Commissioner's blog: Be in the know about demos

This announcement is for: 
ConsumerMotor industry

There’s a lot to like about demonstrator vehicles – they’re practically new cars with very few kilometres that sell for cheaper prices than you’d otherwise pay for a genuine new motor.

Another bonus is that clock only starts ticking on the time aspect of the manufacturer’s warranty (e.g. 5-years) on the date of purchase by a consumer and not while it’s in the dealership’s possession. Conversely, the distance aspect of the warranty (e.g. 100,000km) will be less the kilometres already travelled when the new owner takes possession.

We were recently concerned to learn of a consumer who purchased what they presumed to be a demo car, but was instead told by the dealership it was ‘dealer pre-owned’ meaning the warranty had started two years earlier on the date it rolled off the production line.

This rang alarm bells with our Automotive Branch because according to the Motor Vehicles Act, a ‘dealer pre-owned’ vehicle is not a legally recognised term.

Under the legislation, a motor vehicle can only be considered ‘new’, ‘second-hand’ or as a ‘demonstrator’, meaning the ambiguous phrase ‘dealer-owned’ is nothing more than industry jargon that we believe causes confusion.

Our investigation resulted in the dealer confirming our position that the vehicle was in fact a demo vehicle with a 5-year manufacturer’s warranty that should have instead started on the purchase-date.  

In addition to manufacturer warranties, consumers are entitled to certain guarantees under Australian Consumer Law (ACL), including that the vehicle is safe, fault-free and matches the description outlined by the dealer. For example, a car’s airbags should work and if metallic white is the description, a different non-metallic colour car should not be supplied.

These ACL rights may in turn mean that any extended warranty offered could be unnecessary, as it could result in a consumer paying extra for a repair or replacement they are legally entitled to for free.  Always ask – ‘what does the extended warranty get me that I would not already be entitled to under the Australian Consumer Law?’

Consumers should know that they don’t have to deal with the manufacturer directly when a product is faulty – a retailer should do this on the consumer’s behalf.

If you’ve got any car warranty concerns, you can email or call 1300 30 40 54.

Commissioner for Consumer Protection Lanie Chopping
Commissioner for Consumer Protection Lanie Chopping, by CP Media
Consumer Protection
Media release
13 Aug 2020

Share this page:

Last modified: