Under the ACL you can’t be refused a remedy when purchasing a vehicle from a licenced dealer on the grounds that your purchase was made on behalf of your business. See the Australian Competition and Consumer Commission’s (ACCC) motor vehicles sales and repairs guide for information about businesses as consumers and the protections the ACL provides.
Do you feel like a vehicle you purchased for your business has been more trouble than it’s worth?
No one likes the idea of having purchased a lemon, especially given the expense of buying a vehicle and your expectation of how it will save you time and money.
As warranty periods can be limited, especially for second hand vehicles, the most important thing you can do is run through some due diligence steps before making your purchase.
Things to check before purchasing a second hand vehicle
When purchasing a second hand vehicle, the warranties and guarantees you’re entitled to will depend on whether you are purchasing from a licenced dealer or privately (including online or at auction).
A dealership will generally provide a limited warranty for used vehicles, and be subject to obligations under Australian Consumer Law (ACL), however when you purchase privately there are no warranties or guarantees making it a ‘buyer beware’ situation.
Before handing over your money take the time to:
- Pay for a full mechanical inspection so you can have an objective assessment of the vehicle’s condition. Don’t just accept the word of the previous owner’s. This is where many buyers are caught out, particularly when purchasing a second hand vehicle privately at auction or online. Often referred to as 100 Point Mechanical and Safety inspection, these checks can be arranged through reputable car mechanics and can often uncover issues that make it worth the cost (approximately $300).
- Use the Personal Property and Security Register (PPSR) to find out if the vehicle has money still owing on it, has previously been written off or is stolen.
- Read the used car warranties information on the Department of Energy, Mines, Industry Regulation and Safety (DMIRS) website to help you understand the warranties that apply when you purchase a second hand vehicle from a dealer. This also includes a list of vehicles that are not covered by statutory warranties and an overview of the parts that are/are not covered by a statutory warranty.
- If purchasing online or at auction, read through the terms of purchase provided. In most cases, there is no warranty or guarantee so if there is a problem with the vehicle you’re on your own.
Things to check before purchasing a new vehicle
When purchasing a new car, the manufacturer will provide a number of specified guarantees regarding the vehicle. These are generally for a limited period of time and may have stipulations as how the vehicle can be used.
Before purchasing a new vehicle, ask the dealership about the guarantees they provide. If your vehicle needs to withstand certain conditions (eg. it needs to regularly transport goods in excess of 100kgs in the boot), then ask if it can withstand those conditions before buying. If the dealer makes certain promises regarding the vehicle’s performance/capability, check they are covered in the manufacturer’s guarantee. If they aren’t, ask for them in writing.
How to get a post-purchase issue resolved
If you’ve driven away with the vehicle and found yourself facing problems later, any resolution will come down to:
- whether the vehicle has been purchased through a dealer or privately
- what is written in the terms of sale for the vehicle.
If you have purchased your vehicle from a dealer, your contract of sale and the ACL will outline what you’re entitled to and for how long. If you believe you are entitled to have a problem fixed by the dealer and are encountering issues, contact our business advisory service for help.
If you’re purchasing a vehicle privately, it will be up to you to pay for any repairs.
Tip
Have a ‘plan b’ to deal with disruptions
If you can’t operate your business without a vehicle, it’s important to have a contingency plan to help you prepare for the disruption. This could include:
- Speaking to your insurance broker to discuss coverage options for loss of income or hiring a replacement vehicle.
- Ensure you carry out regular maintenance and repairs with a reputable service provider.
- Prepare a risk management plan to help you identify and assess the risks to your business if your vehicle is unexpectedly offroad.
More information
For more information on the help you are entitled to when purchasing a vehicle from a dealer:
- read the ACCC’s consumer guarantees guide for business
- refer to the used car warranties information on the DMIRS website
If you’re in need of advice on how to remedy an issue with a vehicle purchased from a licenced dealer, or any other business to business dispute, contact our business advisory service.
