News

Advocates across Australia are welcoming a new report today from the Australian Competition and Consumer Commission (ACCC) which points a lens at one of the nation’s most pervasive and troubling consumer issues – the sale of faulty second-hand cars.

The report Consumer issues in the sale of second-hand cars details the vast scale of the lemon car problem and reveals some of its devastating effects on families, individuals and the economy.

“People need cars to get to work, to school, to doctors and they are one of the biggest purchases a consumer makes – the impacts of a defective car reverberate throughout people’s lives,” said Stephanie Tonkin, CEO Consumer Action Law Centre.

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.

Harm is compounded where consumers have bought the car with credit – leaving people with a useless car and still repaying a loan. This report adds fuel to Consumer Action’s calls for reforms and underscores the need for urgent change.

“Lemon cars have profound impacts on our clients’ lives. It effects their family life, they lose access to employment and essential services, they are left in debt and with nowhere to turn for justice and support,” Ms Tonkin said.

“Those effects are compounded for people who already face challenges: those living in regional and rural communities, First Nations people, and people facing mental health challenges or experiencing family violence.

“It’s long past the time for the government to shift the burden away from consumers, and on to car dealers to do the right thing,” Ms Tonkin said.

Quotes attributable to:

Alan Gray, financial counsellor, and Managing Director of Bush Money Mob, Broome
“Years of work as a financial counsellor in Arnhem Land, the Kimberley, and the Pilbara have shown me that every family of remote Aboriginal people has at least one member whose financial life has been destroyed by the appalling opportunism of lemon car sales, lemon finance, and/or the debt collectors who feed on the first two. Civil penalties cannot come swiftly enough.”

Sarah Rodgers, Director, Hume Riverina Community Legal Service
“With vast distances to travel, limited—if any—public transport, and few repairers, buying a dodgy second-hand car can be devastating for regional people. We see the harm caused by the sale of faulty second-hand cars, from compounding financial hardship to risks to personal safety. Consumer protections and regulation of licensed car traders must be strengthened.”

Jillian Williams, Advocacy Manager, Indigenous Consumer Advocacy Network (ICAN)
“Cars are essential to living and participating in our communities. But with new vehicles increasingly out of reach for people on low incomes, access to safe, affordable, and durable second-hand cars is critical.
“ICAN has been raising the alarm for years about certain dealerships in this region pushing lemon cars with lemon loans onto the people who can least afford them. Enough is enough. We need urgent action to strengthen consumer protections and hold these dealers to account.”

Shelley Hartle, First Nations Policy and Project Manager, Consumer Action Law Centre
“We are disappointed at the failure to call out what is a glaring issue – motor car traders are in many cases capitalizing on loopholes in state-based regulatory and dispute resolution systems, as well as targeting consumers who may be experiencing vulnerability. Consumer advocates nationally, including those who are supporting First Nations consumers, have been calling out this targeted practice for decades and more attention needs to be focussed upstream to deter these behaviours in the first place.
“In Victoria our No More Gammin Cars project aims to illuminate these practices, specifically for First Nations consumers, and co-design the reforms required in order to reduce the harm caused to First Nations communities who are significantly overrepresented in our case work.”

Rowan Kelly, Acting Principal Solicitor, Consumer Credit Legal Service (WA)
“The devastation caused by purchasing a lemon car is profound – it can ruin finances, leave someone without a place to live and a means of escape, cost a job and take away the daily transport a family depends on. We have seen this pain, and more, in the people we help for way too long. Change is long overdue. We need stronger protections and businesses that sell lemon cars must be held to account. We welcome this report for shining a much-needed spotlight on this issue.”

Stephen Grace, Director of LawRight’s Homelessness Law
“For people experiencing homelessness, housing insecurity and financial hardship, a second-hand car is a lifeline to their community, it represents safety and is often necessary to access essential supports and services. The harm caused by a faulty car goes beyond just the financial cost: it can destabilise a person’s life, further exasperating existing hardship. LawRight’s Homelessness Law fully supports the call for improved remedies for consumers”.

Mark Holden, Acting Director Mob Strong Debt Help
“Lemon cars are incredibly expensive. Because of the limited choice in rural and remote areas, we have seen mob pay $8,000 for a car when the market value is only $2,500.  If fees and junk warranties are added on, that’s another $3,000. If you add interest on top of that, people end up owing $17,000 – even if the car stopped working not long after they bought it.”
‘Other times, we talk to mob who have been pushed into accessing expensive credit to buy the car and end up with an unaffordable loan that they repay”.

Melissa Hardham, CEO Westjustice
“Too many people in Melbourne’s West are being exploited for a quick buck. It is time for a fair deal. Westjustice looks forward to working with the government on penalties for breaching consumer guarantees, so people are protected and the market is fair.”

ENDS

Media contact:  Mark Pearce  mark@consumeraction.org.au  Tel: 0413 299 567