Consumer Action welcomes preliminary findings from ASIC’s review of motor car finance
Consumer Action Law Centre has welcomed the Australian Securities and Investment Commission’s (ASIC) release today of initial findings from their review into motor vehicle financing, noting that the review was prompted by an increase in complaints to the regulator about motor vehicle finance.
Consumer Action has a long history of assisting people sold ‘lemon’ or faulty cars, as well as arguing for reforms to stamp out harmful practices in the used car market. Over many years our lawyers have witnessed numerous problems with point-of-sale financing in car yards, with consumers pressured into applying for loans that they often cannot afford.
“Today’s preliminary findings shine a light on practices that have hurt people for years,” said Consumer Action Law Centre CEO, Stephanie Tonkin. “Car finance sold at the point of sale often traps consumers in high-cost loans for cars that break down soon after purchase. It’s a double hit—people are dealing with the stress of unaffordable debt as well as a dodgy lemon car.”
Consumer Action’s lawyers frequently assist consumers who have been signed up for loans they cannot afford to repay. Adding to the difficulty of making repayments, consumers are being charged high interest rates as well as being slugged with exorbitant broker and loan establishment fees and upsold on expensive, unnecessary extended warranties.
“ASIC’s review is an important step toward fixing these problems, however, we also need stronger action – banning point-of-sale car finance and introducing stronger protections for car purchases will ensure that Australians aren’t left paying for cars that don’t work,” Ms Tonkin said.
Consumer Action is currently undertaking a First Nations-led lemon car project, No More Gammin Cars. The project seeks to further explore the lemon cars issue through a First Nations lens by co-designing reform recommendations with First Nations community members with lived experience of being sold a faulty car. Through Consumer Action’s legal casework data, we’ve found First Nations people are disproportionally affected by the dodgy practice of being sold faulty cars including car finance (car loans and junk warranties). No More Gammin Cars aims to call out this systemically harmful practice and increase consumer protections for First Nations people.
Consumer Action looks forward to the release of the full ASIC report in 2026 and working with ASIC and policymakers to deliver reforms that better protect consumers when they purchase a used car.
ENDS
Media contact: Mark Pearce mark@consumeraction.org.au Tel: 0413 299 567
