News, Regulations ,

NEW and used vehicles can be purchased online in NSW after key industry bodies overturned government plans to prohibit such sales.

The Motor Trades Association of NSW brought the issue to a head after the NSW government proposed to exempt used cars from being sold online in a move classed by the industry as “regressive”.

Now, the NSW Department of Customer Service has advised the MTA and the Australian Automotive Dealers Association (AADA) that amendments will be made to the proposal to allow for the online purchase of new and used cars.

In its response to the industry bodies, the NSW department wrote: “After recent consultation with industry stakeholders on the Motor Dealers and Repairers Amendment (Statutory Review) Bill 2022 and our review of the Have Your Say survey submissions, the decision has been made to extend the amendments allowing for the entire purchase process of a vehicle to take place online to both new and used cars.

“The decision to include used cars in the proposed amendments has been made to allow the industry to continue to grow and innovate, while still providing adequate consumer protections.”

The AADA, in a brief to its members prior to the amendment, said: “In our view this change would have resulted in considerable consumer detriment and harm to all licensed dealers in NSW.”

The association said it lodged a submission last month opposing the government’s proposal and called for “detailed evidence why such a drastic change was required”.

The AADA also met with NSW minister for small business, Eleni Petinos, to discuss the proposal within the Motor Dealers and Repairers (Statutory Review) Bill 2022.

In a statement, the AADA said: “We commend the minister and the government on acting so quickly and decisively to ensure licensed traders can continue to sell in ways that offer convenience to their customers, while still placing a priority on protecting consumer interests.

“The review of the Act also includes sections designed to modernise the legislation in several key areas, which we fully support, though we have concerns about proposed changes to the way defective vehicles are handled and the proposed requirement for them to be returned to the selling dealer for rectification, which may not be practical in some situations. We will continue to work with the department on this issue.”

The AADA said NSW has almost 1000 new-vehicle outlets and employs more than 17,000 people.

AADA CEO Jams Voortman told GoAutoNews Premium that NSW dealers generate $4.12 billion in economic activity and pay more than $800 million in taxes for both state and federal governments.

“Franchised new car dealers in NSW are staunchly opposed to some of the amendments contained in this bill, particularly those pertaining to online sales,” he said.

“While we support attempts to ‘future-proof’ the industry and respond to new business models and technologies, the effective ban on the sale of used cars online is a move that fails to meet the needs of an ever changing market and will halt progress towards consumer driven arrangements.

“This will severely disadvantage both NSW consumers and NSW dealers, making the state one of the most regressive automotive retail jurisdictions in the world.

“The online used car sales ban will put NSW dealers at a significant disadvantage to dealers in other Australian states and territories.

“It will essentially outlaw practices many franchised new car dealers in the state have been undertaking for some time, seriously disrupting their business, and constraining their ability to service their customers.

“Evidence has not been presented to show that consumers purchasing cars online from a licensed dealer are at greater risk.”

Mr Voortman said the government should abandon the online used car sales ban and instead ensure that the other protections around disclosure, opportunities for inspection and maximum deposits apply equally to both new and used cars sold online.

“We support the government’s attempt to better align dealer guarantees with the Australian Consumer Law, however, we believe the requirement for online motor dealers to collect defective vehicles is unnecessary and in certain circumstances completely unreasonable.

“This change will create further distance between NSW consumer law and the ACL.”

By Neil Dowling