Changes to laws covering vehicle sales and repairs in WA
Changes to pre-estimated liquidated damages
From 1 January 2022, the maximum amount of pre-estimated liquidated damages that a dealer may charge is five per cent.
A cooling off period for vehicle sales involving linked finance, removal of special warranties, reduced fees for contract cancellations and the scrapping of sales representatives’ licences are some of the proposed law changes covering the WA motor vehicle industry.
Proposed amendments to the Motor Vehicle Dealers Act and the Motor Vehicle Repairers Act follow a broad review of the legislation involving extensive consultation with the industry and community. All recommendations of the review have been approved by Cabinet.
For vehicle sales, the proposed changes will involve:
- A three day cooling off period for motor vehicle sales that are linked to dealer finance, either offered in house or as a referral to a credit provider (a flat $100 fee will apply);
- A maximum five per cent charge for the termination of a sales contract, replacing the current maximum 15 per cent ‘pre-estimated liquidated damages’ provisions;
- Removal of special warranty provisions for used vehicle sales, relying instead on the consumer guarantees under the Australian Consumer Law to protect buyers;
- Salespeople no longer having to be licensed but licensed dealers will have the obligation of ensuring their sales staff have the appropriate experience, skills and training; and
- Improved disclosure requirements for dealers relating to whether a used vehicle is a repairable write-off or has had its engine replaced.
Commissioner for Consumer Protection David Hillyard said the proposed law changes are designed to reduce red tape and to modernise the laws which protect what is a major purchase for most consumers.
“We believe that the changes to the laws strike a fair balance that provide appropriate protections for consumers while maintaining the commercial viability of businesses operating within the motor vehicle industry in WA.
“Separate warranties for used vehicle sales are no longer required with the consumer guarantees within the Australian Consumer Law providing adequate protection for buyers, so vehicles will be treated like any other consumer product.
“The cooling off period for sales linked to finance gives consumers the opportunity to review their decision to purchase under those circumstances and brings WA in line with most other States.
“Having a set, low contract termination fee prevents the current situation where consumers in many cases face losing thousands of dollars if they want to pull out of the deal. Likewise the amount better reflects the actual losses incurred by the dealership.”
For vehicle repairs, the changes will involve:
- Certification for individual repairers to be renewed every three years, replacing the current one time only applications;
- Removal of the requirement for individual repairers to show they are ‘fit and proper’ with a focus on their qualifications, but repair business owners’ fitness requirements will remain; and
- Simplifying licensing requirements for mobile repair businesses, reducing their costs.
“Having to renew licences for individual repairers will mean that Consumer Protection will always have an updated database of industry participants but the cost of renewal will be kept low,” the Commissioner said.
Before any of these changes can commence, amendments to the existing laws will have to be drafted and passed by the Parliament. In many of these areas, a transition period will also be allowed in order for the industry and individuals to make the necessary preparations and adjustments to comply with the new laws.
The review’s final report in the form of a Decision Regulatory Impact Statement (DRIS) can be viewed on the Consumer Protection website.
Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / firstname.lastname@example.org
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