Commissioner's column: Warranties for demo cars

This announcement is for: 
ConsumerMotor industry

With Acting Commissioner for Consumer Protection David Hillyard

With the end of the financial year fast approaching many car dealers may use the month of June to offer deals to potential buyers to increase their sales volumes for the year.

Car-buyers need to be mindful of the warranties that apply to vehicles purchased during this time.

Demonstration models are often an attractive alternative for buyers seeking a new car that may be offered at a reduced price.

Consumers should be careful not to be misled (by advertising or during the negotiation of the sale) into representations that the full warranty is something the dealer has ‘thrown in’ as an incentive to close the sale because it is actually the customer’s  legal entitlement.

WA’s Motor Vehicle Dealers Act states that the purchaser of a demonstrator vehicle is entitled to the full time period of the manufacturer’s warranty from the date of purchase. This means the manufacturer’s warranty does not start from the time the vehicle was registered by the dealer. It starts from the date that you sign the contract to buy it. 

However, the kilometres travelled (which should be minimal on a demo) WILL be deducted from the distance aspect of the warranty.

So, if a car has a warranty of 5 years or 100,000km you would get a 5 year warranty from the date of purchase or 100,000km minus the odometer reading of the demo vehicle at the time of sale.

It is the consumer’s choice whether to purchase an extended warranty, which is often offered during the negotiations, but this should not be seen as a means to cover the time period since the dealer registered the vehicle.

In addition to rights under the Motor Vehicle Dealers Act, consumers are entitled to certain guarantees in accordance with the Australian Consumer Law.

These warranties include that the car 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.

As the days tick down in June, the momentum for more attractive sales offered by dealers may gather pace.

As a result, consumers should be mindful not to rush their car purchase just to meet the June 30 deadline. Once you make a written offer, there is no cooling off period to change your mind on motor vehicle sales in Western Australia.

Consumer Protection is aware of consumers being caught out when signing to ‘put a car on hold’, when in fact they are signing to buy.

If a salesperson tells you that you are signing just to hold the vehicle while you decide, that’s not the case – it is your offer to buy the car. 

Once your offer is accepted you have entered into a binding contract.

Car dealers can charge up to 15% of the purchase price as liquidated damages if a consumer pulls out of the deal without justification.

It is very important that consumers are not pressured into signing a contract for the purchase of a car.

If this happens and you need assistance you can email consumer@commerce.wa.gov.au or call 1300 30 40 54 during office hours.

Commissioner for Consumer Protection David Hillyard
Commissioner for Consumer Protection David Hillyard, by CP Media
David Hillyard, Acting Commissioner, by CP Media

 

Consumer Protection
Department News
14 Jun 2016

Share this page:

Last modified: