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Is it Time for Extensive ‘Lemon’ Laws?

As recently as last month, consumer advocates and legal groups were once again campaigning for the introduction of extensive lemon laws. Australian consumer laws have long been considered inadequate for motorists who purchase new vehicles, only to see their purchase turn out to be a dud – in fact, a ‘lemon’.

This time, the lobbying extended further, with several groups joining together to put pressure on the government to make the necessary changes. With bodies such as the Consumer Credit Legal Service and Legal Aid NSW behind the push, are motorists overdue a change in legislation?

When we consider consumers’ entitlements to said respite, it’s worth noting that Australia trails its international peers by some margin. Major countries such as the UK, the US and Singapore are well ahead in this area. Consumers are protected by laws that dictate the number of permissible faults in a new vehicle, as well as the length of time such vehicles are allowed off the road due to any given major fault or combination of faults. Should a vehicle encounter more issues, or remain off the road longer than guidelines permit, the owner can notify an auto-maker about the fault(s) and request its repair, or an appropriate refund.



In Australia however, there is a shortfall in coverage regarding major vehicle failures, with customers expected to work with the retailer to resolve the problem – often leading to an escalating level of frustration when the problem is often unable to be identified. Among other concerns noted by lobbying groups and proponents of legislative changes, motorists are often burdened with repair costs that are disproportional compared to the price paid for the vehicle. In this respect, the sale of faulty second-hand vehicles attracts more attention, as consumers have even less legal protection.

Currently, one of the fundamental issues to navigate is a system where the customer is treated in a manner befitting of their fault being assumed. Understandably, with some customers looking to take advantage of certain scenarios, it is unfortunate things have unfolded in this manner. Motorists are responsible for demonstrating the vehicle’s defects. In practice, this works against the theory of affording consumers protection for products which they do not have an expert knowledge about

Predictably, motoring bodies are opposed to any legislative changes, suggesting there is no need for change. They argue motorists have sufficient access to recourse as it is, and assessments would be significantly open to interpretation. While there might be merit in the second statement, specialist panels with expert assessment are being touted as an appropriate option, while delicate wording would ease the degree of interpretation required. In the case of ambiguous interpretations, there is hardly any evidence to suggest that the current scope provides a better approach to deal with such concerns – particularly when one considers the use of vague references regarding rejection periods and a high threshold for time off the road.


The government would also be wise to separate and distinguish motor vehicles as requiring a separate form of consumer protection from standard items. After all, with vehicles likely to be the second largest purchase in one’s lifetime, the acquisition should not be understated with respect to its importance. And it goes without saying, the impediment of a non-functional vehicle is likely to have other ramifications on one’s personal and professional life.

With local vehicles surpassing previous all-time figures for recalls (albeit, with only a portion related to faults), and reliability data already withheld from consumers, it’s clear that manufacturers and motoring bodies also have a vested interest in retaining ambiguous legislation to uphold their reputation. Moreover, it also serves well to inhibit a customer’s avenue to recourse.

The key step is transparency. Quality control will only improve through continual feedback and learning. And whilst ‘naming and shaming’ is certainly not the intended course of action, a renewed focus on the number of faults experienced by certain manufacturers should be means to promote an improvement in build quality, which should then make interpretation of defects a whole lot easier.