ACCC slams car retailers over shoddy practices

Angus Kidman 10 August 2017

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The regulator says the industry is dodging its consumer obligations and has generated 10,000 complaints in two years.

The Australian Competition and Consumer Commission (ACCC) has slammed the car sales industry in Australia, calling for new rules that will ensure a more competitive market for car servicing and for more accurate information on fuel consumption.

"The ACCC is deeply concerned about the level of non-compliance with the Australian Consumer Law in the new car industry," ACCC chairman Rod Sims said. "We will continue to take action to address failures by car manufacturers and retailers to provide the remedies to which consumers are entitled."

More than 10,000 complaints about new car purchases and service have been received by the ACCC in the last two years.

In a draft report on the industry, the ACCC says that the typical statements found in many new car service manuals that state that warranties will only be valid if the car is serviced by an "authorised" mechanic potentially violate the Australian Consumer Law (ACL). Under that law, consumers are entitled to free repairs for minor failures and may be entitled to a full refund if there's a major issue. But that rarely happens because of what the regulator calls a "culture of repair" that dominates the industry.

The regulator is also concerned that car manufacturers are still not sharing technical information about cars with independent repairers, which means it can be difficult for car owners to shop around for service deals. In 2014, the car industry undertook to make the same information available to independent repairers that it supplied to its authorised dealers, but the process appears to have stalled.

"Car manufacturers should be required to share new cars' technical information with independent repairers," Sims said. "For new cars to be properly repaired and serviced, independent repairers need access to electronic information and data produced by car manufacturers."

Another area of concern is that fuel consumption and emissions information is not accurate. Australian Automobile Association research suggests that real-world fuel consumption is often 25% higher than the lab test results which are promoted with new cars.

A final version of the report is due out later in the year, but the ACCC has already begun taking action in this area. Last month, it launched legal action against Ford over its repair and refund policies.

While a car is one of the biggest purchases we make, Australians find the experience deeply unpleasant. If you are purchasing a new car, make sure you've shopped around to get the best deal rather than simply settling for dealer finance.

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