Dodgy car dealers in spotlight

THE corporate watchdog wants to stop car dealers taking motorists for a ride, inviting the public to have their say on proposed reforms to combat unfair sale add-ons.

The Australian Securities and Investments Commission released a consultation paper yesterday, seeking traction on the idea of a deferred car sales model for add-on insurance and warranties.

Under the proposed model, car yards and finance brokers wouldn’t be allowed to sell add-on financial products to new buyers right away, aside from comprehensive or compulsory third party insurance.

Knock-out questions would also prohibit the purchase of low or no-value products, along with warranties with $2000 or less of coverage.

Car dealers and insurers have been in ASIC’s sights recently, with the watchdog cracking down on issues relating to asset protection, consumer credit and mechanical breakdown/extended warranty insurance.

The regulator revealed in June it had passed on refunds to almost 250,000 customers after recouping $130 million in losses from these near-worthless insurance products.

Commissioner Sean Hughes says the proposed changes are designed to improve future consumer outcomes. “There has been a history of unfair conduct and poor results for consumers in the add-on insurance market,” he said. BUILDING approvals have again disappointed, falling by a seasonally adjusted 1.1 per cent in August as private house approvals dropped by 2.4 per cent.

The market consensus had been for a 2.0 per cent rise in total approvals after a sharp 9.7 per cent drop in July.

“This data indicates that we’re yet to see a bottom in building approvals and suggests increased risk of a deeper residential construction downturn,” NAB economist Kaixin Owyong wrote in a report.

“Total building approvals are at the lowest level since January 2013, and 44 per cent below its November, 2017, peak.”

In trend terms, the number of approvals fell by 3.9 per cent in August, the 21st month it had fallen, the Australian Bureau of Statistics announced yesterday. Dwelling approvals dipped in every state and territory, with ACT (27.7 per cent), the Northern Territory (8.7 per cent) and NSW (5.4 per cent) the hardest hit, in trend terms.

There were a seasonally adjusted 12,817 dwelling units approved, down 21.5 per cent from August, 2018.