The Law Handbook 2024

634 Section 6: Houses, communities and the road If a defect appears during the warranty period – whether or not it existed at the time you took delivery of the used car – the car trader has to repair or make good the defect at their own expense so the car is in a reasonable condition for its age. The warranty applies if the car was manufactured no more than 10 years before the date of sale and has been driven for less than 160 000 km. The warranty period is 5000 km or three months from when you take delivery of the car, whichever occurs first. Any period during which the car trader has the car for the purposes of meeting warranty obligations does not count as part of the three-month warranty period. If you suffer loss as a result of a car trader failing to honour the warranty, you may make a claim to the Motor Car Traders’ Guarantee Fund for compensation (s 76 MCT Act). (This fund is administered by Consumer Affairs Victoria.) What is excluded from the warranty? If a car was manufactured more than 10 years before the date of sale or has been driven more than 160 000 km, then a car trader is not obliged to give a warranty. The following are also excluded from the statutory warranty under section 54 of the MCT Act: • defects that are specified in defect notices under section 55; • defects arising from, or incidental to, accidental damage to the car that occurred after taking delivery; • defects arising from misuse or negligence on the part of the driver that occurred after taking delivery; • defects occurring in the tyres, battery or any prescribed accessory (see below) of the car; • sale of a commercial vehicle or motor cycle; • sale to a person who had the car in possession or under control for a continuous period of not less than three months immediately before the sale; • sale to an employee or related company of the car trader; • sale to another car trader or special trader; and • sale by public auction. The prescribed accessories of a car referred to in section 54 of the MCT Act are: radios, cassette players, compact disc players, telephones, car aerials, clocks, cigarette lighters, non-standard body hardware, power outlets, tools other than jacks and wheel braces, light globes, sealed beam lights, non- standard fog lights, non-standard alarms, digital video players, MP3 and MP4 players and docks, GPS systems, and non-standard keyless entry systems (reg 26 MCT Regulations). A car is regarded as having a defect for the purposes of sections 54 and 55 of the MCT Act if one or more of its components is no longer in proper working condition, considering the car’s age or the number of kilometres it has travelled, or if the component is defective to the extent that the car is unroadworthy or is not able to be driven (s 54(10)). If the section 54 warranty does not apply, the car trader must attach a notice to the car, stating that the car is sold without any obligation under the MCT Act to repair or make good any defects that the car may have (s 54(2C); reg 12). If you suffer any loss as a result of a car trader’s failure to attach such a notice to the car, you may make a claim to the Motor Car Traders’ Guarantee Fund to seek compensation for that loss (s 76). (The Motor Car Traders’ Guarantee Fund is administered by Consumer Affairs Victoria.) The car trader must retain the notice for at least six years and must give the purchaser a copy of the notice as soon as possible after the sale (s 83A, 83C; reg 30; penalty: 50 pu). What is the effect of a defect notice? Under section 55 of the MCT Act, a car trader may avoid the warranty provisions by fixing a notice (see reg 13 MCT Regulations) to the used car specifying in reasonable detail any defects believed to exist in the car, together with an estimate of the fair cost of repairing or making good each defect. The following must also occur: 1 the defect notice must be attached to the car at all times; 2 a copy of the defect notice must be signed by the purchaser at or before the time of sale; 3 a true copy of the signed notice must be given to the purchaser upon the sale; and 4 the estimate of the cost of repairing the defects must be reasonable. The car trader must retain the defect notice for at least six years and must give the purchaser a copy of the defect notice as soon as possible after the sale (s 83A, 83C; reg 30; penalty: 50 pu).