NSW Returning used car to dealer after breakdown in two weeks

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14 February 2020
The car I bought from a Sydney NSW dealer was completely undrivable within two weeks of purchasing. After initially agreeing to fix the car, the dealer has now reneged and wants me to pay half after getting a mechanic's report stating that it was not a pre-existing fault. I think I'm entitled to a refund under ACL but they are not budging. Judging by their conduct I don't think this their first time in this process so I'm worried they know something I don't.

- If there is a possibility that the fault arose in the 2 weeks, is it still a major fault under Australian consumer law?

Details below:

I purchased a 2005 4x4 passenger SUV with 200,000km for $5500 from the dealer in Sydney in January and within 2 weeks and 1300km (I moved out of Sydney to the north coast) it had a blown head gasket which followed a crack in the radiator.

The mechanic, in Byron Bay, who initially diagnosed it found evidence of a sealer which is used to stop leaks. As I had not used this product, if used, it must have been from prior to my ownership of the car.

I spoke with someone at the dealership who, after initially not believing that the car was not drive-able, agreed to transport the car to Sydney and replace the engine at their cost and said it would be done in a week of receiving. I had preferred a refund but reluctantly accepted as I wanted a relatively quick solution.

The dealer transported the car to Sydney. A mechanic there, organised by the dealer, confirmed the diagnosis. Once the car was back at the dealership the dealer then reneged on his agreement to pay for the repairs saying it had driven "2000km", was a new problem and therefore was not covered and I'd have to pay for it. I disagreed on the mileage and he sent me a made up figure which contradicted the odometer reading on his mechanic's report by 700km. I also reminded him of the agreement we had made prior that they would fix it. The mechanic's report also stated that the leak must have occurred after purchase which the dealer said was evidence that I was responsible for the repair.

I called the mechanic to get some more information. He told me that the car had overheated as a result of a crack in the radiator which caused the blown head gasket. I asked if it was possible that the crack existed before and was sealed temporarily using a sealer like the other mechanic had seen. In response he said that he "shouldn't even be talking to me." I reminded him that he was supposed to be an "independent" mechanic and I was the owner of the vehicle. He then said that a sealer may have been used but it would have been a new crack that caused the blown head gasket because "a sealer works or it doesn't. He said if it worked "it would never leak again", and therefore it must have been a new leak. This, however is not true according to another mechanic I spoke with. A sealer is only a temporary solution and the crack could re-emerge. So I don't see how their mechanic can say with certainty that the crack wasn't pre-existing. I'm also doubtful of their independence.

In any case, they refused to repair the car, which is now 800km away from me, unless I pay $1000. I had initially offered $700 just to get it done but I can't afford $1000 and I don't think I should be paying for any of it anyway. They told me that they would "see me at NCAT in a few months".

I've put in a complaint to Fair Trading and will follow the process. I've looked at some of the case law on austlii and there is a very similar case where the refund was denied because the applicant couldn't prove that the crack didn't occur during the drive from Sydney to the north coast. This is referring to:


262 When consumers are not entitled to reject goods

(1) A consumer is not entitled, under section 259, to notify a supplier of goods that the consumer rejects the goods if:

(c) the goods were damaged after being delivered to the consumer for reasons not related to their state or condition at the time of supply;

It's a possibility that this was a brand new leak, but it's also possible that the leak was existing. How are these likelihoods weighed up?

To me, the fact that the car is undrivable within 2 weeks means that it is of unacceptable quality and had I known I wouldn't have purchased it.

Sorry for the extra long post - I hope someone can help.

John R

Well-Known Member
14 April 2014
1. I agree that the used car dealer is unlikely to agree to a full refund under ACL because (a) they don't have to and (b) they know that you don't have evidence to support the pre-existing fault.
2. Given the car is older than 10 years and travelled more than 160,000 km, no statutory warranty (presently 3 months or 5,000 km) applies.
3. NCAT assessment is likely to consider "what is reasonable for a $5.5K 15-year-old used car with 200,000km?"
4. My suggestion - Try again to negotiate at $700 and move on.
All the best.