Bought a lemon car? Know your consumer rights
Buyer beware: Australia is having car problems.
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Lemon cars are hidden in dealerships and classifieds, waiting for an unsuspecting buyer to drive away before eating them alive with repair costs and breakdowns, sometimes just days after purchase. A recent report has shown that this is incredibly common and that even though Australians are entitled to consumer protection and free repairs or replacements under Australian law, many dealers are brushing them off and denying them their consumer rights. This guide takes you through the details uncovered by the report, and what you can do if you’ve bought a junker without knowing it.
What's in this guide?
How much do new car problems cost?The cost of buying a lemon is high, in both time and money.
- $858: The average direct cost of fixing new car problems
- 31 hours: The average amount of time spent trying to fix the problem
- $1,295.25: The total average cost of fixing new car problems, factoring in both time and money
Are there any brands that are worse than others?
What kind of car problems are people having?
If you really don’t want to run the risk of new car troubles you can keep things simple by avoiding in-car electronics, keeping aftermarket additions to a minimum and giving the car a thorough check before buying. Car problems also encompass issues not disclosed by the seller. If you’re buying a car privately, it’s worth considering the most common issues that arise.
- Undisclosed accident damage: Sellers don’t always disclose previous accident damage, and sometimes repairs are strictly cosmetic. This can have a significant impact on whether you’ll need to make unexpected repairs shortly after buying a used car.
- Odometer fraud: Unscrupulous sellers might roll back the odometer to make it look like the car is less used than it actually is. One of the ways to spot this is by comparing the odometer against the car’s service record, but inconsistencies between the odometer and car wear and tear can also be a giveaway.
- Not providing all documentation: About 1% of buyers had problems with sellers failing to provide all required documentation.
What happens when you take car problems to a dealer?
- 50% of people who went to their dealers with car problems were only somewhat satisfied with the response
- 36% of new car owners were very satisfied with their dealer’s response to problems
- 24% of new car owners were dissatisfied with their dealer’s response to problems
Most buyers were very happy, or at least somewhat satisfied, with their dealer’s response to car problems. However, about a quarter of people had a very different experience, and many of them reported that their car dealers were using the same dirty tricks to avoid acknowledging problems until the warranty expired.
|What they say||"It's nothing to worry about."||"The problem will fix itself."||"Trust us. We're professionals."|
|What it means||Another delaying strategy. Some customers have even been told that serious issues like an inaccurate speedometer are “common to all cars” or just “a small problem”.||Customers are being told that they just need some time to get the feel of the car, or that different parts need to “settle in”. These delaying tactics are commonly reported ways for dealers to hold out until the warranty has expired.||More Australians are left very satisfied than dissatisfied by car dealers, and odds are you have a reliable and trustworthy provider. However, the survey has shown that this is unfortunately not the case at least a quarter of the time.|
What’s the best way to fix new car problems?
- 94% of people with new car problems look for a solution, and 73% are satisfied with the response they get.
- 67% of people who look for solutions go to their car dealer first.
- 15% of those who go to car dealers are unable to resolve the problem. There’s a gender difference here, with women marginally less likely than men (13% to 17%) to have the problem solved.
- 16% of people with new car problems were asked to, or did, sign a non-disclosure agreement as a condition of the repairs.
One of the most important facts to consider is that most of the new cars with problems (more than 70%) were covered fully or partially by the warranty.
Free repairs, free replacements: Your consumer rights
If you’re having problems with a new car you bought from a dealer, you are probably entitled to free repairs, replacements or a refund under Australian law. If you buy something in Australia that’s covered by a consumer guarantee it means you are entitled to a refund or repair replacement if it doesn’t work as it should.
- All vehicles purchased from a dealer for personal or household use are covered by consumer guarantees.
- Vehicles purchased for business use are covered, as long as they are mainly used to transport goods.
More specifically, a car must be able to:
- Do what the dealer says it can
- Meet any promises of performance, quality, lifespan or condition
- Not come with hidden costs or other expenses
If it doesn’t, then you may be entitled to repairs, a replacement or a refund from the retailer (the car dealer).
- In case of inherent manufacturing defects, you may be entitled to compensation from the manufacturer.
- You are also covered by the terms of any currently applicable warranty.
- Comprehensive car insurance can pay the cost of many forms of vehicle damage, even when it’s no longer a new car, or any specific defect.
I’m having car troubles. Can I get repairs, a replacement or a refund?
How to launch a consumer complaint
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Car Loan OffersImportant Information*
You'll receive a fixed rate of 4.99% p.a.
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A larger loan of $5,000 or more to help you buy a new or used car. 5-hour pre approval available and no ongoing fees.
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