An independent review commissioned by the Australian Automotive Dealer Association (AADA) has found Australia’s consumer law framework is failing both car buyers and franchised new vehicle dealers, resulting in lengthy delays, higher costs and poorer outcomes for consumers.
Prepared by Emeritus Professor Jenny Buchan, the review concludes that shortcomings in the Australian Consumer Law (ACL) are contributing to significant delays in resolving vehicle fault claims.
Among its findings, the report says consumers can face waits of six to eight weeks for defect claims to be processed, while disputes referred to state and territory tribunals can take between 12 and 18 months to be heard. It also raises concerns about inconsistent engagement from some manufacturers, including the denial of reimbursement claims and limited participation in dispute resolution.
The review builds on a 2017 Australian Competition and Consumer Commission (ACCC) market study, which recommended manufacturers improve the way they handled consumer guarantee claims and reviewed their commercial arrangements with dealers.
According to the AADA, the latest review suggests those issues have worsened at a time when Australia’s automotive market is becoming increasingly complex.
Industry forecasts indicate the number of vehicle brands operating in Australia could reach 75 within five years, representing a 92% increase over the past decade.
AADA chief executive James Voortman says the review demonstrates the need for reform.
“This review clearly shows that Australia’s consumer laws are not delivering the outcomes that consumers and new car dealers deserve,” he says.
“The evidence presented in this report indicates that some international manufacturers are either failing to engage with, or are not adequately responding to, Australia’s consumer law processes.”
Voortman says unclear legislative definitions and inconsistent processes are increasing costs while leaving motorists without their vehicles for extended periods.
“Ambiguous definitions and unclear procedures are creating unnecessary costs for businesses, placing additional pressure on tribunals and, most importantly, leaving motorists without access to their vehicle for extended periods.”
The AADA is calling on the Federal Government to require earlier and mandatory manufacturer participation in vehicle-related consumer disputes, review key legislative definitions within the ACL, and undertake a broader assessment of how consumer law operates in the new vehicle market.
“For most Australians, purchasing a car is the second-largest financial commitment they will make. Consumers have every right to expect a fair, timely and efficient process when faults arise,” Voortman says.
“Multinational manufacturers must take greater responsibility for the products they import in Australia and be active participants in resolving consumer disputes.”
Key findings
- Consumers face delays of six to eight weeks in processing vehicle defect claims.
- Tribunal hearings can take 12 to 18 months to resolve disputes.
- Manufacturer engagement in consumer law processes is inconsistent.
- Unclear legislative definitions are creating inefficiencies and increasing costs.
- Growing market complexity is placing additional pressure on the consumer law framework as the number of vehicle brands continues to increase.
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