What is the Australian Consumer Law? : Is my car still covered outside of the manufacturer warranty?

When it comes to buying a new car, the options are both daunting and almost endless. For the most part, a new car purchase is a rewarding and exciting time â€" until something goes wrong.

Reader Aiden Smith contacted CarAdvice to find out whether he could still ask the manufacturer to repair his car outside of its new car warranty.

Q: Hello. I purchased a [make and model omitted] in January 2012 with a three year manufacturer’s warranty. I use my car to tow our small caravan and purchased it for the sole purpose of towing. The car has a towing capacity of 3000kg and my caravan is only around 1200kg with fluids on board.

Recently I noticed that the camber on the rear wheels has tiled in so much that the car looks strange when the caravan isn’t connected. The car is now outside of its warranty period â€" should the manufacturer still be liable for this? How does the Australian Consumer Law and consumer guarantee apply for this type of situation? My car has been regularly services with [manufacturer omitted] and the tow bar was fitted with the vehicle at purchase.

A: Thanks for getting in touch, Aiden. You have raised a very interesting point and one that we have wanted to cover for some time.

Some people think that they can demand anything from a manufacturer during the warranty period and that they will act on a whim. Conversely, some people think that once the warranty period is over, dealings with the manufacturer immediately cease and there is no further coverage available for failures or defects.

We will try and dispel some of the myths and give you, the consumer, a better idea of what options are available to you when something goes wrong. Keep in mind that this shouldn’t be considered legal advice. If you are having issues with a manufacturer and would like to take legal action, you need to consult with a lawyer or legal professional.

Introduced on January 1^st, 2011, the Australian Consumer Law (ACL) replaces previous consumer protection laws in the Commonwealth, states and territories. The ACL covers the rights of consumers and the guarantees they are afforded in the event of major, minor and minor failures not repaired within a reasonable timeframe.

The new ACL applies under the following circumstances:

• Vehicles that were purchased after the 1^st of January, 2011
  • Any type of product or service under $40,000
  • Any type of product of service over $40,000 as long as it is for personal, domestic or household purposes.
• Vehicles that were purchased before the 1^st of January, 2011
  • Any type of product or service purchased before the new ACL was implemented is covered by statutory implied conditions and warranties under the Trade Practices Act 1974 and state and territory legislation in force before 1 January 2011.

In terms of coverage, the ACL gives consumers guarantees that protect them against unacceptable quality under the heading of major and minor failures during and after the manufacturer warranty period.

Unacceptable quality is subject to a test to determine whether a reasonable consumer would consider the quality of their product or service to be durable, safe, free from defects and/or fit for purpose, amongst others.

The test then aims to determine whether the unacceptable quality event is a major or minor failure of the product of service. There are certain exclusions to this quality test, which are further outlined in the ACCC guidelines attached below.

If you do have an issue with your vehicle, you first need to determine whether it’s a major or minor failure. The ACCC considers the following examples as falling under the category of major failures:

• The consumer would not have purchased the vehicle if they knew it would spend more time off the road than on the road.
• The motor is significantly unfit for its intended purpose, such as a utility rated to tow 3500kg can only tow 1500kg.
• The vehicle is unsafe, such as the brakes sometimes don’t work, or the car switches off and loses power steering while in motion.

If the failure is considered to be a major issue, the consumer is entitled to reject the motor vehicle and request a refund or equivalent replacement vehicle, or keep the vehicle and request compensation commensurate with the decline in value.

A minor failure on the other hand carries different obligations and guarantees for the consumer. Initially, the consumer cannot ask for a refund or replacement for a minor issue, but the vendor is entitled to fix the problem within a reasonable time as long as the failure didn’t occur due to abnormal use. The ACCC considers the following examples as falling under the category of minor failures:

• A car develops a rattle and is returned to the dealer for repair.
• A car has electrical issues that cause the radio not to work on occasion.

Using the two examples above, the consumer is entitled to have these issues repaired within a reasonable amount of time and cannot ask for a refund or replacement.

If, on the other hand, the consumer needs to return several times to have the issue repaired, but it doesn’t get fixed, they are entitled to find somebody that can fix the issue and bill the vendor for the repair, or consider it a major failure and demand a refund or replacement.

All of the above examples assume the owner of the vehicle hasn’t submitted it to what the ACCC considers ‘Abnormal Use’. Abnormal use is considered to be a use of the vehicle beyond its design. For example, leaving a convertible vehicle open in the rain and expecting the vendor to replace the interior.

Additionally, minor and major failures have a rejection period. The rejection period exists outside of the manufacturer warranty and is deemed to be a period from which the vehicle was purchased when a major failure is likely to occur.

So, for example, if you bought a new car yesterday and in four years time the engine fails and will no longer start, so long as the vehicle wasn’t used abnormally, it would be considered a major failure, despite being outside of the manufacturer warranty.

Used cars also come with consumer guarantees under certain circumstances.

If you are in a position where you have a defective vehicle and the vendor is not giving you the attention required to resolve the issue, please consult the document featured below and seek legal advice if required to take the matter further.

It’s also worth remembering that maintaining car servicing through official channels ensures that the vendor can work with you to detail the vehicle’s service history and that all previous repairs were made with genuine vendor parts.

Based on discussions we have had with manufacturers, they have all agreed that they will always try their absolute best to resolve an issue with a customer in good faith. Taking your car to mechanics that fit non-genuine parts can void that mutual good faith. To ensure you are covered and maintain that good faith relationship, it’s always worth ensuring your service your car as per the manufacturer’s recommendations and always use genuine OEM parts.

In your case, Aiden, it would be worth bringing this up with your dealer manager and suggesting that they provide a suitable solution to rectify your issue.

For more information on the Australian Consumer Law, check out the official fact sheet that covers all the relevant points here.