A man forked out $20,000 for a second-hand car that’s caused 'nothing but problems' and will cost more than double to fix.
A man forked out $20,000 for a second-hand car that’s caused 'nothing but problems' and will cost more than double to fix.

Aussie’s $45k dodgy used car nightmare

Welcome to Sisters In Law, news.com.au's weekly column solving all of your legal problems. This week, our resident lawyers and real-life sisters Alison and Jillian Barrett from Maurice Blackburn tackle your legal rights when it comes to dodgy used cars.

QUESTION: I bought a used car from a reputable dealership in my suburb last month, and since then, it has caused me nothing but problems. The latest estimate to repair what is wrong with it is $22,000 which is more than I paid for the car itself (it was $20,000 and I've spent close to $3000 getting various things fixed since then). The dealership says they won't take the car back because "that's the risk you take when you buy a used car". What are my rights when it comes to faulty used cars? - Josh, VIC

ANSWER: As lawyers we have to know a lot of Latin words, but even non-lawyers will know the phrase "caveat emptor" which means "let the buyer beware", so that the buyer is to assume the risk that a product may fail to meet expectations or have defects.

Despite this common phrase, you do have some protections under the law as a consumer.

In Victoria, and as you purchased the car from a licensed dealer, there is a cooling-off period of three clear business days.

The cooling off period is cancelled if you drive the car away during those three days, unless it is only driven for a test drive or to take it to a mechanic for an inspection.

Before buying a car you should:

• Ask to see the vehicle's service history, as if it has been regularly serviced by a qualified mechanic, you're less likely to have any problems with the car

• Consider having it inspected by RACV's vehicle inspection service, a Victorian Automobile Chamber of Commerce member, or a qualified mechanic

• Check if the car comes with a statutory warranty

• Obtain the Vehicle Identification Number and search the Personal Properties Security Register to check if there are any outstanding debts, the vehicle is stolen or has been written off

Whether or not you have done the above, you will have some legal and financial protection as you bought the car from a licensed trader.

The car will cost more than double to fix than the customer originally paid. Picture: iStock
The car will cost more than double to fix than the customer originally paid. Picture: iStock

These protections are in the Motor Car Traders Act and the Motor Car Guarantee Fund.

If the vehicle you bought is not more than 10 years old and has travelled less than 160,000 kilometres, then you must be provided with a three month or 5000 kilometre warranty. Provided you have driven less than 5000 kilometres since purchase, and because you've only had the vehicle for one month, the dealer must repair any faults to ensure the car is in reasonable condition for its age.

There are a number of defects that won't be covered, such as tyres, batteries, or damage caused by any misuse from you.

For the full list of defects that won't be covered you should review the Consumer Affairs Victoria list.

Even if you've driven more than 5000 kilometres you still have rights under the Australian Consumer Law (ACL).

Under the ACL, the car must match the description given to you, be fit for purpose and be of an acceptable quality.

As the car is faulty, your right to a remedy will be determined by whether the problem is major or minor.

A minor problem is something that can be fixed within a reasonable period of time, and you must allow the dealer an opportunity to repair it, whereas if there is a major problem then you are entitled to return the car or keep it and have the seller compensate you for the loss of value.

A car will have a major fault if it is unsafe (ie if you are travelling at 100km/hour on a highway and it suddenly loses power and stops without any warning).

You should speak with the dealer and try and resolve it directly - keep a record of these discussions if you're not doing it in writing, including who you spoke to, when and what was said.

If you're not able to resolve the issue with just a discussion then you should send a complaint letter by registered post or email and keep a copy so you have a record of it.

You will need to allow enough time for the dealer to receive and reply to your complaint, but if you haven't heard from them within a week of them receiving the complaint, you should follow up.

If you're unable to resolve the problem yourself then Consumer Affairs Victoria may assist via their voluntary dispute service and you can contact them here.

You may have a right to compensation via the Motor Car Traders Guarantee Fund as you've suffered a loss after purchasing the vehicle.

There is no fee to make a claim on this fund and the Motor Car Traders Committee will oversee the claim. The maximum that can be awarded by the Committee is $40,000.

If you still haven't been able to resolve the issue then you may have rights through the Victorian Civil and Administrative Tribunal.

Strict time limits apply, so you should obtain urgent legal advice specific to your circumstances.

This legal information is general in nature and should not be regarded as specific legal advice or relied upon. Persons requiring particular legal advice should consult a solicitor.

If you have a legal question you would like Alison and Jillian to answer, please email stories@news.com.au

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