Kuta Beach

Kuta Beach

Saturday, 24 October 2009

Old Car or New Car?

In the United States there exist so-called lemon laws that state that if a new car you buy stuffs up a certain number of times you are legally entitled to a replacement car.

To understand why there are calls for lemon laws in Australia, read Helen Moss's submission to Consumer Affairs Victoria regarding lemon laws.

Such lemon laws were proposed for Australia in 2007 by state governments here. But today, all of a sudden, the Commonwealth government has stepped in and claimed that lemon laws are not necessary because new legislation -- the Australian Consumer Law -- will cover consumers if their cars are dodgy.

It is possible that this new national legislation will work, but there is also the possibility that going to court to fight car manufacturers won't be practical for the average person because of high costs.

That some new cars may be lemons I believe is a good reason never to buy a new car.

If you buy an old car, even if the car turns out to be a lemon, you lose less money because the car you buy is not worth as much.

Furthermore, do not think that warranties will protect you. If you buy a car and there is a fault and you bring it to the dealer for repair, the dealer has no incentive to fix the problem for you for free. They waste time and money, so they have an incentive to lie and say that there is nothing wrong with the car. However, if you have no warranty and you simply bring your car to the mechanic if there is a fault, you pay for the service and the mechanic has an incentive to fix the problem because he gets paid for the service. He will therefore likely do it and also be polite to you because he has an incentive to do so.

Before you buy a second-hand car, make sure you get it RACV tested.

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