Breakdowns of deals between car manufacturers and dealers is leaving consumers with poor service at a premium price, according to the ACCC.

The Australian Competition & Consumer Commission found imbalances among dealer agreements, policies and procedures meant that significant costs were being put on dealers that ultimately affected consumers. The biggest faults were found when it came to warranty and repairs, with many manufacturers often trying to “handball” responsibility for alleged faults unto dealers rather than absorbing the costs directly.

“The ACCC is concerned that some car manufacturers are shifting their consumer law obligations onto dealers. While consumers will generally make first contact with a dealer when seeking a car refund, replacement or repair, dealers are entitled to seek reimbursement for those remedies from the manufacturer where the manufacturer is responsible for the failure,” Mr Sims said.

“The ACCC believes that some car manufacturers have policies and procedures about how dealers respond to consumer guarantee or warranty claims which may limit a dealer’s ability to provide a car refund, replacement or repair to a consumer.”

The findings come as part of the New car retailing industry market study that the ACCC commenced in June 2016. The study focused on the following issues consumers face when purchasing a new car:

  • access to repair and service information and data and post-sale service arrangements
  • consumer guarantees and warranties, and
  • fuel consumption, emissions and car performance.

“Information provided to the ACCC indicates that there may be stringent requirements being set by some manufacturers to establish a remedy is warranted before approving reimbursement to the dealer. There may also be predetermined maximum amounts that dealers are permitted to spend on repairs without further approval by manufacturers,” Mr Sims said.

“Many dealers believe that if they do not comply with these requirements, their franchise or dealer agreement will be put at risk. Consequently, dealers may be reluctant to offer remedies without certainty of being reimbursed, which may reduce consumers’ access to appropriate or timely remedies.”

When making purchases for your fleet or for yourself it is important to be aware of your rights as a consumer. Make sure to buy vehicles that suit your business or personal needs and request all guarantees promised by the dealership are given in both a written and verbal form. The Australian Consumer Law (ACL) is there to protect buyers from being caught off guard by dodgy, unlawful or accidental processes by both manufacturers and dealers.

You can read the draft report here. The full findings are expected to be released by the end of 2017.

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