ACCC calls for a better deal for car buyers and repairers

Australian households spend 5 per cent of their annual income on their cars. That figure includes buying and maintenance, making a car the second most expensive purchase after a house.

Despite the cost, and the fact that many people need a car to work, the consumer legal protections for new car buyers can be difficult to enforce, and for consumers to understand, finds a report from the Australian Competition and Consumer Commission (ACCC).

The consumer watchdog’s draft report into the new car retailing industry calls for regulation to ensure car manufacturers provide technical information to independent repairers.

The ACC says consumers are not receiving accurate information about the emissions performance of new cars, since manufacturers do this in laboratory rather than “real world” conditions. Australian testing indicates real world fuel consumption is on average 25 per cent higher than in laboratory tests.

Australia’s 1500 new car dealers operate from 3500 retail outlets, and in 2016 they sold 1.1 million new cars, earning revenue of $64 billion.

The servicing market includes 40,000 manufacturer-authorised and independent car repairers, earning revenues in the order of $18 billion.

The country’s 11,000 crash repair businesses earn $6.8 billion in revenue.

Manufacturers and dealers usually earn more in aftermarket services than from selling new cars.

The ACCC says that although the law provides protections, “There are a number of systemic problems in the new car industry preventing consumers from obtaining the remedies to which they are entitled when their car experiences a problem”.

Independent repairers add competitive discipine to the market and their service is valuable and benefits consumers, yet the regulaor it notes the repairers rely on car manufacturers to share information and data.

The draft report calls for clearer information on warranties and a mandatory scheme for manufacturers to share data with independent repairers. The repairers should have access to manufacturer’s parts on reasonable terms.

The final report will be released before the end of 2017.

August 2017