What are your consumer rights if you've bought a lemon?

7 Nov 16

No one wants to end up with a lemon when buying a used car, and yet Australia is a little on the sour side when it comes to the quality of some of the vehicles on offer.

We recently analysed 154,035 car history reports and found that a huge 22.2 per cent of vehicles had issues. With more than a million Aussies looking to buy a second-hand car in the coming 12 months, it leaves a lot to be desired1.

The good news is that these lemons were easy to avoid through a CarHistory report. But what if you've already bought a car that's performing less than satisfactory? What are your legal rights?

Do you know which laws cover you if you've bought a lemon at an auction?Which laws cover you if you've bought a lemon at an auction?

Dealers and auctions

Manufacturers, dealerships and auction houses are bound by Australian consumer law to provide automatic guarantees on the goods you buy from them, including your car - used or new.

These sellers also provide a statutory warranty, which backs the quality of the car and gives you options if it doesn't live up to them.

Sellers must not mislead you about the car's price, make, quality or performance, and will be tasked to repair, replace or refund a product that is not sold in good faith.

However, as the Australian Competition and Consumer Commission (ACCC) states, you can not claim any of these things if you've simply changed your mind after the purchase, damaged the car or found a better deal2. The same goes if you bought the car despite the seller advising you that it wouldn't match your needs.

In these situations, it's at the seller's discretion whether they provide you with a refund or replacement.

If you're looking for a more specific answer to whether you have consumer rights in your state or territory, the ACCC website will be your best port of call.

Private sales

If you're buying from a private seller, you wave some of the consumer protection given to you by law.

You won't be entitled to a cooling-off period, and the car comes with no statutory warranty. The seller also doesn't have to give you a certificate from the Personal Properties Securities Register, unlike a dealer, manufacturer or auction house.

However you're planning to buy your used car, a CarHistory report can help you avoid some of these mistakes in the first place, ensuring you can make an informed decision.

There are pros and cons to private sales - do you know what they are?There are pros and cons to private sales - do you know what they are?

1AutoTalk, New cars, F&I boom leaves used cars the 'biggest loser'. Accessed September, 2016.
2Australian Competition and Consumer Commission, Consumer guarantees. Accessed September, 2016.