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Used Car Warranties: What You Should Know

  • Nov 07, 2017

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Most things come with a warranty under Australian consumer law. A warranty is a promise from a manufacturer to fix faults that occur within a predefined period, known as the warranty period. Cars, like any other goods sold in Australia, come with their own car warranties. These change depending on whether the car is new or used, and whether you’re buying from a dealer or a private seller.

What’s Usually Covered

A car’s warranty generally covers the vehicle and any accessories fitted at the time of sale. If a defect occurs within the warranty period, it’s the dealer’s obligation to fix it free of charge. The car should always be in reasonable condition for its age.

The battery of a new car is often covered by the car’s warranty, but not in a used vehicle. When you replace a battery, the battery itself comes with its own manufacturer’s warranty valid from the date of purchase.

Types of Warranties

There are three types of car warranties:

   New car statutory warranty. This covers you for 12 months or 20,000km, whichever comes first. This should, in most cases, cover all defective items in your car.

   New car manufacturer’s warranty. This should be longer than the statutory warranty, and is typically either 2 year/40,000km or 3 year/60,000km. The distributor will have the specific details for the car you’re looking at.

   Used car statutory warranty. This only applies to dealer or auction house-sold used cars that are under 160,000km, younger than 10 years old, and don’t exceed the luxury car tax threshold. This warranty is only valid for 3 months or 5,000km, and covers most items relating to safety, reliability, and roadworthiness.

Used Car Warranties

Only used cars sold through a dealer come with a statutory warranty. Cars bought and sold through private sellers have no warranty. That’s why it’s important to thoroughly check any vehicle purchased through a private seller prior to purchase, as you have little course of action if something goes wrong.

As stated above, the warranty on a used car purchased through a dealer is only valid for cars with less than 160,000km on the odometer and under 10 years old. The warranty period is 3 months/5,000km.

This being said, while the warranty on a used car is very limited, there are consumer laws in Australia which give you as a buyer a number of guarantees. These are regardless of where the car was bought, from whom, or even what the warranty itself is.

Under Australian consumer law, you are guaranteed that the vehicle you buy:

  is of acceptable quality

  matches any description or demonstration model

  is fit to use in normal road conditions (or normal conditions for that vehicle, such as an off-road vehicle)

  is legally available for the business to sell

  comes with the right for you to own and use it

  doesn’t have any undisclosed money owing on it

  will have spare parts and repairs available for a reasonable time

  will live up to any other promise that the business makes about its quality, condition, performance or characteristics.

These guarantees cannot be signed away. It’s important to note that they do not cover:

  accidental damage due to your own misuse or negligence

  anything that you fitted to the vehicle after the time of sale.

What If a Car Doesn’t Meet the Guarantee?

This will change from state to state, but generally will depend on the scope of the “failure”. For example, in Queensland a good or product, such as a car, has a major failure if:

  the consumer would never have bought it if they knew about the problem

  it’s dangerous to use

  it’s very different from a description, sample or demonstration model

  it’s broken and can’t be repaired easily, which means they can’t fulfiltheir usual purpose, or the purpose that the consumer bought it to do (as long as they told you first).

In these cases you’re effectively entitled a refund, a swap for something of similar value, or to be compensated for the drop in value of the item.

Any fault not listed above is a “minor” failure, and it’s up to the seller how to deal with it.

Understanding Limits to Guarantees When Buying Used

It cannot be stressed enough: if you know there’s a fault with a used vehicle when you purchase it, it is not covered by any warranty or guarantee.

For example, you cannot buy a car in winter that is advertised as having faulty air conditioning, then try to return it when summer arrives and you realise you need working air conditioning. You knew the fault existed when you purchased the vehicle.

On the other hand, you as the buyer need to be clear on what you expect from the vehicle.

It’s reasonable to assume anyone buying a motor vehicle will use it to get to and from school or work locally. But if you need a car to do three-hour return trips on the highway five days a week but don’t tell the seller, and the vehicle fails under these conditions, you aren’t covered.

If you tell the seller this is how you intend to use the vehicle and they assure you it can manage it and it then fails, then you are covered.

Making Claims

If your vehicle is under statutory warranty and requires repairs, you must give written notice to the warrantor of the defect. The warrantor for a used car is typically the dealership or auction house you bought it from.

The warrantor must then decide if the defects are covered by the warranty, respond within 5 days, and instruct you on how to get the vehicle repaired.

If they don’t reply in 5 days, it is assumed by law that they accept the warranty covers the defects and that they are responsible for repairs.

Getting Repairs

You will need to get the car either to the warrantor, or an authorised repairer of their choice.

Your vehicle must be repaired within 14 days. Your warranty is extended by each day the vehicle is under repair. So, if the vehicle takes 14 days to repair, your warranty is extended by another two weeks.

There are limits to how far away the repairer can be from the warrantor. The repairer must be within 20km of the warrantor unless agreed upon, and if you’re 200km from the warrantor they must nominate someone local to you or pay for delivery costs.

Resolving Disputes

You should always try to resolve any and all disputes with the dealer or seller first. If you’re unhappy with their response, then you should make a complaint to the Office of Fair Trading.

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