“Time for an ombudsman”. The call has been put out for a ‘lemon vehicles’ ombudsmen in Victoria. What do you think about the proposal and should other states and territories follow suit?
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As long as they have the statutory powers to have a real effect, or they will become a weak offshoot of the Office of Fair Trading.
Thinking aloud, I wonder if used car warranties (those outside manufacturer warranties) from licensed dealers should continue into the future. I wonder if a better option is to mandate a full mechanical, body, electrical and safety assessments before purchase of any used car (dealer or private). The assessments to be undertaken/arranged by the buyer independently of the seller (a bit like a house inspection as part of a sale contract). Then buyers will be better placed to understand the risks of purchasing a used car rather than the sales pitch of the seller…and gives opportunity to cancel the sale contract or negotiate repair of defects/lower purchase price prior to settlement. This might be better at finding out a car is a lemon…rather than if the car is a lemon it will somehow be fixed under warranty.
Dealers/sellers won’t like this as it may force them to keep or fix a lemon car, rather than quickly offloading it to an unsuspecting buyer. It would also stop dealers trying to sell privately when they know that they might have a problem vehicle.
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That is strongly advised for any purchaser but I am challenged to understand how that is better than a real warranty that works as expected.
Would you buy a pair of shoes after examining them in the shop, and a week later the soles came unglued and you had no recourse?
Even a lemon, when repaired, will run for days, weeks or longer prior to another problem. That would not be detected by a mechanical inspection in the same vein a Choice lab test cannot test long term reliability.
I seem to remember cars being sold ‘subject to inspections’ decades ago. One made a refundable deposit to hold the vehicle, the inspection was often done by an auto club technician, and on receipt of that report the deal could be renegotiated or cancelled. Maybe it was uncommon but I almost bought a car that way in Sydney, 1970, but on receipt of the NRMA inspection I walked.
How does one know when a lemon is ultimately fixed? Some never will be save for runtime between problems.
Sometimes the dealers get lemons just like the consumer. That is another issue.
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It is currently voluntary and most don’t do it. The limit of assessments is often the seller getting a ‘slip’ for selling. If thorough inspections were made mandatory, then there is a high chance that faults will be detected. Sale contracts, like those for houses, can have ground for terminating the purchase should significant faults be detected (say those where the cost to rectify is greater than 10% of the vehicle sale value).
Currently there are real used car warranties, but these don’t work. They appear to be more a marketing gimmick than having real effect for all used car buyers evidenced in the Choice article and threads in this forum. ‘Real’ warranties don’t stop lemons being sold. Used car dealers (knowingly) sell them either to hope they last until after the warranty period’ or use clauses in the warranties to make any claim invalid.
That is irrelevant as the shoes are new. If one choses to buy second hand shoes, what resolutions under the ACL aren’t so clear. As the ACCC indicates, 'Depending on factors like price and age, it may not be reasonable to expect it will last as long". If one paid a couple of dollars for a second hand pair, then one need to accept that a week’s life is acceptable or pay for them to be repaired.
You don’t, but if (another) buyer carries out the an assessment before buying, one will know if it is (still) a lemon. A seller is unlikely to try and sell a lemon knowing that it will be picked up in a mandated thorough vehicle inspection.
If they do, they it needs to be transparent to the buyer. Currently lemon status is hidden from the buyer and dealers will off load them to an unsuspecting buyer. Or, which is also common for a lemon model (such as those which have been subject of class actions), dealers have been known to sell them ‘privately’ to bypass their statutory obligations. This loophole would be closed with mandated inspections.
A dealer can chose to buy a lemon, but is it is a known lemon model, their value is likely to be scrap value when sold to a dealer…or the dealer takes on the responsibility to carry out repairs to ensure it isn’t defective.
Exactly and why I made the above suggestion. Knowledge leads to good decision making. Not having knowledge, it gambling. The current system is a gamble…and to change this is to mandate buyers to gain the necessary knowledge.
It is food for thought and as the current system isn’t overly satisfactory, placing information in the purchasers hands is better than nothing.
Edit: Cars are many are the biggest consumer purchase they will make in their lives. For many others, it is the biggest purchase second to houses. The current system only provides limited protections for those buying through reputable used car dealers…private or unscrupulous used car dealers slip through the nets even when used car warranties are mandated. Having a mandatory thorough used vehicle inspection levels the playing field and treats any used car purchase equally, irrelevant who is the seller. This would be a step in the right direction. It could be mandated with warranties as well, providing that warranties are worth more than the paper they are written on.
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Motor vehicles are often the second biggest investment after a home, yet there are very weak protections for consumers, and ultimately consumers are at the mercy of the vehicle dealership because few consumers have the financial resources to take personal legal action.
An independent umpire who is not tied to the motor vehicle industry should be able to arbitrate without cost to the buyer or seller, and make binding decisions.
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I think after spending some time in the motor industry employed by a major manufacturer at a management level that the warranties provided with vehicles become part of the ADR Australian Design Rules ) pertaining to vehicles .
In the last 3 years a number of vehicles , one being the Suzuki APV van , have been withdrawn from the Australian Market because they could not meet current ADR rules .
If the warranty had to meet an ADR standard many of the problems we now encounter would be covered and adhered to like other ADR regulations for vehicles .
What we need here is the laws that exist in the USA . Shortened version listed below .
"United States. Lemon law protection arises under state law, with every U.S. state and the District of Columbia having its own lemon law. … If repairs cannot be completed within the total number of days described in the state statute, **the manufacturer becomes obligated to buy back the defective vehicle " .
I think it is where we should head regarding "meaningful " warranties .
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Qld has specific legislation, but relies on a mediated resolution through QCAT.
There are some costs involved for the consumer. In respect of technical support, the dealer or manufacturer has effectively a limitless wealth of data and support to lean on. The dealer or manufacturer will also have a broad choice of whom to represent them. Even if it’s not a legally qualified rep it’s likely someone well versed in mitigating circumstance. It’s likely far from a level playing field.
An ombudsman - ombuds-person with staff, resourcing and independent support is one way to expedite fair outcomes IMO. An added benefit of a dedicated office could be an increased ability to focus on repeat offenders, dealers or products (manufacturers/importer).
A vexed question is how this is best implemented nationally, given the political divide between Commonwealth and the States, as well as between the States and Territories. All new vehicles plus some recycled are fully imported. The Commonwealth has control over imported vehicles. The industry is not State specific. A decision on a lemon in NSW should also be automatically applicable to a lemon in Qld or anywhere else in the country.
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Have a read of the latest Federal Court decision on the conduct of Mazda and how it misled consumers regarding their ACL rights (warning, it is a lengthy judgment). https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2021/2021fca1493
How many consumers have given up on trying to press a supplier or manufacturer for a refund when their new car turns out to be a lemon?
The ACL sets out your rights to ask for a repair, refund or replacement if there is a major failure to meet the consumer guarantees. It should not be that hard to ensure that suppliers or manufacturers understand the law. Perhaps some sanctions for supplying faulty goods should be the next change?
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I really don’t know what to say about it in general. Either way the current laws don’t work effectively. I wont say anything more except its, a lousy way consumers get treated.
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Improving legal and financial outcomes for ‘lemon car’ consumers in Victoria
Consumer Action Law Centre
Grant $273,000 over two years
This project will coordinate a campaign to make accessing redress easier for Victorians who are sold ‘lemon cars’ – that is, cars that show significant signs of failure or defects soon after purchase. An advocacy group will be established to drive reform, including developing a fully costed alternative model for resolving disputes with sellers.
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Another report how the consumer law fails. As stated in many topics a business that wants to step up to their responsibilities will, and those that do not will not excepting under the duress of the tribunal/court system.
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New research reiterates the case for an ombudsmen system to help deal with lemon car issues:
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It needs to come with enforceable actions/undertakings. The current system (with exception of court action) doesn’t have enforceable undertakings which makes getting a resolution more difficult for a consumer.
Enforceable actions/undertakings serve two purposes, the first being an incentive for businesses to do the right thing from the outset, and secondly, allows consumers to achieve resolution where business don’t meet their obligations under the Australian Consumer Law.
It is worth noting that the ACCC has the power to issue enforceable actions/undertakings for matters they administer/regulate under the ACL, but this does not flow down to the individual consumer when they take the matter further.
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Considering the time this has been recognised as a problem with nothing done a good question to government is ‘Why don’t you care?’
I would ad it needs to come with penalties to encourage importers/dealers to step up. As with most of our ‘protections’ the business’ worst downside is doing what they should have done in the first place so there is a tacit encouragement to avoid doing so until necessary and as posted here from time to time, not-inclined-to-do-the-right-thing businesses continue to ignore ‘us’ with impunity excepting in the most pervasive egregious cases.
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Hence if left as is, does the system serve best those with deep pockets prepared to engage legal support and go directly to court. Especially when there are likely major failures according to the ACL? Why waste time with any intermediate steps? In the instance it can be sustained the seller risks further claims before the court for other losses and legal expenses.
Is access on equal terms for all consumers at risk if changes are not made?
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