NSW Car with Faulty Transmission from Volkswagen Dealership?

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29 August 2016

I bought a brand new car from Volkswagen dealership in February. Since then, the car has had two major stops. The first time was on 4 July & 28 July and gave error messages along the lines of "Gearbox not available"...

So I called Volkswagen Assist and they sent an Electrician. He said I need to take the car back to the Volkswagen service centre as soon as possible as it was unsafe for me to drive the car. So I took the car home and I towed it to them the following day. They had it checked and assessed, but they called me after a few days and said that they can't seem to identify the problem and that I come and pick up the car.

The second time it stopped with the same problem and the Volkswagen Electrician which was sent by Volkswagen Assist said it was the Gearbox and I should get it towed straight to Volkswagen service, so he organised the tow truck.

It was 11:00pm when the tow truck arrived. He picked up the car and was going to tow it the following day. After two days, which I believe was (Friday), the service team inspected the car and they told that they can't identify the problem and they sent a copy of the report to Volkswagen head office for reviewing.

On Monday, I rang to see if they received a reply, but they said not yet, and that they would ring me back on Tuesday. So they rang or I rang, I don't remember and they said that the transmission had to be replaced, so I told them as it is a major fault, I don't want the transmission. In fact I want a full refund as the car was not performing to it standard. They advised I should speak to Volkswagen Sales or head office, which I did but they refused.

I also lodged an application with the Office of Fair Trading and the person that was in charge of my case left a couple of message for them to call back, but ignored him so he went to Volkswagen Liverpool, which is where I bought the car from and spoke to the Manager. He refused by request of a refund.

The Fair Trading Representative advised I should to Tribunal. I have lodge an application and I just want to know what my Legal Rights are under Australian Consumer Law.

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Hi Viv,

Sounds like you have followed the correct procedure in trying to resolve this. Your rights under the Australian Consumer Law are as follows:

The Australian Consumer Law, contains about 9 consumer guarantees that apply to new and used motor vehicles sold. These are guarantees that manufacturers and suppliers must make to consumers when selling vehicles. One of these guarantees is that motor vehicles sold 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. that the car was new and only 6 months old etc)

I think you could definitely argue here that the vehicle you purchased was not free from defects, nor durable, nor fit for your purposes (requiring a reliable car), nor safe (based on the advice of the auto electrician not to drive your vehicle when the warning light came on).

The remedy that you are seeking is a full refund for the vehicle as well as any associated costs you incurred such as towing, vehicle storage etc. If there is a major failure to comply with the consumer guarantees (which you are alleging) - you are entitled to a refund or repair - you can choose. In order for you to establish legally that this was 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. An example used in the ACCC guide on the ACL with respect to vehicle sales and repairs is 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. I have attached the link to this publication at the bottom of my comments.

All of the above should be set out in your claim - touching on facts that establish (1) you were owed a guarantee of acceptable quality (2) that guarantee was not adhered to by the dealer (3) there was a major failure to adhere to that guarantee

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. Hopefully yours may set us a few precedents in this regard!

Good luck!

https://www.accc.gov.au/system/files/Motor vehicle sales & repairs - an industry guide to the Australian Consumer Law.pdf