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WA Replace Timing Chains after Car Warranty Expiry?

Discussion in 'Australian Consumer Law Forum' started by meg, 24 July 2014.

  1. meg

    meg Member

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    Hi,
    We purchased a new car in 2009. In June this year, on the 16th day, outside the new car warranty, the timing chain broke, causing considerable damage to the motor. Timing chains, as opposed to timing belts, are considered to last the life of the motor. Servicing and/or replacing the timing chain is not listed at all in the service manual for the car. The car was fully maintained by authorized service centres. The 1987 Trade Practices Act specifies a test for 'reasonableness' in instances such as this, where the warranty has expired. The manufacturer has refused to refund the cost of repair, or contribute toward it. Is our case considered worthy of taking to a Magistrates court under Australian Consumer Law?
     
  2. Sarah J

    Sarah J Well-Known Member

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    Hi Meg,

    There is a distinction between a "warranty" and a "statutory guarantee (sometimes known as a consumer guarantee)". A warranty is a voluntary guarantee undertaken by the supplier (or seller). It usually has a time limit. This voluntary undertaking, once made, either expressly or impliedly, is considered a statutory guarantee at law and is enforceable under Australian Consumer Law, or where bought prior to 2011, Australian consumer law under the Trade Practices Act 1987.

    The warranty expires once the time limit expires and can no longer be enforced as a warranty unless the seller otherwise agrees. The reason why it appears in some cases that promises to repair are enforceable after a warranty time limit is because that particular promise is also a statutory guarantee. There are limited statutory guarantees.

    In 2011, the Trade Practices Act 1987 was replaced by the Competition and Consumer Act 2010 (Cth). This is accompanied by the Australian Consumer Law ("ACL"), found in Schedule 2 of the Competition and Consumer Act. Both came into effect on 1 January 2011. The ACL broadened statutory guarantees so that they may overlap with some warranties. The good thing about statutory guarantees is that, in some cases, they demand more from sellers than what is offered under warranty and may last longer than the warranty.

    The most important (and relevant) statutory guarantee is ACL s 54 which lists guarantees as to acceptable quality. This means that, where a good is not sold by auction or private sale (ie. not by a garage sale), then it must be of acceptable quality, free from defects and satisfy durability standards. The key question is, how long will this statutory guarantee last for?

    Under ACL s 54(3), this will depend on a number of factors: the nature of the goods, the price sold/bought, circumstances around the sale, representations made by the manufacturer/seller. Certainly, the fact that timing chains are meant to last for the life of the motor will support your case. It is best to get this statement backed by a few mechanics or experts in the field. The timing between sale and fault will also be considered, but in relation to the nature and degree of the fault.

    Having said that, products bought prior to 2011 may not be governed by the ACL. Rather, there are a number of implied warranties (similar to statutory guarantees) that apply. These are similar to ACL s 54 but protect consumers to a lesser extent: products bought prior to January 2011. One noticeable difference is the lack of the explicit durability requirement.

    I advise you to contact the Australian Competition and Consumer Commission and enquire about the merits of your claim: https://www.accc.gov.au/contact-us. The ACCC may even assist you in resolving your dispute against your seller through free alternative dispute resolution mechanisms.

    Depending on their advice, you can decide whether it is worth making a claim in court.

    Some more helpful information from the ACCC:
    - Warranties in general: http://www.accc.gov.au/consumers/consumer-rights-guarantees/warranties
    - Warranties for products bought prior to 2011: http://www.accc.gov.au/publications/warranties-refunds-a-guide-for-consumers-and-business
    - Statutory guarantees under ACL: http://www.accc.gov.au/business/treating-customers-fairly/consumers-rights-obligations
     
    Gilly and John R like this.
  3. meg

    meg Member

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    Hi Sarah J

    Wow! Thank you very much - this is exactly the information I was looking for.
    In appreciation

    Meg
     
    John R likes this.

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