Motor Vehicle Dealers and the Act

Repair, Replace or Refund
If you sell a vehicle that is not of good quality or is faulty, the Consumer Guarantees Act (CGA) gives the customer the right to a repair, replacement or refund. The Act says which of these choices the customer has in different situations.

Motor Vehicle Sales Act
The Motor Vehicle Sales Act came into effect on 15 December 2003.  From this date, used motor vehicles will no longer carry Motor Vehicle Dealers Act ABCD warranties.  In its place, the Consumer Guarantees Act provides consumers with rights and remedies for defective used or new motor vehicles.   This section has been updated to take account of any changes made by the Motor Vehicle Sales Act. The information on the Motor Vehicle Dealers Act will remain, as it may still apply to vehicles sold before 15 December 2003.

What the Act Says about Vehicles
The Consumer Guarantees Act (CGA) sets out:

  • Guarantees that goods and services must comply with when sold by someone in trade.
  • Remedies that either the seller, manufacturer, importer or service provider is required to provide if a guarantee is not complied with.

Application of the CGA
The CGA covers all motor vehicles sold by a person in trade that are of a kind ordinarily acquired for domestic, personal or household use. The definition of a person in trade includes both registered and non-registered motor vehicle dealers and any other person in the business of supplying goods.

Sales covered by the CGA include:

  • New and used motor vehicles.
  • Mtor vehicles of a kind ordinarily acquired for personal use – eg, sedans, station wagons, 4-wheel drives or SUVs, motorcycles, camper vans.
  • Vehicles that can be ordinarily acquired for both personal and business use – eg, utes or small vans.

Exceptions to the Act
The CGA does not apply to:

  • Motor vehicles of a kind ordinarily acquired for a commercial use – eg, trucks, buses.
  • Motor vehicles sold at auction.
  • Motor vehicles sold by a competitive tender process.
  • Motor vehicles sold for re-sale or re-supply – eg, importer selling to another motor vehicle trader.
  • Motor vehicles sold privately.

Contracting out of the CGA
If you sell a vehicle of a kind ordinarily acquired for domestic or personal purposes to a person who intends to use it in a business, you can choose to contract out of the CGA. You must give the buyer written notice that you are contracting out of the CGA at the time of sale.

You can do this by providing a written agreement that says that the vehicle will not be subject to the CGA. If you attempt to contract out of the CGA under any other circumstances, you will be breaching the Fair Trading Act because it prohibits people in trade misleading consumers about their rights. The penalties for breaching the Fair Trading Act are substantial – fines of up to $60,000 for an individual and $200,000 for a company.