ACL – WHEN DOES A CONSUMER LOSE THE RIGHT TO REJECT THEIR VEHICLE?

Like other consumers, under Australian Consumer Law (ACL), vehicle purchasers have a consumer guarantee that their vehicle is fit for purpose, acceptable in appearance and finish, free from defects, safe and durable.

Consumers whose vehicles have major faults and are therefore not of acceptable quality have the right to reject their goods and seek a refund or replacement from the Dealer. There are, however, circumstances outlined in the ACL in which a consumer will lose their right to reject and therefore Dealers and manufacturer/distributors are not obligated to replace or refund the customer’s vehicle.

For a consumer to be entitled to reject their vehicle on the basis of unacceptable quality they must not have caused, by action or inaction, the unacceptable quality.
Section 54(6) of the ACL states that, “goods do not fail to be of acceptable quality if the consumer to whom they are supplied causes them to become of unacceptable quality, or fails to take reasonable steps to prevent them from becoming of unacceptable quality; and they are damaged by abnormal use.”

While the law does not define abnormal use, the wear and tear and gradual deterioration of a vehicle through normal use does not qualify. The breaking down of parts, scratching, scuffing and discolouration is a normal and predictable part of vehicle use and is not considered abnormal. An example of abnormal use could include leaving the roof of a convertible vehicle open resulting in interior damage, or using it over rough terrain for which a vehicle is not suitable. A consumer cannot reject their vehicle on the basis of unacceptable quality if they were responsible for it and if they used the vehicle abnormally.

Even if a consumer is not responsible for causing the vehicle to be of unacceptable quality there are still a number of circumstances outlined in section 262 of the ACL that could result in a consumer losing their right to reject a vehicle. These include: the rejection period has passed; the consumer has lost, destroyed or disposed of the vehicle; the vehicle was damaged after being delivered to the consumer, and the vehicle, part or component has been attached to or incorporated in some other property and cannot be detached without damaging it.

This would mean, for example, that even if a consumer establishes that their vehicle is of unacceptable quality as a result of a flaw in the manufacture of the vehicle, they will not be entitled to reject the vehicle if they have since caused unrelated damage to their vehicle. The most likely scenario here is where a consumer has not looked after the vehicle and it suffers from significant interior and/or exterior damage – something more than fair wear and tear.

It seems logical that a consumer who has failed to look after a vehicle should not benefit from the right to reject. This is why s262 provides some qualifications to the consumer’s rights. Dealers and manufacturers/distributors are entitled to take this into account when determining a consumer’s right.

For further information,
contact Vinesh George on 0404 077 078
or email vinesh@vsgeorge.com.au

Vinesh George
Company Secretary and Legal Counsel, AADA | Principal,
VS George Lawyers

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