Geoff Gwilym

PROPOSED lemon laws for Queensland have soured relationships with other states, prompting Victoria’s peak automotive body to claim that state rules would adversely affect dealers and consumers.

The Queensland attorney-general last month proposed a bill to protect new- and used-car buyers, lifting the price net of affected cars from $25,000 to $100,000 and saying consumers should be able to get a refund or replacement vehicle.

It is a significant boost to the consumer protection that exists under current Queensland law and will be one of the most stringent in Australia when the bill is in place, which is expected to be early next year.

Consumers – including lemon-law advocate Ashton Wood, the man who captured the attention of the Queensland government when he publicly demolished his troublesome Jeep Cherokee in 2014 – are delighted with the state’s consumer law changes. Others are not.

Some parties have queried why Queensland needs the bill when the federal Australian Consumer Law (ACL) is already being enforced under national legislation. Others see the new bill as a backstop to the Australian Consumer Law.

GoAutoNews Premium contacted the Australian Competition and Consumer Commission (ACCC), which has already made substantial changes to the ACL affecting motor vehicles, has already fined Ford and is in court with Volkswagen and Audi.

The ACCC said, in essence, state consumer protection law is an avenue for consumers to seek redress, while the ACCC regulates the bigger picture, ie compliance of the ACL by dealers and OEMs.

The Victorian Automobile Chamber of Commerce (VACC) has long had an objection to lemon laws, believing that it can unfairly prejudice a dealer who can get caught between the customer and the OEM.

The VACC has recently been vocal in its objection, fearing the Victorian state government may be encouraged to introduce its own lemon laws.

VACC CEO Geoff Gwilym wrote to the state trade and investment minister, Philip Dalidakis, stating that the car retailing sector would be adversely impacted by a lemon law.

“The overwhelming feedback received by VACC from its small car dealer membership base is that a lemon law would amount to an unsustainable financial impost for their business and they would most likely exit the industry,” Mr Gwilym said in his letter.

“According to VACC automotive industry modelling, the net effect of the introduction of a so-called ‘lemon law’ – and we don’t like that term, by the way – would see the closure of car retailing businesses and major job losses in Victoria.”

“Proportionately,” he said, “the largest impact would be on small businesses which represent 92 per cent of business within the sector.

“Furthermore, these losses would be in addition to the business and employment losses already sustained by the automotive industry through the closure of local car manufacturing.”

Asked about the potential for business closures and retrenchments, Ashton Wood said that number of cars with problems indicated that there was something wrong with the quality of vehicles being sold to Australians.

“Is it right that the consumer, and not the dealer or manufacturer, pays for the repair of new vehicles?

Destroy my Jeep

“If a washing machine or mobile phone fails, you get a repair under warranty with no questions asked. Why should consumers have fight so hard to get a reliable vehicle?”

Mr Wood said the Queensland lemon law would give consumers the confidence to purchase new vehicles, knowing that there’s a safety net in place in the event that something goes wrong.

“That should – assuming no other crisis such as a repeat of the GFC – actually increase the sales of new vehicles in Australia. No dealer or manufacturer could complain about that.”

Mr Wood these days acts on behalf of frustrated new-car owners with warranty problems and has achieved repair approvals, replacement vehicles and out-of-court settlements for over 800 vehicle owners by dealing directly with the manufacturers.

“QCAT was useless”, said Mr Wood of the Queensland Civil and Administrative Tribunal.

“The current limit of $25,000 means that most consumers cannot get closure and have to turn to the media to highlight their issues. This is not good for the vehicle manufacturer, dealer, or for the customer, as no-one wins,” he said.

“Dealers also get frustrated when it’s left to them to resolve manufacturing defects and issues, so it becomes a melting pot of emotions and frustration from all sides.”

The Queensland government statement on its new bill said “consumers should have the right to demand a refund or replacement”.

Attorney-general Yvette D’Ath said: “We know the financial and emotional pain that is caused when things continually go wrong with a newly purchased vehicle.

“It shouldn’t happen, but if it does the Palaszczuk government wants to make sure anyone who buys a new or old vehicle gets a fair go.

“That is why this bill increases QCAT’s current jurisdictional limit of $25,000 to $100,000 for matters involving motor vehicles with either a major fault or multiple minor faults.

“This legislation means if a consumer cannot obtain a suitable remedy in negotiation with the dealer or manufacturer under Australian Consumer Law, they have the option of seeking a remedy through QCAT or the courts.”

Mr Wood said he has helped protect the brand of a number of manufacturers in Australia and also helped manufacturers and dealers avoid expensive legal fees associated with the preparation and attendance of court hearings with disgruntled customers, by acting as a mediator between the parties.

“Sometimes the customer/dealer relationship is so damaged that the customer just won’t believe another word the dealer says,” Mr Wood told GoAutoNews Premium.

“So I get involved to hear both sides of the story and help the customer and manufacturer come to a reasonable agreement.

“With this new bill, the consumer and dealer will have an avenue for resolution – up to $100,000 – at the tribunal if all other mediation fails.”

The Federal Chamber of Automotive Industries (FCAI) chief executive Tony Weber said he believed that all consumers should be looked after “but the last thing we want is inconsistent state and territory laws”.

He said he believed there was a “very strong regime” in place with the new ACL.

By Neil Dowling