Australia's #1 for Law

Join 150,000 Australians every month. Ask a question, respond to a question and better understand the law today!

NSW Lemon Car - Australian Consumer Law Rights and Dealer Obligations?

Discussion in 'Australian Consumer Law Forum' started by mphi, 26 February 2016.

  1. mphi

    mphi Member

    26 February 2016
    Likes Received:

    I am currently researching as to what my rights are after having purchased a potentially "Lemon Car" from an NSW car dealer. I was directed to this forum after reading the following article:

    Lemon Car? What You Can Do Under Australian Consumer Law - Legal Blog -

    My situation is as follows -
    • 2 days ago I purchased a VX Commodore for $3100 with 184000 km. I was, of course, told before purchasing that "it is a very good car and roadworthy".
    • I was given a 6 month Pink Slip with a "pass" issued for the vehicle the day before purchase.
    • I received a 12-month warranty from 'National Warranty Company
    • The mechanic changed the catalytic converter for me as there was a major rattle during the first inspection
    Immediately after purchase, I drove the car to a Holden dealer for servicing and inspection for a total of $490. My issues returned are as follows:
    • Engine mounts need immediate replacing
    • 2 Rear tyeares are gone
    • Rocker cover, valley gaskets and rear main seal are badly leaking engine oil
    • Wheel alignment
    • Both rear shock absorbers need replacing
    • Passenger side drives shaft
    • Steering rack
    • Front brake pads and discs need replacing
    • Rear brake discs need replacing
    • Power steering high-pressure hose
    • Sump plug badly damaged
    • One headlight is out
    I was told that the first 3 points mean the car is not roadworthy. I was quoted around $6000 from Holden for overall repairs.

    The following day I went to my local mechanic and have been guaranteed a much lower price than Holden (this is currently in negotiation for quote). This mechanic has also stated that the car is not road worthy and also stated that the brake discs and pads are in terrible condition and need immediate replacement. I was informed that I would be defected by police for my issues if pulled over.

    The car has become very 'clanky' with having driven it under 80kms only to and from mechanics and service centre. It feels and sounds as if the engine is going to fall out from under me and there are progressively louder clanks at all 4 wheels.

    The contract I signed with the dealer states:

    "This vehicle has no dealer guarantee under the Motor Dealers and Repairers Act 2013
    The dealer is not required by the Act to repair or make good any defect which may exist or occur in this vehicle. A current inspection report for the motor vehicle is attached to this form"

    Note: This vehicle comes with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure."

    So, my question is - what am I entitled to have the dealer repair? Am I protected by Australian Consumer Law for any of the defects?

    I assume that reasonable wear and tear for age is acceptable, but I assume that defects on the car are not acceptable?

    I look forward to a response.
  2. Sophea

    Sophea Guest

    Hi mphi,

    Yes, you are entitled to the warranties set out by Australian Consumer Law. These apply no matter what a contract says and cannot be excluded. What you will be entitled to under those laws depends on whether your situation amounts to a minor or major failure to comply with certain warranties - namely that the goods that were sold to you be of acceptable quality and fit for your purposes.

    There may also be issues of misleading and deceptive conduct where they have represented that the vehicle was roadworthy and in good mechanical condition when it wasn't.

    You would also be covered under any additional warranty that you purchased. I would be going back to the dealer and demanding either a refund for the vehicle (and returning it) or compensation for the cost of the repairs that were required in order to get it into the condition that it was represented to be in at the time of sale.

    Check out these articles and other posts: Faulty Second Hand Car? Your Options as a Buyer - Legal Blog -
    Consumer Protection: What To Do If Your Australian Consumer Law Guarantees Are Breached - Legal Blog -
    QLD - Bought Lemon Car from Used Car Dealership - Australian Consumer Law? |
  3. mphi

    mphi Member

    26 February 2016
    Likes Received:
    Hi Sophea,

    Thank you for your response.

    I have since contacted the dealer and kindly asked for the car to be repaired to a roadworthy condition. I am waiting to speak to them about the details tomorrow.

    I have also phoned Fair Trading and received advice comparable to what you have told me. I am trying to figure out if I am entitled to have the dealer repair any of the other issues with the car also. I am not trying to get extra repairs from them, just what I am entitled to.

    In relation to the 12-month warranty, I have received; they have told me that they will not be involved with any pre-existing condition that the car had before my purchase.

    Is there a document that defines a "major failure" and a "minor failure" for vehicles? This will help me ascertain my position more precisely.

    I will respond with an outcome when resolved, which will hopefully stay between myself and the dealer.

    Thanks for the links, I will read those also.

    All the best
  4. Sophea

    Sophea Guest

  5. mphi

    mphi Member

    26 February 2016
    Likes Received:
    Great. That document was perfect.

    I have contacted the dealer in a friendly manner and had no problems securing the repairs at the dealers expense. The repairs that the dealer is covering are for the defects, which I have previously mentioned as "the first 3 points" from my repairs list.

    I will be asking for a report or receipt of some sort and then having the repairs checked by my local mechanic when I repair the other issues with the car.

    I'll post the outcome when all is sorted over the next week.

    Thank you for your assistance.

Share This Page