What are your rights if you purchased a faulty car from a trader?

A person bought a car from a trader for $4,000. She made a claim to the Motor Vehicle Disputes Tribunal to seek a refund as the car had suffered an engine failure and other defects. The Tribunal dismissed her application for a refund but granted her compensation equivalent to the reasonable cost of repairing some defects.

The law provides protections to consumers to ensure they receive fair treatment if they have purchased a faulty vehicle from a registered trader.

You can search on the Motor Vehicle Traders Register to see if the trader you have been dealing with is registered. 

Generally, the trader and the manufacturer should guarantee that the goods they supply to a consumer are of acceptable quality. The test of whether a car meets the guarantee of acceptable quality is objective, meaning it is not determined based on the consumer’s view.  

Is a “faulty car” of acceptable quality?

The question the Tribunal had to determine was whether the vehicle that was purchased was of acceptable quality. The law sets out the following factors that are considered to determine whether a product is of acceptable quality:

• The product is fit for purpose; and 
• The product is acceptable in appearance and finish; and
• The product is free from minor defects; and
• The product is safe; and
• The product is durable.

Additionally, the product would be regarded as of acceptable quality if a reasonable consumer is fully aware of the state and condition of the product by considering all relevant circumstances of the supply of the product, including any hidden defects that may have been present. 

In the present case, the Tribunal found that the engine failure did not amount to a failure of the guarantee of acceptable quality. This is mainly because a reasonable consumer would have expected an old car of this price and high mileage to encounter the need for ongoing and unplanned maintenance and repairs. 

What remedies are available if you bought a “faulty car”?

• If the defect is minor and can be fixed, you can require the supplier to repair it within in a reasonable time.
• If the supplier refuses or neglects to repair the defect upon your request, or fails to repair it within a reasonable time, you can repair the defect elsewhere and obtain all reasonable costs from the supplier or reject the car according to the law.
• If the defect cannot be fixed and is a failure of the guarantee of acceptable quality, you may reject the car, or you may obtain damages from the supplier in compensation for any reduction in value of the car below the purchase price. 

Despite this, a consumer may lose their right to reject a faulty car if they have not exercised the right within a reasonable time, or the car was damaged after delivery to the consumer for reasons not related to the car’s condition at the time of supply.

If you incur extra costs due to a faulty car, such as towing fees or a mechanic’s defect report, you may be able to claim reimbursement from the trader as a consequential loss. However, legal fees are generally not recoverable unless the case goes to the Court and costs are awarded.

If you believe you have been sold a faulty car, you can start by contacting the trader to make a claim in writing. If necessary, you could escalate the matter to the Tribunal. 

If you are dissatisfied with the decision given by the Tribunal, or the amount of the dispute is beyond $100,000, you may make an application to the District Court. If there is confusion around the correct course of action to take when seeking to remedy a faulty good that you bought, it pays to seek legal advice from a professional with experience in the area.

Leading law firms committed to helping clients cost-effectively will have a range of fixed-price Initial Consultations to suit most people’s needs in quickly learning what their options are.  At Rainey Collins we have an experienced team who can answer your questions and put you on the right track.