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VIC Brand New Car with Major Fault - Ask for a Refund?

Discussion in 'Australian Consumer Law Forum' started by Wayne Downes, 30 August 2016.

  1. Wayne Downes

    Wayne Downes Member

    30 August 2016
    Likes Received:
    I have a 2 1/2-year-old car that I purchased brand new sitting at the dealership (now for 40 days) awaiting repairs to the engine which I read is a major fault. Am I well within my rights to request a refund under Australian Consumer Law?
  2. Sophea

    Sophea Guest

    Hi Wayne,

    Let me just give you a run down on what your entitlements are and where your rights to a refund would come from under the ACL (Australian Consumer Law). There are numerous consumer guarantees, applying to new and used motor vehicles sold. One of these is that manufacturers and suppliers of vehicles must guarantee that motor vehicles they sell are of acceptable quality.

    The test for acceptable quality is whether a reasonable consumer, fully aware of a motor vehicle’s condition (including any defects) would find it:
    • fit for all the purposes for which vehicles of that kind are commonly supplied
    • acceptable in appearance and finish
    • free from defects
    • safe
    • durable.

    This test takes into account the nature of the motor vehicle and other factors (i.e. whether car is new or used, 4WD or 2WD etc)

    Where there is a major failure to comply with the consumer guarantees, - you are entitled to a refund or repair - you can choose. However in order for it to be a major failure - it must have been such that a reasonable person would not have purchased the car if they had known the full extent of the issue. One example would include if a new car had so many recurring problems that the car spends more time off road than on road because mechanics unable to fix it.

    There have been a few cases decided in this area, however there is nothing touching precisely on when a court would be inclined to decide there has been a major failure in respect of a new vehicle.

    You could start by making a formal written demand to the dealership requesting a refund, but its likely they will want to fight it. You will probably end up needing to institute proceedings in VCAT for breach of consumer guarantees.

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