Why we need car lemon laws in Australia
Bought a new car that’s a dud? You may have a lemon, but there are currently no Australian car lemon laws to help…
Which manufacturers are the worst?
What are lemon laws?
Why do we need lemon laws?
the other view
What exactly is a lemon?
So what laws do we have now?
A major failure to comply with the consumer guarantees is when:
>> a reasonable consumer would not have bought the motor vehicle if they had known about the full
extent of the problem. For example, no reasonable consumer would buy a new car with so many
recurring faults that the car has spent more time off the road than on it because several mechanics have
been unable to solve the problem.
What happens now?
Questions we need to resolve for Australian lemon laws
It’s not enough to just call for lemon laws. There are numerous difficult questions to resolve, such as:
- Exactly what are the criteria for lemons – how many days unavailable, over what period of time?
- How long after sale should lemon laws hold? The USA varies one from year to the total of the warranty period.
- What’s a “new” car – does a demonstrator count? Lemon laws don’t apply to secondhand cars. This could actually drive new-car sales, something the automotive industry doesn’t seem to have considered.
- What does “unavailable” mean, and does driving a car with an existing problem count in any way?
- What’s the definition of ‘fixed’ – for example no re-occurrence of the problem after X many days?
- What’s a lemon-worthy fault? What level of fault should be accepted by the customer as normal?
- How do we make a distinction between a normal service and unscheduled work leading to unavailability?
- Who pays for a buy back, dealer or manufacturer?
- How can owners be stopped from bringing cars back for minor or insignificant problems, or even creating problems in the hope of getting their car declared a lemon?
- Should there be a database of lemons, performance reports by manufacturer?
- Is a ‘lemon ombudsman’ needed or would the normal courts suffice?
Fortunately, lemon laws have operated well in the USA and other countries for decades, since 1975 in the case of the USA and their car market seems to be quite healthy. It’s also fair to assume that over the past 40-plus years the laws are well tested. So we can learn from their experience, and anyway just because there’s a difficult question shouldn’t stop us forging ahead with improvements.
There is some hope. Senator Ricky Muir told us that “This year we will see a review into the 2011 Australian Consumer Laws conducted by Consumer Affairs Australia and New Zealand (CAANZ). The final report is said to be provided early in 2017. On the Australian Consumer Laws website it states that “CAANZ will consult widely with consumer representatives, businesses and the wider public, with public consultation on the review to formally begin in 2016.”
Oh, and how about we go for an Australian first and do this federally instead of each state coming up with nearly the same solution to exactly the same problem? Standardisation of automotive rules and regulations across states, any pollies want to put their hand up for getting the red-tape slasher out and freeing up our local industry to spend more time building and less time frigging around with paperwork? Again it’s Ricky Muir who is pushing in the right direction, and he supplied us this link to the Future of Australia’s Automotive Industry (read section 5.20).
Examples of USA LEMON LAWS
Much of the hard work has been done for us. Here’s some examples from the USA:
What’s a lemon?
The law defines a “lemon” as a vehicle either purchased or leased in Maine, which has a defect that substantially impairs the use, safety or value of the vehicle, and which has not been repaired after a reasonable number of attempts .1 If your vehicle is found to be a lemon then the manufacturer must give you a replacement vehicle or refund your money.
A new vehicle that is no more than a year old and still under warranty is classified as a “lemon” if:
- It has a serious defect the manufacturer or dealer(s) didn’t fix in four tries, or
- It has one or more defects that prevent you from using it for 30 days or more (the 30 days need not be consecutive).
What’s a defect?
A defect (or a nonconformity) covered by the Lemon Law must seriously affect the use, value or safety of your vehicle and must be covered by the warranty. Conditions that result from abuse, neglect or unauthorized modification or alteration of the motor vehicle by a consumer do not qualify as defects the manufacturer must repair under the law.
An irritating rattle may not be “serious” enough to make your car eligible for a Lemon Law claim. Your vehicle stalling or not running might be.
Example given in the Maine guide
The example below shows that a car is not a lemon if there are minor faults, even if the faults are clearly present and acknowledged by the dealer and manufacturer:
How does the lemon law process work?
The law provides that a vehicle is considered “out of service,” if a consumer is unable to use the vehicle for its intended purpose because of either of the following:
- The vehicle is in the possession of the manufacturer, motor vehicle lessor, or an authorized dealer for repair of a defect.
- The vehicle is in the possession of the consumer and the vehicle has a nonconformity that: A) substantially affects the use or safety of the vehicle and B) the manufacturer or dealer has attempted to repair on at least two occasions.
- The manufacturer or its agents have made two or more attempts to repair a warranty problem that results in a condition that is likely to cause death or serious bodilyinjury if the vehicle is driven;
- The manufacturer or its agents have made four or more attempts to repair the same warranty problem; or
- The vehicle has been out of service for more than 30 days (not necessarily all at the same time) while being repaired for any number of warranty problems; or
- The problems are covered by the warranty, substantially reduce the vehicle’s use, value, or safety to the consumer and are not caused by abuse of the vehicle;
- If required by the warranty materials or by the owner’s manual, the consumer has to directly notify the manufacturer about the problem(s), preferably in writing. The notice must be sent to the address shown in the warranty or owner’s manual (for bullets 1 and 2).
What To Do now if your car has problems
- Document, document, document. Keep a record, photos and video of everything. When you bought the car, who said what, when exactly it was out of service. Get everything in writing. This advice applies even in the cases where lemon laws exist, because you still will need documentation to prove the car is a lemon. Include hardship and expenses such as taxi fares, time off work.
- Band together. There’s power in numbers with others facing similar issues. Refer to the links below.
- Be firm but fair. Rants and empty threats don’t work.
- Be reasonable. Still, you probably aren’t reading this if you’re an unreasonable sort of person.
- Know your rights. Australia may not have car-specific lemon laws, but there are existing consumer protection laws that help.
- Cooperate with the dealer to help fix the problem or give very clear reasons (in writing) why you won’t or can’t, and offer alternatives if possible.
- Lemon laws lobby group (web) http://lemonlaws4aus.wix.com/lemonlaws4aus
- Lemon laws lobby group (Facebook) https://www.facebook.com/Lemon-Laws-4-Aus/
- Our interview with Senator Ricky Muir that touches on lemon laws
- Descriptions of the lemon laws in each of the US states http://www.freeadvice.com/resources/state_lemon_law.htm
- California’s “Lemon Aid for Consumers” information sheet (PDF).