ACCC investigation into car makers reveals the biggest rip-off it has ever uncovered
THE consumer cops say car makers are perpetrating the biggest rip-off they have ever uncovered, vindicating dudded owners such as this man.
THE consumer cops say car makers are perpetrating the biggest rip-off they have ever uncovered.
To put an end to it, the Australian Competition and Consumer Commission is pushing for new laws and foreshadowing fresh legal action.
Those moves follow a year-long ACCC investigation into new car retailing that reveals:
* complaints handling systems deny consumers their legal rights;
* fuel consumption claims are out by an average of 25 per cent;
* owners are being hoodwinked through “potentially misleading” warranty claims in log books; which
* helps the industry make nearly as much from servicing as it does from selling cars.
“The cost to consumers from the problems were are uncovering here is ... probably larger than anything we’ve ever dealt with,” ACCC chairman Rod Sims told News Corp Australia.
The ACCC is backing legislative reforms before state, territory and federal governments aimed at making it easier for owners of dodgy cars to get a refund or replacement.
Mr Sims said there was currently a “culture of repair”, noting the ACCC had recently accused Ford of unsuccessfully attempting to fix the same significant fault up to seven times.
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The watchdog also wants politicians to force the industry to make technical information available to all mechanics.
“Independent repairers are a lot cheaper,” Mr Sims said.
“We would hope that the extra competition will see service costs come down.”
The ACCC’s investigation found margins on servicing average 64 per cent.
So even though servicing only brings in seven per cent of revenue, it delivers 36 per cent of profit, while car sales — which account for two-third of all revenue — bring in 38 per cent of profit.
A survey done as part of the probe found three in 10 consumers take their vehicle to a dealership for servicing or repairs because they believe it is compulsory according to their log book.
Such statements were “potentially misleading” under the law, Mr Sims said.
“The industry is on notice,” he said.
“They’ve got to fix this and if it’s not fixed we will be taking court action.”
Fuel consumption claims that understated usage by an average of 25 per cent also had the potential to be misleading, Mr Sims said.
The ACCC is recommending new cars come with a sticker that gives a star-rating or annual operating cost estimate.
The findings are a vindication for consumers such as Ashton Wood, who destroyed his ‘lemon’ Jeep in 2014 out of sheer frustration with his treatment.
He has since become a leading advocate for others dudded by manufacturers.
Mr Wood made a submission to the ACCC investigation of the new car retailing industry.
It was scathing of both manufacturers and the consumer commission.
The ACCC prohibited the media from discussing the findings of its investigation with anyone other than the ACCC prior to publication.