls
- Manufacturer websites (using your VIN)
- Service centres or dealerships
You can also ask for a recall clearance certificate from an authorised repairer once the work is complete.
Steps to Take Before Selling a Recalled Car
- Check recall status using the VIN.
- Book the vehicle in for recall repairs — these are free.
- Keep documentation of completed repairs.
- Disclose recall history to potential buyers.
- Sell through a dealership if you’re unsure how to handle it — they have recall processes in place.
Conclusion and Final Advice
Selling a car with an open recall in Australia is possible, but it requires transparency, compliance, and a bit of due diligence. Check your car’s recall status, organise necessary repairs, and always inform the buyer. For peace of mind, handle any recall work before listing your vehicle, as it improves safety, protects your legal interests, and ensures a smoother sale.
If you’re looking to sell your car, an instant online offer from CarBuyers can make the process stress-free and straightforward. There’s no waiting or back-and-forth—just a fast, fair quote and quick payment.
Frequently Asked Questions
Will a car with a recall fail a roadworthy test?
Not necessarily. A recall doesn’t automatically cause a roadworthy failure, but if the defect affects safety or function, it may be flagged during inspection.
Can I return my car to the dealership if it has a recall?
Yes, if the defect is major or cannot be fixed promptly, you may be entitled to a refund, replacement, or compensation under consumer guarantees.
How long do manufacturers have to fix a recalled car?
There’s no set timeframe, but repairs must be done within a reasonable time under Australian Consumer Law. Delays may entitle you to further remedies.
Will a recall lower my car’s resale value?
It can, especially if the recall is unresolved. Repaired recalls usually have little impact if appropriately documented.
Are there penalties for selling a recalled car without disclosing it?
Yes. Under Australian consumer law, failing to disclose a recall can be considered misleading or deceptive. Penalties may include fines, legal action, and compensation claims from the buyer.
