Hundreds of thousands of lemon cars sold ‘down the lane’, why we need an ombudsman
Data from Australian Competition and Consumer Commission (ACCC) actions, recalls and other court actions has revealed that there are hundreds of thousands of lemons on Australia’s roads, many of which are run ‘down the lane’ to second-hand dealerships for unsuspecting consumers to purchase.
Consumer Action lawyers are regularly called about used cars that break down a week, or even a day after purchase – sometimes on the way home from the dealership.
Each of these vehicles represents a person, often a family heavily impacted by a lemon car: a mother who can’t get to work, a father who can’t take the children to day care, someone who has missed a hospital appointment, a family violence victim unable to safely escape their perpetrator.
Consumer Action assisted over 100 Victorians with their lemon car issues in FY2021-22, helping them to attempt to resolve the issue directly with the car dealer, if possible, and guiding them through the Victorian Civil and Administrative Tribunal’s costly and labyrnthine processes which can take up to two years.
“It’s clear that our current tribunal system cannot deal with lemon cars because the system is broken,” said Tania Clarke, Consumer Action Director of Policy and Campaigns.
“We need a new and more effective dispute resolution solution, a motor vehicle ombudsman, that incentivises better conduct in line with the Australian Consumer Law and that can prevent poor conduct before it happens through a transparent systemic issue focus,” she said.
“We have heard from people who have been plunged deep into debt after borrowing to pay for a lemon and then losing work because they couldn’t travel.
“This data underscores the need for an ombudsman who can solve lemon car issues quickly and with less costs. We have presented this idea to the Victorian Government and opposition parties as our platform for the upcoming State Election in November,” said Ms Clarke.
“We hope they listen because this problem has been around for too long – decades in fact.”
ACCC enforcement actions, recall data and other court actions against manufacturers have identified a minimum of 472,968 cars were sold to Australian consumers with defects during the period.
Broad ranging issues were identified with Volkswagen, Holden, Hyundai, Toyota, Ford and Mazda
- Hyundai (2021) – 93,000 cars in Australia purchased between 2014-2020 at risk of engine compartment fire even when off, see also recall data.
- Toyota (2020) – Prado, Fortuner and HiLux affected by mechanical issues, including resulting in vehicles going into ‘limp mode’. A subsequent class action, referencing 264,710 cars, has been initiated
- Mazda (2019) – 9 consumers, seven vehicles, 49 false or misleading comments made by Mazda to consumers regarding access to refunds
- Volkswagen (2018) – 57,082 cars exceeded NOx emissions standards in Australia. See also here.
- Ford (2017) – at least 36,000 cars in Australia between 2011-2016, powershift transmission issue – $10 million penalty in Fed Court
- Holden (2017) – 22,706 Holden Captiva SUVs at risk of a fuel leak with a 2.0 diesel engine between 2007-2008 .ENDS
Media Contact: Eleanor Pallett
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