Warranties for cars

A statutory warranty under the Motor Dealers Act 1974requires a licensed dealer to fix certain defects that occur in vehicles they have sold. When buying a second-hand car you can only get a statutory warranty if you buy the car from a licensed motor dealer.

　

In NSW all passenger cars under 10 years/160,000km and under the luxury car tax limit, have a minimum warranty of 3 months or 5,000km - whichever comes first. This is called the standard warranty and applies to cars with no known defects.

　

The car and all accessories fitted at the time of sale
are covered by the warranty. Superficial damage (such as paint and upholstery) and normal wear and tear are not
covered by the warranty.

　

The warranty does not cover:

• routine services

• tune-ups

• batteries

• tyres (however, tyres must be roadworthy at the
time of sale)

• defects that arise from an accident or misuse
of the vehicle.

　

Every second-hand vehicle for sale within a
licensed dealership should have a form describing the vehicle displayed. The form includes the dealer's name, cash price, engine number, odometer reading and whether a
warranty applies. The form displayed will either be a Form 4, 6, or 8 and this will indicate the term of the warranty applying
to the vehicle.

　

Form 4 indicates the car has a standard statutory
warranty as described above.

　

Form 6 indicates that the standard warranty of 3months/5,000km applies, but only to defects relating to safety. The dealer should list on the form the items that will not be covered by the warranty as well as an estimate of the related repair costs. A car displaying a Form 6 must also be sold with a pink slip showing that the car is roadworthy.

　

Form 8 indicates that the car is not covered by a warranty. Generally the car is older than ten years or has travelled more than 160,000km. A car displaying a Form 8 must be sold with a pink slip showing that the car is roadworthy.

　

In addition, Form 14 indicates that the car is not covered by a warranty and is displayed on a vehicle priced above the luxury car limit. The car is to be sold in a roadworthy condition.

　

Extended warranties are available when you buy a car. Often they are provided by the manufacturer and are sold by the dealer when you purchase a car. Before deciding to buy an extended warranty you should make sure you understand fully what is being covered.

　

There are often a significant number of exclusions and conditions in extended warranties. For more
information contact the Australian Securities and Investments Commission (ASIC) web site at http://www.asic.gov.au/ or call 1300 300 630.

　

(Source: Office of Fair Trading)