Many consumer problems arise from dealings with cars, caravans and boats. And the buying and selling cars is usually the second largest transaction, next to house purchases, that most of us will undertake. These purchases are almost always done without using lawyers although lawyers occasionally have a part to play later on if big problems arise. Let’s make sure that you don’t have to take that road by giving you the basic information about what your rights are and how under the law dealers should behave.
Buying from a motor dealer
Motor dealers and the deals they do with you are covered by state and territory laws.
The laws regulating motor dealers and their transactions includes:
Motor Car Traders Act 1986 (VIC)
Motor Dealers and Repairers Act 2013 (NSW)
Second-hand Dealers and Pawnbrokers Act 2003 (QLD)
Second-hand Vehicle Dealers Act 1995 (SA)
Motor Vehicle Dealers Act 1973 (WA)
Sale of Motor Vehicles Act 1977 (ACT)
Consumer Affairs NT can assist (NT)
Motor Vehicle Traders Act 2011 (TAS)
These laws cover the conduct of motor vehicle dealers like:
♦ Making sure they are properly registered to actually be motor dealers;
♦ The guarantees they must give you, and how long such guarantees will last for (often limited by age and odometer reading). All states and territories except Queensland provide a statutory warranty period for second hand vehicles.
♦ What documentation they must provide you with once they’ve sold you a vehicle.
Under the law, contracts for the sale of a motor vehicle must generally:
♦ Be in writing and signed;
♦ Contain vehicle details, such as the Vehicle Identification Number (VIN) and registration
number, price, charges, trade-in details and odometer reading;
♦ Contain a statement by the dealer guaranteeing clear title to the motor vehicle. So when you buy a vehicle from a dealer your ‘title’ is guaranteed which means that you have certainty that there is nothing owed on the vehicle by someone else.
Tips when buying privately from another person
Buying a vehicle privately needs a little more investigatory work as you must always find out whether there is any finance owing on the car, caravan or boat you’re thinking of buying. It’s important to do this because if the vehicle you buy privately has finance owing on it there will usually be a charge registered on it. This basically means that the finance company will always own it until the debt is paid.
If the person selling you the car doesn’t tell you there is money owing on the vehicle, you will end up with the car and the debt they owe. You also risk having the vehicle seized by the financial institution if the original owner does not continue to repay the debt. This is a situation you need to avoid.
Always keep in mind that private vehicle sales with another person are not covered by the motor vehicle dealer laws. You need to check the Personal Property Securities Register to both ensure good title and that no money is owed on the vehicle whether car, caravan or boat. There is a small cost to check this information but a few dollars is worth the peace of mind it will bring.
So what guarantees do you actually get when you buy a vehicle?
Under the Australian Consumer Law, there are nine consumer guarantees that apply to new and used motor vehicles sold to a consumer:
♥ Suppliers and manufacturers guarantee that motor vehicles are of acceptable quality
♥ A supplier guarantees that motor vehicles will be reasonably fit for any purpose the consumer or supplier has specified
♥ Suppliers and manufacturers guarantee that their description of motor vehicles (for example, in a catalogue or television commercial) is accurate
♥ A supplier guarantees that motor vehicles will match any sample or demonstration model
♥ Suppliers and manufacturers guarantee that motor vehicles will satisfy any extra promises – or “express warranties” (aka promises by a supplier or dealer) – made about them
♥ A supplier guarantees they have the right to sell the motor vehicle (clear title), unless they alerted the consumer before the sale that they had “limited title”. Note that licensing laws in some states or territories may require motor car traders to guarantee clear title
♥ A supplier guarantees “undisturbed possession” or that no one will try to repossess or take back motor vehicles, or prevent the consumer using them, except in certain circumstances
♥ A supplier guarantees that motor vehicles are free of any hidden securities or charges and will remain so, except in certain circumstances
♥ Manufacturers or importers guarantee they will take reasonable steps to make spare parts and repair facilities available for a reasonable time after purchase.
♥ Consumer guarantees cannot be excluded, even by agreement.
Vehicles bought from private sellers
Vehicles bought from one-off sales by private sellers are only covered by the guarantee to title, undisturbed possession (for example, the supplier guarantees that no one has the right to repossess the vehicle, or stop you from using it) and undisclosed securities (for example, the seller of a car must ensure any security over the car given by its previous owner, such as a secured car loan, has been discharged before selling the car to you).
However don’t worry because the warranties under state and territory sale of goods legislation apply to private sales, unless excluded by the contract.
Vehicles bought at auction
Vehicles bought at auctions are only covered by the guarantees as to title, undisturbed possession and undisclosed securities. However, the implied warranties under state and territory sale of goods legislation apply to auction sale contracts, unless excluded by the contract.