New car buyers are warned of “lemons” in the market
Australians looking to take out a car loan to purchase a new car are being warned to check car warranties carefully after a survey by consumer advocacy group CHOICE found 66% of respondents discovered faults in their vehicles within five years of buying them.
CHOICE interviewed 1,505 Australians, and of the third with faulty car experiences, 73% were fully covered by a warranty, 11% were partly covered and 11% were not covered at all.
"New cars are expensive purchases, it's shocking to see that most consumers buying new cars should expect problems in the first five years of ownership," said CHOICE advisor Sarah Agar.
The report also found that beyond the direct cost of car repair, on average car owners with lemon cars spent $858 and 31 hours trying to resolve their problems.
This isn’t the first time the quality of new cars has been called into question in Australia. Late last year, the Queensland Government launched a Parliamentary enquiry into customer protections and remedies for new car buyers titled “‘Lemon’ Laws”.
Independent candidate for the seat of Ashgrove, Connie Cicchini recommended for the state adopt a “lemon vehicle register” similar to ones implemented in the US. This would mean consumers could make a more informed choice before settling on a new or used car by referring to the register.
Tips for Australians with a lemon car:
Refer to your car warranty and car insurance policy to see if your required repair is covered
Give your car dealer or manufacturer a call explaining the situation
If you’re still not having any luck, you might want to call the ACCC and seek advice on your legal rights and obligations
If you are required to pay for the mending of your car, you do have the option to take out a car repair loan. This can really help you out if getting the car fixed is urgent but you don’t have the funds to make it happen
Car loan comparisons on Mozo - rates updated daily
New Car Loan
- Beyond BankBeyond Bank
Low Rate Car Loan Special Offer
Clean Green Car Loan
- Heritage BankHeritage Bank
^See information about the Mozo Experts Choice Car Loans Awards
Mozo may receive advertising fees from the financial institutions, issuers of financial or credit products and third party advice providers that are shown on this page. These fees are based on a cost per click, cost per acquisition, or a fixed fee.