LEMON SQUEEZE

The Advertiser - Motoring - - COVER STORY -

The Aus­tralian Consumer Law 2011 (ACL) says that if you buy a new car and it has a “ma­jor fail­ure” you are en­ti­tled to take it back to the dealer and claim a re­fund, or a re­place­ment — ei­ther an iden­ti­cal new car or a car of sim­i­lar value. The choice is yours.

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.

To date, the Aus­tralian Consumer and Com­pe­ti­tion Com­mis­sion has not pros­e­cuted deal­ers or man­u­fac­tur­ers for breaches of the law.

It has the in­dus­try in its sights, though, par­tic­u­larly over the prac­tice of forc­ing con­sumers to sign con­fi­den­tial­ity agree­ments as a con­di­tion of re­fund­ing money or re­plac­ing a car.

This year, the com­mis­sion tells Cars­guide, it has made a pri­or­ity of “consumer is­sues aris­ing in re­la­tion to new car re­tail­ing, in­clud­ing re­sponses by re­tail­ers and man­u­fac­tur­ers to consumer guar­an­tee claims”.

“The ACCC is aware that in some in­stances con­sumers have signed con­fi­den­tial­ity agree­ments as part of set­tle­ment agree­ments with car man­u­fac­tur­ers,” it says.

“The ACCC would have some con­cerns when a busi­ness seeks to im­pose con­fi­den­tial­ity clauses as a con­di­tion of pro­vid­ing reme­dies a consumer is en­ti­tled to un­der the consumer guar­an­tee pro­vi­sions of the Aus­tralian Consumer Law.”

Tony We­ber of the Fed­eral Cham­ber of Au­to­mo­tive In­dus­tries says that car buy­ers have ex­er­cised their rights un­der the consumer law in a “very low pro­por­tion” of new car sales.

A re­view is un­der way on the ef­fec­tive­ness of the leg­is­la­tion. Have your say — pub­lic sub­mis­sions are open un­til May 27. View con­sumer­law.gov.au.

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