ACL guarantees for a motor vehicle

This page is for: 
ConsumerMotor industry

The Fair Trading Act (Australian Consumer Law) creates ‘consumer guarantees’.

A consumer guarantee does not need to be written down in the contract. It is 'guaranteed' by law.

Consumer guarantees are ordinary contract terms that are automatically added into any contract between a seller and a buyer - regardless of whether the seller and buyer actually agree on the term. They impose minimum standards of quality on dealers and manufacturers.

They make sure that consumers who buy seriously defective vehicles can go back to the manufacturer or dealer and have the defect fixed regardless of whether they were given a written warranty.

In most circumstances, these guarantees are imposed equally on dealers and manufacturers and apply regardless of what manufacturers state in their written warranties.

Consumer guarantees also apply to second-hand vehicles, but in this case any claim will be against the dealer only. A consumer guarantee will not apply to defects shown to the buyer before the sale.

Consumer guarantees require vehicles sold to:

  1. Be of acceptable quality;
  2. Be fit for the purpose for which they were acquired;
  3. Correspond to any description attached to the goods prior to the sale; and
  4. Correspond to any sample of the goods that was offered to the consumer prior to the sale.

The main guarantees are those relating to the acceptable quality of the goods, and their fitness for purpose.

A used vehicle is of 'acceptable quality' if for a reasonable period after purchase you can drive it from A to B in reasonable safety.

For a new vehicle to be of acceptable quality it should be free from manufacturing defects for a reasonable period.

If a vehicle is not of acceptable quality or a manufacturing defect has become evident during a reasonable period after purchase, the manufacturer has an obligation to remedy the defect. A reasonable period is usually regarded as the warranty period provided by the manufacturer.

If you buy a vehicle, planning to use it for a particular purpose, you should tell the seller about the intended use. If you do this and it turns out that you cannot use the goods in the way you intended, you can enforce the consumer guarantee of 'fitness for purpose'.

If a vehicle is unsafe or substantially unfit for the purpose for which it was bought, and incapable of being easily remedied within a reasonable time, you may be entitled to a replacement vehicle or refund.

Share this page:

Last modified: