Changes To Motor Vehicle Contracts

The Western Australia Department of Mines Industry Regulation and Safety (DMIRS) has recently completed a combined review of legislation regulating motor vehicle dealers and repairers, and released a Decision Regulatory Impact Statement (DRIS) setting out proposed changes. These changes will provide stronger protection to WA consumers dealing with motor vehicle dealers and repairers.

The key recommendations provided by the DRIS include:

1. Introducing Cooling off Periods for linked finance contracts.

Under the current motor vehicle regime, WA consumers have no cooling off period when purchasing a vehicle. The DRIS recommends that a cooling off period be introduced to contracts where the purchaser obtains finance through their dealer. This would allow buyers to decide whether to proceed with the purchase and brings WA into line with most other Australian states.

2. Reducing the maximum liquidated damages for cancelling a sales contract

Currently a dealer can charge up to 15% of the total purchase price of a vehicle if the purchaser changes their mind and does not proceed. The DRIS recommends that this be reduced to a maximum of 5% for purchases which do not have a cooling off period. A lower maximum liquidated damages amount will also bring WA into line with most other Australian states.

For many years, CCLSWA has argued that WA consumers need much better protection and have tirelessly advocated for a cooling-off right and a reduction in the penalty fee when consumers terminate a car contract. CCLSWA was mentioned a number of times in the DRIS which featured a number of our case studies and submissions. We are excited to see how this review will impact the regulation of motor vehicle dealers and repairers. We are watching this space to see when the recommendations become law.

Click here to read the DRIS in full.

 

 

Michael Duncan