Car dealerships and consumer rights

By Brian Joss Time of article published May 25, 2019

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Car dealerships dealing in both new and used cars do not have a particularly good reputation when it comes to consumer rights.

Although Jan Schoeman, chief operating officer of the Retail Motor Industry Organisation (RMI), says that, in his experience, it is not the norm that accredited dealers are reluctant to help disgruntled customers, consumer lawyer Trudie Broekmann, of Trudie Broekmann Attorneys in the Bo-Kaap, says she battles to get car dealerships to comply with the Consumer Protection Act (CPA).

“I spend a lot of time engaging with dealerships trying to persuade them to comply with the CPA. Frustratingly, hardly any of them have an interest in complying with the law. Generally, it’s only when car manufacturers put pressure on the dealership, or when my client goes to the press, that we get results. Dealers are much better at adhering to the CPA’s provision that the consumer must approve a quote before any work is done on a car. There’s also patchy compliance with the requirement that consumers be informed if any parts used are reconditioned, rather than new,” Broekmann says.

On the rights of consumers under common law and the CPA, Schoeman says: “Common law rights include the right to claim damages for repairs. Under the CPA, the consumer has the right to choose and inspect products; to fair and honest dealings; disclosure of information; good quality and safety, among others. And consumers are entitled to enforce these rights.”

The National Automobile Dealers Association (Nada) says the CPA “does not see a difference between new and used cars, except where it says we need to look at the circumstances surrounding the supply of the used car as part of the test to see if it is suitable. The test for a new car differs in that the circumstances of supply are different. However, the six-month quality warranty and rights would still apply. Guarantees and warranties outside of the CPA will differ based on commercial models of the retailer when applied to new and used cars.”

Schoeman says the terms “guarantee” and “warranty” are often used interchangeably, which can cause confusion. A guarantee is a promise that a product will live up to its expectations; if it does not, the consumer may be entitled to a replacement or a refund. A warranty is usually given on certain parts or specific events, and if there is a failure, it will need to be repaired or replaced, depending on the warranty cover.

“A dealer in used cars is required to disclose any material defects, latent or patent. Fair wear and tear is inherent in used vehicles and should be disclosed if it is not consistent with the age and visible condition of the vehicle. Buyers can’t expect a used car to deliver the same value as a new one. If a consumer buys a used car with 50% brake pads and 40% tyre tread remaining, he should not expect the tyres to be new or brake pads replaced, unless it was agreed to in the sale negotiation,” Schoeman says.

The CPA is clear about returning a used car. “Many consumers don’t want to understand that they are liable for the benefit (cost) of use and fair additional wear. A return, however, will depend on the circumstances.” says Schoeman.

The RMI says a buyer should inspect the vehicle before accepting delivery, to ensure that is fit for purpose. It also applies if you buy a car on auction. Other legislation may be applicable, including the Second Hand Goods Act and the Standards Act, but the starting point is the CPA.

According to the CPA, Schoeman said, the onus of the buyer understanding the agreement is with the supplier. “However, the common law principle - he who alleges a defect must prove it - still applies if the consumer signs the written agreement once he understands it.”

Nada says in the case of new vehicles, it is not the dealer who may be reluctant to repair cars under warranty, as the dealer is not the warranty provider. “The dealer is obliged to contact the manufacturer who will approve the repair. Where a warranty claim is rejected, it is not the dealer but the manufacturer who will determine if the conditions of the warranty have been breached.”

Lucious Bodibe, public affairs manager in the office of the Motoring Industry Ombudsman, said the majority of motor dealers generally comply with the CPA, although there are a few delinquent dealers, “but our inspectors are investigating”.

The Automotive Industry Code of Conduct requires the ombud to create awareness of the CPA among all players, including consumers. “We believe that dealers and their staff should undergo training, and have regular refresher courses,” Bodibe says.


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