If you’ve ever bought a car that seemed to have endless problems, you might have heard the term “lemon.” In the United States, there are specific “lemon laws” to protect car buyers. But in Australia, while we don’t have separate “lemon laws,” we do have strong general protections under the Australian Consumer Law (ACL).
What does the ACL do?
The ACL gives consumers a set of rights—called “consumer guarantees”—whenever you buy goods or services, including new or used cars. These rights apply in addition to anything written in a contract or warranty, and businesses can’t override them, no matter what their paperwork says.
Key rights when buying a car
When you buy a car from a business (like a dealership), the ACL says it must be:
- Fit for purpose: The car should do what cars are supposed to do.
- Good in appearance and finish: It shouldn’t have obvious defects when you purchase it.
- Free from faults: The car shouldn’t have mechanical or electrical issues at the time of sale.
- Safe: It mustn’t be dangerous to drive.
- Durable: It should last for a reasonable time, given its age and price.
For higher-priced or newer cars, you can expect higher standards. For example, if you buy a new luxury car and it develops major electrical problems soon after purchase, it likely doesn’t meet the required standard of “acceptable quality” under the ACL.
What happens if your car doesn’t meet these standards?
If the problem is serious (for example, if the car is unsafe or has major faults), you generally have the right to choose a repair, replacement, or refund.
What doesn’t the ACL cover?
- If you buy a car privately (like through a one-off sale from someone on Gumtree), most protections only cover things like legal ownership, not the car’s quality or fitness for purpose.
- Any other promises about quality or suitability usually don’t apply in these private sales.
What losses can you claim?
If the car is faulty, you can seek compensation for losses directly related to the problem. But you can’t claim everything imaginable. For example, if your car breaks down far from home and you have extra accommodation costs while waiting for repairs, those costs may not be covered—they’re often considered too remote from the original fault.
Be cautious before starting legal action
The rules around consumer protection for cars can be complex, and people sometimes misunderstand what they can and can’t claim. Before spending time and money on legal action, it’s smart to get good advice about your chances and what you’re likely to get out of it. Sometimes, legal costs can end up being more than the value of the car.
If you have questions or are thinking of making a claim about a faulty car, consider getting advice before acting.
Key Points to Remember:
- The ACL protects you when buying from a dealer, not necessarily from private sellers.
- You’re usually entitled to a repair, replacement, or refund for a major fault.
- Only losses directly related to the fault can be recovered.
- Seek advice before starting legal action to ensure it’s worth it.
