Major changes to laws covering the sale and repair of motor vehicles in WA will go before Parliament which, if passed, will introduce a cooling off period in certain circumstances, remove special warranties and reduce fees for consumers.
For vehicle sales, the proposed changes will involve:
- A three day cooling off period for motor vehicle sales that are linked to dealer finance, either offered in house or as a referral to a credit provider (a flat $100 fee will apply);
- A maximum five per cent charge for the termination of a sales contract, replacing the current maximum 15 per cent ‘pre-estimated liquidated damages’ provisions;
- Removal of special warranty provisions for used vehicle sales, relying instead on the consumer guarantees under the Australian Consumer Law to protect buyers;
- Salespeople no longer having to be licensed but licensed dealers will have the obligation of ensuring their sales staff have the appropriate experience, skills and training; and
- Improved disclosure requirements for dealers relating to whether a used vehicle is a repairable write-off or has had its engine replaced.
The cooling off period for sales linked to finance gives consumers the opportunity to review their decision to purchase under those circumstances and brings WA in line with most other States.
Having a set, low contract termination fee prevents the current situation where consumers in many cases face losing thousands of dollars if they want to pull out of the deal. Likewise the amount better reflects the actual losses incurred by the dealership.
Separate warranties for used vehicle sales are no longer required with the consumer guarantees within the Australian Consumer Law providing adequate protection for buyers, so vehicles will be treated like any other consumer product.
For vehicle repairs, the proposed changes will involve the certification for individual repairers to be renewed every three years, replacing the current one time only applications, among other changes.
We believe that the changes to the laws strike a fair balance that provide appropriate protections for consumers while maintaining the commercial viability of businesses operating within the motor vehicle industry in WA. They are also designed to reduce red tape and to modernise the laws which protect what is a major purchase for most consumers.
The review’s final report in the form of a Decision Regulatory Impact Statement (DRIS) can be viewed on the Consumer Protection website.