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AAAA supports call for lemon laws

Under inspection: A revision of Australian consumer laws could mean customers are either refunded or have their persistently troublesome new car replaced.

Ricky Muir urges examination of car-maker behavior regarding unreliable new cars

General News logo1 Jun 2015

THE Australian Automotive Aftermarket Association (AAAA) is the latest automotive body to welcome the review of the Australian Consumer Law agreement ordered by federal small business minister Bruce Billson.

It comes after Victorian senator Ricky Muir said the review would present an opportunity for the tightening of requirements on car-makers to improve the way they honour their warranty responsibilities.

The Consumer Action Law Centre is also backing the review, urging an examination of car-maker conduct if they sell vehicles that break down repeatedly.

AAAA executive director Stuart Charity said the association had been arguing for a number of years that consumer protections written into vehicle warranties needed to be clearer and stronger.

“In particular, the AAAA has pressed successive federal governments for more robust policing of warranty performance by vehicle manufacturers and their dealers,” Mr Charity said.

Experience in the United States, where so-called 'lemon laws' have been in force for more than 20 years, reveals that around 1.5 per cent of new vehicles sold fall into the category of being a 'lemon'.

A lemon is generally described as a vehicle that has been repaired several times and is still not 'fit for purpose'.

If that percentage was the same in the Australian market of 1.1 million vehicles a year, it would mean that 16,500 vehicles a year would be classified as “lemons”.

The rash of comments in support of stronger consumer protection was sparked by the decision by the Minister for Small Business, Bruce Billson, to ask the Australian Competition and Consumer Commission (ACCC) to review the implementation of the Australian Consumer Law (ACL) agreement.

The ACL commenced in 2011 and is a joint effort by the Commonwealth and the states to bring into line all laws that bear on consumer protection.

Mr Charity said the AAAA backed the definition of a lemon vehicle as being a vehicle that had been repaired three times and was still defective, or if it has been out of service for 20 days or more due to defects.

He said the behaviour of car-makers in meeting their consumer guarantee obligations should be examined.

“We believe the onus of proof should be reversed, so the burden of proof falls on the manufacturer or dealer to prove that the vehicle is of acceptable quality and fit for purpose.

“Our position is that if a vehicle has a major failure or repeated failures, the consumer should have the right to choose between a refund or a replacement.”

Mr Charity said this approach would eliminate cases where vehicles were repeatedly presented for repairs but never became truly 'fit for purpose'.

He suggested that it might also curb the enthusiasm of manufacturers who could rush a vehicle to market before sufficient testing has been done.

“There have been concerning signs of this in recent years,” he said.

“Australian car manufacturing will end in about two years, making our nation totally reliant on imports. Australian consumers should not be used as test markets by international manufacturers.

“We encourage the ACCC to act quickly to make consumer protection more robust,” Mr Charity said.

The Federal Chamber of Automotive Industries, the body representing all local and importing manufacturers, declined to comment on the current situation.

A spokesperson said the chamber supported the current consumer guide covering car sales and repairs. The guide was developed by the ACCC and all the State and Territory consumer protection bodies.

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