Have you bought a Lemon Car?

We deal with a number of client issues surrounding cars and other motor vehicles after they have repeatedly broken down and spent more time being fixed and off the road than on it.  Such cars are commonly known as a ‘lemons’.

When the vehicle is new or nearly new, the resolution is fairly simple as the fault is likely covered under the dealers warranty.

Even older cars, those under 10 years old and under 160,000km, are covered by a statutory warranty for 3 months (or 5,000km) if purchased from a licensed motor dealer.

From September 2019, all cars sold by motor dealers, however old or however many kilometres travelled have a 1 month or 1,000km statutory warranty.

However, what about faults that happen outside of those warranty periods., or when the dealer refuses to acknowledge coverage under a warranty.

Australian Consumer Law

This is were statutory consumer guarantees provided to car buyers might provide you with a remedy.  The Australian Consumer Law is a suite of new laws that came into force in 2011 and cover vehicles as ‘goods’ in the same way as other goods.  You can read all about the Australian Consumer Law on our dedicated page to find out when a vehicle might be covered.

In the motor vehicle context, every car dealer in Queensland promises (guarantees) that:

  • The car is of acceptable quality.
  • The car matches any description they provided or demonstration provided to you.
  • The car is fit for the purpose of being used as a motor vehicle (in normal conditions for the type of vehicle it is).
  • They are legally able to sell you the car.
  • You have the exclusive legal right to own the car and use it.
  • There is no money owing on the vehicle (or they have disclosed that there is).
  • There will be spare parts and repairs available for the car for a reasonable time after purchase.
  • The car will meet any specific promise to you regarding its quality, condition, performance or characteristics.

The car dealer cannot escape these promises or make you sign an agreement that attempts to limit the guarantees in any way.

The guarantees do not have anything to do with any other written or statutory warranty and it does not matter when those other warranties might have ended or not, the consumer guarantees remain valid.

However, whilst the guarantees are easy to say and list out, it is far more difficult to interpret them into the purchase of a particular car.  Each car will be different because each car (especially used cars) come with their own parameters of what might be reasonable for the car dealer to guarantee.

The main factors when it comes to vehicle defects are age, distance travelled, price paid and quality of the car.

By way of example:

  • A defective gearbox in a 10 year old BMW that’s done 25,000kms might be guaranteed under the law but a defective gearbox in a 10 year old BMW with 150,000kms on the clock might not be guaranteed.
  • A defective electric window in a 3 year old Porsche might be guaranteed under the law but a defective electric window in a 3 year old Great Wall might not be guaranteed.

So what can you do about it?

If you think the car you bought is failing one of the guarantees then you need to act as quickly as possible to notify the car dealer of the problem straight away and give them the opportunity to provide you with a remedy, voluntarily.

When a guarantee is breached, the remedies on offer under the Australian Consumer Law are, usually:

  • Having the vehicle repaired properly at the dealers own expense.
  • Returning the vehicle and getting a refund (or a replacement vehicle).
  • Being compensated for the loss you have incurred (drop in value of the car, repair costs, towing, car hire, etc).

What remedies are available to be enforced against a car dealer will depend on the type of defect on how, or if, it can be repaired.  A distinction is made between ‘minor faults’ and ‘major faults’ and the interpretation of what might be classified as minor or major is once again a difficult question of interpretation and application to the particular vehicle and specific defect concerned.

We almost always recommend that people take the vehicle to a mechanic or vehicle inspector to obtain a full report on the vehicle to determine the fault and/or condition of the car.

If you want to claim loss of value, then we would also suggest that you obtain a valuation of the vehicle from a trusted source in order to prove your loss.

Where to make a claim?

The Queensland Civil and Administrative Tribunal (QCAT) has jurisdiction to deal with defective vehicle claims where the amount in dispute is less than $100,000 (from September 2019).  They deal with vehicle defect claims under the Australian Consumer Law as a special application (Form 59).

The Magistrates Court of Queensland can also hear defective vehicle claims.  If your dispute involves a claim for monies over $100,000 (and up to $150,000) then it will need to progress through the Magistrates Court of Queensland.

If you are using a lawyer to assist with your defective car claim then we would always suggest it be filed in the Magistrates Court where you will have some protection to recover your legal costs.

How can we help?

We assist people make, or defend claims that a car or other vehicle suffers from defects such that a car dealer should provide a remedy to you.

Feel free to call us or make an appointment to talk about your issues and find out why you might want to choose us to help you make a claim.

DISCLAIMER:  The above article was written at a specific point in time in the past and is provided as general guidance only.  It is not intended to be specific legal advice to any person’s particular circumstances who may be reading it.  We do not recommend you use this article as a replacement for obtaining proper legal advice on your issue and encourage anyone reading the article to obtain legal advice to ensure the above information and guidance remains valid and suits your particular circumstance.  In our experience, there is no ‘one size fits all’ to legal problems!