Introducing Lemon Laws in Australia

In many countries, including the US and the EU, the government offers protection to consumers with Lemon Laws, laws that require car manufacturers and retailers to be held accountable for vehicles that are qualified as "lemons". Recently, there has been discussion about implementing such legislationin Australia.

What is a lemon law?

Lemon laws differ from country to country and state to state. In the US, buyers are generally protected if they purchase a defective vehicle that is not in working order for 30 days or more, or any vehicle that requires repair of the same defect on more than four occasions within the first year of purchase. Generally, manufacturers will be directed to replace the defective vehicle or refund the customer. The law also requires manufacturers to disclose that a car has been returned as a "lemon" before they sell the vehicle on as a used car.

In Australia, there is currently limited legal protection for consumers when it comes to purchasing a vehicle, especially when it comes to buying a used car. Potential buyers are limited in the type of information they can acquire and many of the state databases are not cross referenced, so a car that was registered as a hire car in Queensland can be re-registered in NSW without any way for a potential buyer to learn of the vehicle's previous history.

How else could consumers be protected?

Unlike the EU, there are no federal requirements for recording odometer readings on vehicles. While some states, such as NSW, require odometer readings to be taken at point of transfer and at all pink slip inspections (for vehicles more than five years old), this information is not made readily available to potential consumers who are looking for information about the car history. Meanwhile, having better access to information across states could greatly help individuals understand more about their potential used vehicle purchase.

In the meantime, what can you do to protect yourself?

In the absence of more broad ranging federal or state legislations, it's up to the consumer to get as much information as they can about their used car purchase. Fortunately, you can gain some good insight into a vehicle's history by doing a REVs check and car history check on the Vehicle Identification Number. (Look for it on the driver's side dashboard or along the door jamb of the car). These types of checks give you valuable information on a car's history, including whether it has any encumbrance (outstanding debt) and if the vehicle had ever been written off. It'll give you some important negotiating power when it comes to closing the deal.