Decision Regulatory Impact Statement: Review of the Motor Vehicle Dealers Act 1973 and the Motor Vehicle Repairers Act 2003 (final report) July 2019
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.
Background to the review
The Department of Mines Industry Regulation and Safety recently completed a combined review of legislation regulating motor vehicle dealers and repairers. Cabinet has endorsed the recommendations made by the Review. The Decision Regulatory Impact Statement outlines the issues raised during the Review; reports on stakeholder input to the Review; assesses options; and makes a number of recommendations for change.
Key reforms: Dealers
Introduction of cooling off periods for linked finance contracts
A cooling off period will be introduced and will apply specifically to contracts where the purchaser obtains their finance through the dealer. Sometimes known as linked finance, car buyers in this situation will have a three day cooling off period to decide whether to proceed with the purchase. A maximum $100 termination fee will apply if the purchase doesn’t go ahead. Having a cooling off period brings WA into line with most other states.
Currently a dealer can charge a purchaser an amount of up to 15 per cent of the total purchase price of the vehicle as pre-estimated liquidated damages if the purchase doesn’t proceed. This will change to a maximum 5 per cent and will apply to those purchases which don’t have a cooling off period.
Salespersons employed by dealers will no longer be required to be licensed
The Review concluded that salespersons having to obtain a licence before they can start work can no longer be justified, and that checking the suitability of prospective employees should be the responsibility of the employing dealer. This reduces the regulatory burden and streamlines the process for dealers giving them more discretion and flexibility in recruiting suitable salespersons. This change will also reduce barriers to employment for salespeople. Dealers will have to make sure that a salesperson has completed any industry training that has been approved by the Commissioner for Consumer Protection.
This change will have a lead-in period of three years after amendments have been made to the law.
Key reforms: Repairers
New requirement for renewal of repairer certification every three years
At present, an individual repairer’s certificate (tradesperson) is perpetual, meaning that it does not have a specified duration. The register that records the details of repairers is becoming increasingly out of date. Having an inaccurate register is costly for government and counter to the intent of the legislation. The Review concluded that a requirement for tradespersons to update their details every three years should be introduced but that the process should be simple to complete and low cost.
Repairers will have a grace period in which to comply with renewal requirements once the law is changed. This approach is consistent with NSW which has moved from perpetual certification to requiring three yearly renewals.
Removal of fitness criteria for individual repairers
The Review also concluded that requiring tradespersons to meet the fitness criteria imposes considerable burden on applicants and is considered an unnecessary barrier to work in the industry. As with many other areas of employment, fitness checks (for example, requiring a criminal history check) should be a decision for individual businesses to make. Removing the fit person criteria will relieve tradespersons of the cost associated with meeting this requirement and streamline the certification application process.