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The new car blues

27th November, 2018

This is the cautionary tale of an unpleasant, but ultimately positive, experience an ADF member (one of our education team) recently had with a new car purchase.  We think it demonstrates nicely the rights of consumers under our national laws, the shortcomings of manufacturers’ warranties and the power of persistence.

There’s no doubt that one of the main advantages of buying a brand-new car is seen as the warranty offered by the manufacturer. We’re comforted by the expectation that if anything goes wrong within the warranty period of say, three, five or even seven years from the date of purchase, the manufacturer will pay for the repair.

Less well-known are the rights of new car owners under the Australian Consumer Law and other State and Territory consumer protection laws. These rights can often be more powerful than the manufacturer’s new car warranty and have the advantage that they can be indefinite.

The member in our story purchased a car in 2016 with a three-year new car manufacturer’s warranty. One year on, the car’s engine unexpectedly lost all of its power on a busy expressway causing some consternation. After a few moments, the power returned to the engine and all was well. The member drove the car to the authorised dealer who attached a diagnostic computer to the engine. No ‘fault code’ was detected. The dealer claimed to have updated the software and the owner drove the car home.  Problem solved – or so our member thought…

But the problem kept happening producing some frightening driving experiences. On each occasion the dealer tested the car, found no fault code and then claimed there was nothing wrong with the car. That was until the dealer’s representative experienced the fault during a test drive and finally admitted it was disturbing and potentially dangerous.

Even though a major fault had been experienced now by the member and the dealer, the manufacturer was still loath to admit any liability under the factory warranty, apparently due the lack of a fault code.

On enquiry to the NSW Office of Fair Trading, the member was informed of his significant rights under the Australian Consumer Law (ACL). In summary, the problem amounted to what the ACL consumer guarantees define as a ‘major failure’.  This meant that the member was entitled to demand that the manufacturer repair the car, offer a refund or give him a brand-new vehicle. Importantly, these remedies are at the option of the consumer, not the manufacturer or retailer (or dealer).

The member was willing to allow the manufacturer to attempt to repair the car, but because no fault code could be detected, a permanent repair could not be guaranteed. The dealer made numerous failed attempts. After several exchanges of correspondence with the manufacturer, the member demanded a brand-new car, noting to the manufacturer that the dealer had experienced the major failure. An agreement was finally reached and a new car was delivered to the member some six months from the commencement of the saga.

Of course, this process was not simple or straightforward, but thanks to the Australian Consumer Law, the member’s knowledge of his rights and persistence, a positive outcome occurred. Remember that the laws outlined in this article apply to other goods purchased from a business in Australia. Cars are often difficult to deal with because of the large amounts of money involved. Nevertheless, if you know your rights and you exercise them with patience, perseverance and persistence, a good result will hopefully follow.

For more information on your consumer rights see the official Australian Consumer Law website or contact your state or territory’s consumer protection agency.

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