The ACCC last week released the final report from its market study into Australia’s new car retailing industry following 18 months of extensive research, investigations and consultation with industry and consumer groups.
“The ACCC recommends several reforms to improve the new car retailing industry, which should lead to better outcomes for consumers. Some will require industry led change and others, we consider, require regulation,” ACCC Chairman Rod Sims said.
The final report’s three key observations are:
- car manufacturers need to update their complaint handling systems and improve their approach to the handling of consumer guarantee claims
- a mandatory scheme should be introduced for car manufacturers to share technical information with independent repairers
- new car buyers need more accurate information about their cars’ fuel consumption and emissions.
Having supported thousands of people with car problems over the years, Consumer Action Law Centre has welcomed the ACCC’s report. Car problems account for around 20% of calls to Consumer Action’s legal advice line alone. Consumer Action CEO and CFA Chair Gerard Brody says this shows there are big problems with car defects and dispute resolution.
‘People are not receiving good information about their consumer rights from car dealers, and they are having big problems enforcing these rights when things go wrong. Manufacturers have also tried to stop people sharing their stories by using non-disclosure agreements. ’
‘We agree with the ACCC that there is a lack of effective independent dispute resolution options for consumers, which is why we recently launched our Fix My Car campaign that aims to make resolving car disputes easier.,’ said Mr Brody.
Mr Brody also strongly supported the ACCC’s recommendation to require car manufacturers to share technical information with independent repairers.
‘Australians are currently getting a dud deal when it comes to car servicing and repairs. Car parts are getting more expensive, and people often feel they have to get their car serviced and repaired at the dealer. The ACCC’s recommendation should make this market much more competitive.’
Mr Brody noted that there was still more work to do on extended warranties.
‘Car buyers often find themselves subject to high pressure sales tactics by car salespeople trying to earn extra commission on useless extended warranties. We think the ACCC should follow ASIC’s lead by looking at a deferred ‘opt in’ period for warranties that aren’t covered by ASIC’s work on financial products.
‘A deferred ‘opt in’ period will give people time to consider whether a warranty is worth it. The Australian Consumer Law already provides consumer guarantee rights, and people can be tricked by car dealers to think that warranties are needed if things go wrong’.