New laws aim to end service and warranty hassles — if you get a dud, you can claim a replacement
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YOU used to have Buckley’s chance of returning a dreaded lemon to the car dealer for a replacement or a refund.
As for being compensated for the inconvenience, aggravation, lost income and costs racked up while taking the car from hell to the dealer for a further non-fix under warranty, well, make that virtually no chance either.
Many Australian consumers have tried but only a few very determined people have succeeded, usually after long, expensive battles against squads of car company lawyers in various courts.
The new Australian Consumer Law (ACL), developed by the states and the Australian Competition and Consumer Commission, came into force on January 1 this year. It’s not as tough as US lemon laws, but it gives you much more protection than the maze of state and federal consumer regulations you previously had to navigate to make a case that your car resembled a particularly bitter variety of citrus fruit.
The Australian Consumer Law applies to most goods and services, including new and used cars, except those bought at auction or private sale, where you’re still basically on your own.
When you buy a car from a dealer, you now have the protection of legally enforceable consumer guarantees, including that the car is of acceptable quality (which includes being safe, free
The laws also address the extended warranty trap
from defects and durable) and reasonably fit for any purpose you specify when buying it, such as towing.
If you have what the ACL calls a major failure with your car, you are entitled to return it to the dealer to claim a refund, or a replacement— your choice of an identical new car or one of similar value.
A major failure is when a reasonable consumer would not have bought the car if they had known about the problem, or when the car is substantially unfit for its normal purpose.
In other words— the car is a lemon.
If you have a minor problem with the car, the dealer is still allowed to fix it under warranty.
If you have to get your car fixed at another workshop, you’re entitled to claim the cost from the dealer who sold you the car.
However, if the dealer can’t fix the problem within a reasonable time, you are also entitled to a refund or a replacement.
So the classic tactic of some dealers and manufacturers stringing you along by saying,
‘‘ Just bring it back and we’ll try to fix it under warranty’’ time and again until the warranty runs out, will no longer work.
And when the warranty expires you are still protected by the ACL’s consumer guarantees— but a used car’s age and kilometres since you bought it will be taken into account when determining your entitlements.
The ACL also addresses one of the other great traps of the car business— the extended warranty. Many new and used car buyers have paid thousands of dollars for one of these, on the (mis)understanding that, first, it’s the only way to cover themselves against repair costs when the factory warranty runs out and, second, that when they make a claim under the warranty, it will be honoured.
Those same car buyers have often found, to their great cost, that these extended warranties sometimes are not worth the paper they are written on.
They are, first and foremost, a way to increase a dealer’s profit margin on the car. Most have very onerous conditions, including mandatory servicing schedules at the dealer who sold you the car. In the worst cases, consumers have called the helpline number on the warranty policy only to find there’s nothing other than an answering machine on the other end of the line.
The ACL states that manufacturers and dealers must not pressure you into buying an extended warranty, or tell you that you have to buy one.
In fact, you now have rights under the ACL’s guarantees that are equal to or greater than any supposed benefits you’re paying for under an extended warranty policy.
If you think you’ve bought a lemon, the first step is to tell the dealer.
‘‘ You should go to the dealer who sold you the car and point