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Dodgy new car retailers who mislead consumers about guarantees, warranties and fuel consumption promises have been put on notice by Australia's competition watchdog.
In a draft report, Australian Competition and Consumer Commission (ACCC) found many manufacturers have failed to ensure that basic consumer guarantee rights are factored into their complaints handling systems and that some new buyers are losing out to shady practices.
The ACCC said complaints about new car manufacturers and retailers have risen to more than 10,000 over the past two years, highlighting widespread consumer issues in the industry.
ACCC chairman Rod Sims told the ABC's AM program that manufacturers and dealers who mislead consumers about their rights for repairs, refunds and replacements are about to face more heat.
"We think consumers are getting a pretty bad deal with new cars, they're not getting their consumer guarantees which means they don't get all their rights in terms of replacements or refunds ," Mr Sims said.
"There's a whole lot of historical behaviour that needs to change considerably. I think we've got to drag the new car industry into the current century.
"They've got to understand that consumers do have guarantee rights."
In one case cited in the report, a female buyer with transmission problems was told by a Ford dealer she should "drive more like a man" after her attempts to have a known problem fixed.
"That's extraordinary and it reflects a range of social attitudes that's for sure. To say that to someone shows a fair bit of disdain for the customer," Mr Sims said.
So far this year the ACCC has taken action against a number of manufacturers including Ford, Holden, Volkswagen and Audi.
Consumer law changes proposed to clarify rights
The Australian Consumer Law (ACL) is national fair trading legislation which provides protections in the event of a problem with a good or service including new cars.
According to the ACCC, the ACL goes above and beyond many manufacturers' warranties to guarantee consumer rights if a new car is defective or does not perform as promised.
However, in a bid to clarify the law, the ACCC is recommending that if a good fails to meet expectations within a short time the consumer is entitled to a refund or replacement without have to prover there has been a "major failure".
Mr Sims said he supported recommendations to toughen the consumer law to address uncertainties and potential breaches about consumer rights when dealing with the new car industry.
"These proposed changes would entitle consumers to get a refund or a replacement within a set period of time if a new car doesn't work," Mr Sims said.
"They would also clarify that multiple non-major failures can amount to a major failure."
The report also found a "dominant culture of repair" in car manufacturing systems and policies for dealing with car defects and outright failures.
In addition, it pointed to the widespread use of non-disclosure agreements by car manufacturers designed to silence consumers who have complaints resolved.
Demand for real world fuel consumption figures
Consumers are also not receiving accurate information about fuel consumption or emissions performance from new cars, the ACCC has found.
"Fuel consumption and emissions are often major purchasing factors for buyers when choosing their car," Mr Sims said.
"We're concerned that what new buyers are told their car will achieve is very different from practice."
Mr Sims warned car manufacturers and dealers to ensure that representations to consumers about consumption and emissions are accurate and has recommend "realistic" laboratory tests so people know what they are buying.
The ACCC has identified problems with the timeliness of technical information being passed onto independent repairers from new car manufacturers and retailers.
Car manufacturers provided a voluntary commitment in 2014 to provide independent repairers with the same information given to authorised dealers.
"This lack of competition hurts new car buyers who have fewer options to get the best deal for repairs and servicing," Mr Sims said.
The ACCC is seeking comments on the draft report by next month and expects to have final recommendations by the end of the year.
Follow Peter Ryan on Twitter @peter_f_ryan and on his Main Street blog.
Topics: automotive, consumer-protection, regulation, australia
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