Sparesbox Blog

How New Car Dealers are Shooting Down Repair Claims

By Brad Nash

Mon Mar 14 2016

It’s safe to say that car dealerships never enjoyed a reputation as the beacons of society, but new reports coming from the Sydney Morning Herald and CHOICE this morning are taking things to new depths.

In the wake of this, it’s important that we remind you to be truly careful in not only remembering your rights as a consumer, but also recognising the limitations of your warranty.

Consumers, said CHOICE, are being held back more than ever when it comes to dealers rectifying issues with their new car, despite a worrying trend regarding the amount of new cars going wrong in the first 5 years of use.

Put simply, if you’ve just bought a new car and something has gone wrong with it, there’s a chance you may have a hard time getting it fixed by the people who sold it to you.


Let’s Take a Look at the Numbers

Customers are spending insane money and time fixing their new car. Image: Sydney Morning Herald
Customers are spending insane money and time fixing their new car. Image: Sydney Morning Herald


The stats that back this up are pretty staggering. No car manufacturer in Australia had a problem rate less than 44%, meaning that if you’ve bought a new car in the last 5 years, the chances of it developing an issue in that period almost rest on the flip of a coin. If you’ve bought a Holden, that goes up to 68%.

Despite the unexpectedly high amount of cars that do develop major issues (for instance, a major component failure or breakdown), 15% of people experiencing these problems were completely unable to resolve the problem. It didn’t matter if they had a warranty, insurance, or consumer laws behind them.

Even from the people that were able to get their issue resolved, 16% of them had to sign a confidentiality agreement that forbade them from telling anyone about the issue they had. Choice also reported that dealers were deliberately refusing to acknowledge known issues before a customer’s warranty period expired. Because who actually needs consumer rights, yeah?

As such, it’s worth remembering that you don’t necessarily go to a dealership to keep your warranty in the case of a problem. At the same time, keep in mind that not every issue your car throws up (think your brake pads or anything else that is susceptible to the effects of aggressive driving) will be covered in your vehicle’s warranty.


How You Can Keep Your Power

It's all in the action you take! Image: Sydney Morning Herald
It’s all in the action you take! Image: Sydney Morning Herald


Unfortunately, few people would know this driving their car out of the dealership, leaving them more vulnerable than ever. Hopefully, this could soon change. New groups are gaining traction in proposing laws which hands rights back to the consumers in the case that they do unknowingly purchase a “Lemon” (a vehicle that’s been repaired 3 times by the dealer/importer and still has an issue).

If the laws are passed in the review of Australian Consumer Law that’s due to take place this year, a car dealership will only have a certain number of times they’re allowed to attempt to repair a car before a customer is entitled to either a refund or a replacement.

The ACCC is also looking to make some large changes, after the appalling service from Fiat-Chrysler dealers led to a widespread investigation into their dealer network. Now, they’re hoping to bring the hammer down on those that are refusing to honour legitimate warranty claims. The ACCC has also developed a handy tool on pretty much everything to do with buying a car, which you can see here.

All in all, there is reason to be hopeful, but in the meantime you have a lot more power as a driver AND as a consumer than you thought, and it’s important to remember that.

Featured Image: New York Times