Don’t be misled about warranty rights when buying a demo car

This announcement is for: 
ConsumerMotor industry

Consumer Protection is reminding buyers of demonstration vehicles that they are entitled to the full term of the manufacturer’s warranty in terms of time, and the clock only starts ticking from the date of purchase.

The warranty on a demonstration vehicle is only affected in terms of distance travelled, with the odometer reading at the time of purchase allowed to be deducted.

For example, a 5 year warranty is effective for 5 years from the date of purchase. A warranty of 100,000km would become 100,000km minus, let’s say, 5,000km on the odometer of the demo vehicle.

Acting Commissioner for Consumer Protection David Hillyard said the time aspect of the warranty is not up for negotiation.

“Demo vehicles are often an attractive alternative for consumers seeking a new car at a reduced price, but dealers should not be incorporating time reductions on the warranty as part of the discussions for a cheap sale,” Mr Hillyard said.

“This right is enshrined in the Motor Vehicle Dealers Act, so it is illegal for motor vehicle dealers not to offer buyers the full time length of the manufacturer’s warranty.

“Likewise for people who have bought a second-hand vehicle with the balance of a new car warranty. That warranty period should start when the vehicle was first sold to a customer, not when it was registered in the dealers name or when it was ordered from the manufacturer.

“If you are the first customer to own the car and the dealer or manufacturer claims that the warranty began when the vehicle was registered, usually when it was delivered to the car yard, then this is misleading and this tactic should be reported to Consumer Protection.

“Also, dealers should not mislead the customer when advertising the sale of demo vehicles by suggesting that the full warranty is something ‘thrown in’ as a sales incentive rather than it being the customer’s legal entitlement.

“Often consumers are not aware of this issue until they have to make a claim closer to the end of the warranty period and a dealer may say the warranty has run out, referring to the registration date rather than the purchase date.

“In these circumstances, consumers should enforce their rights and demand the warranty operates for the full time period from the date of purchase.

“If disputes over warranties between the dealer and consumer can’t be resolved, contact Consumer Protection and we will assist in resolving the matter which may involve reminding dealers of their obligations under the law.”

More information on buying a vehicle is available on the Consumer Protection website or enquiries can be made by email or by calling 1300 30 40 54.

A factsheet on buying a vehicle for consumers is also available online.


Media Contact (Consumer Protection) 


Consumer Protection
Media release
11 May 2017

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