ACCC in drive to slam brakes on car makers’ retailing rip-offs
THE consumer cops say car makers are perpetrating the biggest rip-off they have ever uncovered.
To put an end to it, the Australian Competition and Consumer Commission is pushing for new laws and foreshadowing fresh legal action.
Those moves follow a year- long ACCC investigation into new car retailing that reveals: COMPLAINTS handling systems deny consumers their legal rights; FUEL consumption claims are out by an average of 25 per cent; OWNERS are being hoodwinked through “potentially misleading” warranty claims in log books; which HELPS the industry make nearly as much from servicing as it does from selling cars.
“The cost to consumers from the problems we are uncovering here is ... probably larger than anything we’ve ever dealt with,” ACCC chairman Rod Sims told News Corp Australia.
The ACCC is backing legislative reforms before state, territory and federal governments aimed at making it eas- ier for owners of dodgy cars to get a refund or replacement.
Mr Sims said there was currently a “culture of repair”, noting the ACCC had recently accused Ford of unsuccessfully attempting to fix the same significant fault up to seven times.
The watchdog also wants politicians to force the industry to make technical information available to all mechanics.
“Independent repairers are a lot cheaper,” Mr Sims said. “We would hope that the extra competition will see service costs come down.”
The ACCC’s investigation found margins on servicing average 64 per cent. So even though servicing only brings in 7 per cent of revenue, it delivers 36 per cent of profit, while car sales – which account for two-third of all revenue – bring in 38 per cent of profit.
A survey done as part of the probe found three in 10 consumers take their vehicle to a dealership for servicing or repairs because they believe it is compulsory according to their log book. Such statements were “potentially misleading” under the law, Mr Sims said.
“The industry is on notice,” he said. “They’ve got to fix this and if it’s not fixed we will be taking court action.”