I bought a vehicle from a used car yard but after a few days I noticed it was in a bad state with issues such as oil leaks and bad suspension. The seller was contacted but wouldn’t answer the phone. Engine troubles then presented themselves. Fair Trading became involved and I was without a vehicle for four months. After retrieving the vehicle, more problems emerged. Fair Trading have not assisted in rectifying the situation for 14 months. Apart from approaching the media are there any other options?
– Fred, NSW
Kat says: This is an extremely upsetting set of circumstances and I’m sorry this happened to you. A car – even a used car – is a big financial investment. It has also had a huge impact on your day-to-day life. Being without a car for four months is a massive burden.
‘Lemon cars’ – defective vehicles, like the one you described – might have a cute name, but they are a big issue for consumers. So much so that consumer advocates are campaigning for better rules, remedies and dispute resolution channels for consumers who wind up with dodgy cars through no fault of their own.
A recent report by Consumer Policy Research Centre found that 54% of all Victorians who bought a used or new car in the last five years found major or minor faults. The same report found that when a consumer winds up with a lemon car, they have to take more than 60 steps to try to resolve the issue, even in a straightforward case. Which probably doesn’t make you feel better – but it is to say you’re not alone. This is an emerging issue that we’re coming to understand is serious and pervasive.
Australian consumer law (ACL) has some guarantees in relation to used cars, which includes that they must be of acceptable quality. Acceptable quality is taken to mean what a ‘reasonable consumer’ who has all the information about the car – including any defects – would consider to be acceptable, taking into account the car’s price and age. Part of this is that the car is fit for purpose (i.e. able to do the job of the car), safe, durable, free from defects (unless they are disclosed at the point of sale) and has an acceptable appearance (i.e. not too shabby).
Under the ACL, remedies are available for lemon cars, but they depend on whether the fault is major or minor. You did the right thing by going to Fair Trading and it sounds like the fault was assessed as minor, which entitles you to a repair – which you got. Given that your car was not fixed in a reasonable amount of time (four months is a long time for repairs!) and your car has ongoing problems, this can now be treated as a major fault.
For a major fault, your remedies are a refund, an identical replacement or to keep the car but receive compensation if the fault has caused the car’s value to drop. But while these remedies are available, the tricky part – as you know – is getting them.
Your first steps are to contact the dealer and Fair Trading again. Call them but also put everything in writing, documenting the full history of your issue. Under the NSW Motor Dealers and Repairers Act 2013, Fair Trading is the first port of call in resolving disputes about defective motor vehicles.
If you can’t get resolution from Fair Trading at this point, your only other recourse is with NSW Civil and Administrative Tribunal (Ncat), which Fair Trading should advise you about.
Ncat can make orders, which include the payment of money to you or the full repair or replacement of the car. You must apply to Ncat within three years of the problem occurring (and within 10 years of having bought the car), so you are still within the limitation period, if you chose to make an application.
Ncat is not necessarily an ideal outcome – it will cost you time and money and require emotional and mental fortitude – however, it might be the best and only chance at recovering your losses if Fair Trading isn’t able to resolve the dispute for you.
Once you’ve applied to Ncat, you can expect to wait at least six or so weeks to be issued a hearing date, but the issuing of the hearing date and the timing of the hearing date itself will depend on Ncat’s case backlog. We checked with Ncat, and they said that for motor vehicle issues, it is generally around six weeks at the moment.
However, CPRC’s report paints a different picture of wait times at Vcat, the Victorian equivalent at Ncat, with consumers reporting waits of up to 20 months between their initial application and hearing date.
Going to Ncat is like going to court. You will have to prepare a lot of evidence, which is set out on Ncat’s website. You’ll also need to figure out and file documents in what is a fairly complicated process. And to add salt to the wound, your faulty car is part of that evidence, so you’re going to have to hold onto it through the entirety of the application process and proceedings.
In terms of cost, there are initial logement fees, which depend on the value on your claim, but will be a few hundred dollars. For instance, claims between $10,000 and $30,000 will cost $120 to lodge but if it’s more than $30,000, you’re looking at $309. If your case is complex, you’ll also incur hearing costs if your case runs over a number of days, which could be in the thousands. You might also find yourself incurring costs in relation to evidence, not to mention the retention of your faulty vehicle. You can also choose to pay for legal representation, which is costly. If you don’t, you have to represent yourself at your hearing.
Before you lodge a complaint with Ncat it would be worth calling Fair Trading again to seek advice about the process, or other independent legal advice.
Unfortunately, with no ombudsman or other dispute-resolution scheme specific for lemon cars, these types of disputes are especially onerous for consumers to resolve. They are, however resolvable. It’s just going to take a lot of time and effort on your part.
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