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#Lemon laws protect you: Car News

You used to have Buckley's chance of returning a dreaded lemon to the car dealer for a replacement or a refund.

As for being compensated for the inconvenience, aggravation, lost income and costs racked up while taking the car from hell to the dealer for a further non-fix under warranty, well, make that virtually no chance either.

Many Australian consumers have tried but only a few very determined people have succeeded, usually after long, expensive battles against squads of car company lawyers in various courts.

The new Australian Consumer Law (ACL), developed by the states and the Australian Competition and Consumer Commission, came into force on January 1 this year. It's not as tough as US lemon laws, but it gives you much more protection than the maze of state and federal consumer regulations you previously had to navigate to make a case that your car resembled a particularly bitter variety of citrus fruit.

The Australian Consumer Law applies to most goods and services, including new and used cars, except those bought at auction or private sale, where you're still basically on your own.

When you buy a car from a dealer, you now have the protection of legally enforceable consumer guarantees, including that the car is of acceptable quality (which includes being safe, free from defects and durable) and reasonably fit for any purpose you specify when buying it, such as towing.

If you have what the ACL calls a major failure with your car, you are entitled to return it to the dealer to claim a refund, or a replacement -- your choice of an identical new car or one of similar value.

A major failure is when a reasonable consumer would not have bought the car if they had known about the problem, or when the car is substantially unfit for its normal purpose.

In other words -- the car is a lemon.

If you have a minor problem with the car, the dealer is still allowed to fix it under warranty. If you have to get your car fixed at another workshop, you're entitled to claim the cost from the dealer who sold you the car.

However, if the dealer can't fix the problem within a reasonable time, you are also entitled to a refund or a replacement.

So the classic tactic of some dealers and manufacturers stringing you along by saying, "Just bring it back and we'll try to fix it under warranty'' time and again until the warranty runs out, will no longer work.

And when the warranty expires you are still protected by the ACL's consumer guarantees -- but a used car's age and kilometres since you bought it will be taken into account when determining your entitlements.

The ACL also addresses one of the other great traps of the car business -- the extended warranty. Many new and used car buyers have paid thousands of dollars for one of these, on the (mis)understanding that, first, it's the only way to cover themselves against repair costs when the factory warranty runs out and, second, that when they make a claim under the warranty, it will be honoured.

Those same car buyers have often found, to their great cost, that these extended warranties sometimes are not worth the paper they are written on.

They are, first and foremost, a way to increase a dealer's profit margin on the car. Most have very onerous conditions, including mandatory servicing schedules at the dealer who sold you the car. In the worst cases, consumers have called the helpline number on the warranty policy only to find there's nothing other than an answering machine on the other end of the line.

The ACL states that manufacturers and dealers must not pressure you into buying an extended warranty, or tell you that you have to buy one.

In fact, you now have rights under the ACL's guarantees that are equal to or greater than any supposed benefits you're paying for under an extended warranty policy.

If you think you've bought a lemon, the first step is to tell the dealer.

"You should go to the dealer who sold you the car and point out to them that they are legally obliged to provide you with a car that does what it is supposed to do under the ACL consumer guarantees,'' Katrina Lee from Choice says.

Dealers can no longer pass the buck by telling you to take your car's problems up with the manufacturer. The dealer is responsible, under the ACL, for providing you with a replacement or a refund. The dealer can then sort out reimbursement from the manufacturer. That's his problem, not yours.

However, the ACL also imposes similar customer guarantee obligations on manufacturers and importers, including car companies.

A manufacturer must guarantee, to you, the consumer, that the new car you have bought is of acceptable quality and matches the description on which you based your decision to buy it. A manufacturer must also guarantee the availability of repairs and spare parts for a reasonable time after you have bought the car.

If the manufacturer fails to meet one of these consumer guarantees, you also have rights against them.

You are entitled to ask for an amount covering the drop in value of the car as a consequence of the manufacturer's failure to meet any consumer guarantee.

You are also entitled to claim compensation for costs such as lost time, income or productivity caused by the problems with your car.

"We would hope that dealers understand that if they don't take these consumer guarantees seriously, then they leave themselves open to action from the ACCC,'' Lee says.

If the dealer wants to argue about whether your car is a lemon, tells you to keep bringing it back for warranty repairs or simply refuses to acknowledge your rights under the Australian Consumer Law, you should notify the ACCC, the federal regulator responsible for ensuring that dealers and manufacturers comply with the law, and contact the consumer tribunal in your state or territory, which will advise you on how to get some long overdue lemon-aid.

THE AMERICAN WAY

Most US states define a lemon as a vehicle with a significant fault that can't be fixed in three or four attempts, or is out of service for 30 days, in the first 12-24 months.

Some states allow only one attempt to fix a safety related fault, on the basis that a consumer should not have to risk his or her life several times for a safety defect.

California passed the first lemon law in the US in 1970 after a Ford lobbyist, who was asked how many times was reasonable to repair a vehicle under warranty, answered that sometimes even 40 was not enough for an elusive electrical problem.

Before the lemon laws, American consumers obtained only 500 refunds from manufacturers annually. Today there are more than 100,000 "buybacks'' each year. The laws also address the extended warranty trap

MR X had a few problems, over eight months, with his new 2001 model Falcon ute -- two failed motors, two failed clutches, one failed gearbox, engine noise and shock absorber woes.

A lemon? Not according to the NSW Consumer, Trader and Tenancy Tribunal which, despite finding that Mr X's ute was not of merchantable quality, was "satisfied that neither the dealer nor the manufacturer was aware of the defects before the sale of the car''.

It also found the dealer "had rectified all identified defects and, although the manufacturer took six months to identify the systemic problem, it did honour its warranty by providing replacement parts''. Mr X's claim for a refund or replacement was dismissed.

MR Y's new 2003 model Land Rover Freelander had two failed clutches, steering fluid leaks, wheel alignment, fuel injection and brake problems, a failed turbocharger and other faults. In all, these put it off the road for more than 100 days.

Despite finding the car's owner had "to some degree been inconvenienced'', the NSW tribunal rejected his claim for a refund, finding that he had "been fairly compensated'' with a hire car, towing and repairs.

THE Australian Consumer Law has specific consumer guarantees for services, which include car repairs and servicing.

They must be done with due care and skill and within a reasonable time. If there is a major failure with a service meeting a consumer guarantee, you can claim a refund or compensation for the difference between the service you asked for and the service you got.

If the dealer refuses to rectify the problem or takes too long, you can get someone else to fix it and ask the dealer to pay reasonable costs.