It is important before you sign any contract documents that you take time to read the terms and conditions and that you understand what you are signing.

The Joneses (not their real names) went to a dealership and bought a second-hand car under finance.  They advised the salesperson of the interest rate they could afford to pay for any finance contract.  Finance and insurance were approved instantly for them and they paid the deposit for the car.

The next day, the Joneses called the salesperson to re-negotiate the for smaller weekly repayment amounts. The salesperson agreed and proceeded to remove some extras that had been included in the original contract; and also extended the contract period and changed the interest rate.  The salesperson did not advise the Joneses of the extension of the contract period or of the new interest rate.

A week later, the Joneses went to collect the car. The salesperson confirmed the new weekly repayments but did not say anything about the extended contract period, or about the new interest rate.  The Joneses signed the contract without reading it. They simply relied on what they understood the salesperson to have said.

Later, the Joneses found out that the contract period had been extended and the interest rate was much higher than they had originally discussed with the salesperson.

They approached CCLS, who negotiated with the dealership on their behalf for a new contract.

While the outcome for the Joneses was positive and the dealership agreed to a new contract, not every situation has such a positive outcome.

It is essential that you read any contract before you sign it and make sure that the terms and conditions of the contract are as you understand them to be.

If you require advice on a credit or consumer matter, please call Consumer Credit Legal Service on (08) 9221 7066 for a free, confidential discussion. Our telephone advice line is open Monday to Friday (except public holidays) from 9am to 4pm.