Purchasing a new vehicle can be an exciting time, but what happens when something goes wrong? Your paint is flaking, warning lights are flashing, and there is a big repair bill.
Lane Neave can assist you in understanding your rights and remedies under the Consumer Guarantees Act 1993 (CGA) to resolve the issue. Below is a practical guide to help you understand your options, the likely process, and the evidence you will need to support your case.
Step One
Before considering whether to make a claim against the car dealer under the CGA, check the details of any warranties you may hold, as your defect may be covered.
If this is the case, contact the dealer or seller directly, preferably in writing, to have this issue resolved under the warranty.
Step Two
If your vehicle is not covered under warranty, or the dealer has refused to resolve the issue, it is likely you will need to raise a dispute with the dealer or seller to have your issue remedied.
Any civil dispute involving a motor vehicle trader and a consumer who has purchased a motor vehicle utilised for personal, domestic, or household use of up to $100,000 is heard by the Motor Vehicle Disputes Tribunal (MVDT). The decision-maker in the MVDT is an adjudicator, who typically has legal experience and offers a pragmatic approach to resolution.
While Lane Neave is unable to act for you in a MVDT hearing because neither party is entitled to be represented by a lawyer, we can absolutely assist you with preparing your claim, evidence, and submissions ahead of time.
We recommend arranging for a mechanic, panel beater, or other relevant professional to complete an assessment of the defect and prepare a quote for repair as evidence of the work required, the cost of the work and, most importantly, the nature and extent of the defect.
Assessing Your Claim
There are two main claims that can be made under the CGA:
Substantial Character
Under section 21(a) of the CGA a consumer can bring a claim if the defects or issues are failures of substantial character.
A defect meets this threshold on the following grounds:
- the vehicle would not have been acquired by a reasonable consumer if they were fully aware of the nature and extent of the defect; or
- the defects mean the vehicle does not match the description in a significant respect; or
- the vehicle is substantially unfit for purpose and cannot easily be remedied within a reasonable time to be made fit for purpose; or
- the vehicle is unsafe.
If a claim under substantial character can be proved, then you as the consumer can elect if you would prefer the dealer to repair the defect, replace the vehicle, or give you a refund for the vehicle.
Examples of defects of substantial character in earlier cases are:
- Significant engine damage.
- Worn brake discs on all four wheels being a safety concern.
- A substantial combination of defects: a loose engine mount, damage to the engine, a severe oil leak, and that, unknown to the purchaser, the vehicle had previously been written off.
In contrast, a car having a cracked indicator, a leak in the intake manifold, and a defective vehicle battery did not meet the legal test of “substantial character”.
For less substantial defects, there may still be a claim under ‘Acceptable Quality’ – please see below.
Acceptable Quality
Section 6(1) of the CGA provides a guarantee to consumers that goods, including vehicles, will be of acceptable quality.
This is defined under section 7 of the CGA as meeting the following conditions as would be assessed by a reasonable consumer regarding the nature of the goods, the price, descriptions or statements, the nature of the supplier, representations by the supplier, and any other relevant circumstances.
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- Fit for all purposes.
- Acceptable in appearance of finish.
- Free from minor defects.
- Safe.
- Durable.
The threshold for meeting this definition is more open to interpretation by individual adjudicators. The remedy can include repair, compensation for reduction in value or damages.
In one case, the MVDT considered exposure to harsh weather, improper maintenance, natural wear and tear, storage of the vehicle outside, and cleaning with a brush to be circumstances relevant to whether peeling paint constituted a breach of the guarantee of acceptable quality. Being nine years old at the time of purchase only eight months prior, and having done only 26,000km, the MVDT found reinstatement of a clear coat was necessary at the dealer’s cost.
Conversely, the passage of time since purchase and mileage can influence the strength of your claim. For example, in another case the 17 months since the purchase of the vehicle and over 100,000km travelled meant that the defect did not attract the remedy under the CGA.
Evidence may be required to show how you have kept and maintained your vehicle to persuade the MVDT the defect is not ordinary wear and tear.
If any of this aligns with your circumstances, please contact our Dispute Resolution and Litigation Law team for assistance drafting your MVDT application form.
If you bought from a private seller rather than a dealer, the MVDT cannot hear your claim but you may be able to proceed in the Disputes Tribunal (for claims up to $60,000).
