New Car Statutory Warranty Report

A report by Professor Allan Fels, (former) Chairman of the Australian Competition and Consumer Commission.

A common concern for new car owners is the right to have someone, other than the dealer, service the car without putting warranties at risk. Judging by the large number of calls receive by the ACCC many buyers are uncertain.

To put the record straight, dealers cannot declare a warranty void if the buyer has the vehicle serviced by someone else. the buyer, however, has an obligation to ensure that the selected service centre employs qualified staff, that servicing matches manufacturer's specifications and only genuine or appropriate quality parts are used. If the centre implies that it can perform genuine servicing but falls below expectations then the customer has rights and remedies against it regardless of staff qualifications.

Where a problem arises (other than in servicing) and it is covered by the warranty, the vehicle should be taken to the dealer for repair.

Under the Trade Practices Act dealers cannot limit their warranty obligations or claim the warranty is void if the vehicle is serviced by someone other than the dealer or its agent. The statutory warranty applies to new and second hand cars. A consumer expects a second hand car to run effectively without repairs although, depending on price and age, it may not be expected to last as long as, or perform to the same standard as a new car. The warranty does not apply to cars sold for spare parts or one bought at an auction. At auctions the seller's only obligation is to give clear title with no legal restriction on ownership.

The Act prohibits anti-competitive exclusive dealing which can involve a business attaching conditions to the sale of goods thereby restricting the buyer's freedom to choose who they deal with; in the case of a vehicle, who will service it.