RACV pushes for lemon law

The broad-ranging ‘lemon law’ could also apply to used vehicles if the Federal Government adopts the recommendations into consumer rights by the Commonwealth Consumer Affairs Advisory Council.

The move has been welcomed by motoring bodies, but the RACV says the complaints process also needs to be streamlined. Consumers who have been sold a lemon should get a quick resolution to their problem, it says.

Help is already available through Consumer Affairs Victoria, the Victorian Civil and Administrative Tribunal or the courts. But the RACV's general manager public policy, Brian Negus, says there is no clear process to follow.

Consumers are often left powerless by the current resolution system, which he describes as inadequate. "It's the consumer who often gets caught between manufacturers and dealers arguing over who is responsible with neither of them putting up their hand and the consumer left with a faulty vehicle," he says.

"We believe anyone buying a car must be entitled to service histories and warranty repair records. Consumers must also be informed about what they can do when things continue to go wrong."

The RACV wants a level playing field so manufacturers have some rights too. It says any lemon law should recognise that manufacturers should be entitled to a deduction from the purchase price of a faulty vehicle if it is required to buy it back, calculated using the distance travelled of the dodgy vehicle.

"Obviously the age of a vehicle will have to be taken into account," Negus says. "If a vehicle is three months old it should be replaced but if one is two or more years old, its kilometres should have some impact on price."

In its submission, the RACV defines a lemon as any vehicle that has had three repair attempts to a persistent fault, or a single attempt for a significant safety defect, or has had 10 cumulative days out of service, or defects that occurred within two years or 40,000km.

Australian consumers make about 50,000 complaints a year over warranties and entitlements on faulty goods, which costs them $12 billion a year. The council recognises that new vehicles are often the second most significant purchase after buying a home but when that purchase turns out to be a lemon, they are often overwhelmed about where they can get help.

"It is important that consumer law provides an effective means of redress when consumers suffer, for example, because of the presence of lemons in any market," the council chairman, Colin Neave says.

Negus recommends that consumers get an independent pre-purchase inspection as the first line of defence against buying a defective vehicle. "A comprehensive inspection of a new or used vehicle before purchase helps motorists know exactly what they are buying before handing money over," he says.