Warranties are based on the consumer guarantees provided under the Australian Consumer Law (ACL). Depending on the age and amount of kilometres on a vehicle, additional dealer guarantees may apply under the Motor Dealers and Repairers Act 2013.
Consumer guarantees for the supply of goods
The ACL requires that goods supplied by businesses to consumers are of 'acceptable quality'. This means goods must:
- be safe and lasting
- look acceptable
- do all the things someone would normally expect them to do.
When working out what is 'acceptable quality' for a vehicle, what is normally expected for the type of vehicle and how much it costs, are taken into account. Goods must also:
- match descriptions made by the salesperson and in promotions or advertising
- match any demonstration model or sample you asked for
- be fit for purpose - this will include what the seller told you it would be fit for and for any purpose that you made known to the seller before purchase
- come with full title and ownership
- not carry any hidden debts or extra charges
- come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them
- meet any extra promises made about performance, condition and quality
- have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.
NSW Fair Trading inspectors can issue rectification orders to resolve disputes between consumers and licenced dealers or repairers. The Automotive Inspector may issue a rectification order if there are matters that the licenced repairer or dealer needs to rectify. The Inspector may also conclude that the trader is not responsible. Rectification orders are enforceable and maybe used as evidence in court or at tribunal. Fair Trading can take disciplinary action against a licensed dealer or repairer if they don’t follow an order.
In addition to consumer guarantees under the ACL, or any express warranty for the vehicle, there is also a ‘dealer guarantee’. If a consumer has a complaint about a vehicle purchased from a licensed dealer, it’s their choice whether to make a claim under the dealer guarantee, the ACL or any express warranty for the vehicle.
The dealer guarantee requires motor dealers to repair or make good, at their own expense, any defective vehicles they sell. To ’make good’ means the vehicle must be repaired or remediated so that it is in a reasonable condition. The dealer guarantee also extends to the next owner of the vehicle within the limitation period, except for second-hand vehicles or if the purchaser is a licensed motor dealer.
The limitation period for a dealer guarantee begins when the purchaser takes possession of the vehicle or the sale is complete, whichever happens first. Limitation periods can be a time period or a distance driven. A period of guarantee does not include when the motor vehicle is in the possession or control of the dealer for assessing, repairing or making good repairs.
New vehicles (other than motorcycles)
The dealer guarantee for a new motor vehicle which has driven less than 15,000 km when purchased is limited to 20,000 km after manufacture, or 12 months after purchase (less one month for each 2,000 km that the vehicle was driven before purchase) whichever occurs first.
The dealer guarantee for a new motor vehicle which has driven more than 15,000 km when purchased is limited to 5,000 km after purchase, or three months after purchase, whichever occurs first.
Second-hand vehicles (other than motorcycles)
The dealer guarantee for a second-hand motor vehicle which had driven less than 160,000 km and was less than 10 years old when purchased is limited to 5,000 km after purchase, or three months after purchase, whichever occurs first.
The dealer guarantee for a new motor cycle which had driven less than 7,000 km when purchased, is limited to 10,000 km after manufacture, or six months after purchase (less one month for each 2,000 km that the vehicle was driven before purchase) whichever occurs first.
The dealer guarantee for a new motor cycle which had driven more than 7,000 km when purchased, is limited to 3,000 km after purchase, or three months after purchase, whichever occurs first.
The dealer guarantee for a registrable second-hand motorcycle which had driven for less than 30,000 km and was less than five years old when purchased, is limited to 3,000 km after purchase, or three months after purchase, whichever occurs first.
The dealer guarantee for an unregistrable new motor cycle is limited to 5,000 km after purchase or three months after purchase, whichever occurs first.
Where the dealer guarantee does not apply
A dealer guarantee won’t apply in these scenarios:
- a motor vehicle sold at auction where a dealer’s notice specifies that the dealer guarantee does not apply and is attached to the motor vehicle at the time of sale
- a substantially demolished or partially dismantled motor vehicle that is purchased by the holder of a motor vehicle recycler’s licence
- a motor vehicle sold by a motor dealer that is unregistered and, at the time of sale, requires substantial repair
- incidental or accidental damage that occurred to the motor vehicle after the sale by the motor dealer and when it was not in the possession of the motor dealer
- damage which occurred after sale and was caused by misuse or by negligence of the driver, or because the motor vehicle was used for motor racing or motor rallying
- superficial damage to the paint-work or upholstery of a second-hand motor vehicle that would have been apparent on a reasonable inspection at the time of sale
- the sale of a second-hand vehicle where a prescribed defect notice (either dealer notices 6, 8 or 10) and inspection report were attached, including an estimate of the cost of repairing the vehicle.