Consumer Action Law Centre (CALC) is one of four consumer groups pushing the Victorian Government to introduce appropriate measures including specialist services and independent reporting to resolve disputes arising from defective 'lemon' vehicle purchases.

The rise of 'lemon' vehicles across the nation has been fuelled by a global supply shortage of new cars, microchips and parts resulting in consumers paying considerable overs for used cars purchased from both dealerships and private sellers.

Australian Consumer Law (ACL) guarantees people have a right to a durable, safe, and fit-for-purpose purchase that is free from major and minor failures, yet in Victoria more than 30% of calls made to CALC's legal helpline are related to consumer guarantees for defective cars. 

Research conducted by Allianz Australia across 1,000 respondents through September and October 2021 found Australians are turning to second-hand cars more than ever before to try to save mone.

However as many as 20% did not have a positive experience when purchasing a second-hand car. 

This negative experience is fuelled by the onset of additional costs, with 82% of those surveyed who purchased through a private seller, forced to cough up additional money for costs such as immediate mechanical repairs after purchase or extra registration costs due to where they live.

In a submission to the Victoria Government pre-budget 2022-23, the consumer groups highlighted an expert evidence report is generally required for 'lemon' car disputes in Victorian Civil and Administrative Tribunal (VCAT), costing anywhere between $800 to $2000.

Gerard Brody, CEO of Consumer Action Law Centre, said an ombudsman 'with teeth' funded by government and industry would make an immediate and tangible difference to the lives of those Victorians impacted by 'lemon' cars, particularly people on low and middle incomes and those experiencing acute vulnerability such as Aboriginal and immigrant communities. 

"Victoria needs a specialist service to help resolve disputes when a 'lemon' car is purchased," Mr Brody said.

"This would solve a critical problem that hurts people and communities and would provide everyday justice to thousands of Victorians." 

Modelling provided by the submission highlights an ombudsman in 2022 would help more than 3,000 people with access to affordable resolutions to their car issues and save them approximately $2.4 million in avoided costs. 

The calls for an ombudsman in Victoria come as they effectively exist across industries including energy and water, telecommunications and finance.


Advertisement

In the market for a new car? The table below features car loans with some of the lowest interest rates on the market.

Lender

VariableNew1 yearMore details
  • Available for purchasing new and demo vehicles
  • $5,000 to $150,000 loan amount
  • Redraw facility available up to $5000/day
  • Required: Good credit history, stable employment history. Aus citizenship or PR.

New Car Loan - Home Owner Special

  • Available for purchasing new and demo vehicles
  • $5,000 to $150,000 loan amount
  • Redraw facility available up to $5000/day
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
FixedNew99 yearsMore details
Loan amounts from $2k to $75k
  • Available for any new motorised vehicle
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
  • Get quick decision. Funds in 24 hrs if approved
Loan amounts from $2k to $75k

New Car Loan

  • Available for any new motorised vehicle
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
  • Get quick decision. Funds in 24 hrs if approved
FixedNew1 yearMore details
Approval within 24 hoursEarly payout available
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
Approval within 24 hoursEarly payout available

New Car Loan - Special (Fixed)

  • Required: Good credit history, stable employment history. Aus citizenship or PR.
FixedNew2 yearsMore details

New Vehicle Fast Loan Low Rate

    Important Information and Comparison Rate Warning

    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

    The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

    Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of April 21, 2024. View disclaimer.

    Image by Matthias Zomer via Pexels