Second-hand Vehicle Dealers (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 21 February 2024.)

The Hon. A. PICCOLO (Light) (17:06): When I last spoke, I talked about some of the changes and how even though they were suggested by the industry some of them were obviously quite beneficial for consumers as well. I think I had just got to the hire car history, the proposed sections 16 and 20.

At the moment, my understanding is that dealers and auctioneers will not be required to display the name and address of the person to whom a vehicle was previously leased as a taxi or hire car on the notice of sale of a vehicle under changes to sections 16 to 20 of the act. However, dealers and auctioneers will be required to provide these details on request from a prospective purchaser, and failure to provide the information will attract a maximum penalty of $5,000.

In circumstances where the information is not reasonably available, Consumer and Business Services will not take enforcement action against a dealer or auctioneer, for example, where the vehicle has been purchased in another state where the requirement to disclose previous lessee details does not apply.

These amendments also seek to preserve the privacy of previous vehicle lessees, whilst also ensuring that consumers have access to information to support their purchasing decision. Again, on the one hand it removes red tape, but secondly it also enables a right to the consumer to access the information if they believe they need it.

Also under section 34(1), which I just touched upon previously, the penalty for tampering with details of the mileage covered by the vehicle will be increased from $10,000 to $150,000 for first and second offences and $150,000 and/or imprisonment for two years for third and subsequent offences.

The tampering of a vehicle to alter the mileage it has undertaken is probably one of the more serious offences you can actually do in terms of withholding important information to a purchaser because, obviously, with the number of mileage comes issues around the safety of the vehicle, the servicing of the vehicle, and that sort of information is very important.

I think every consumer has a right to know what mileage that vehicle has covered. As I said, it causes significant harm to consumers and allows unsafe vehicles to circulate on our roads. These amendments to section 34 of the act will see South Australia leading the nation with the toughest penalties in Australia for tampering with the vehicle in that way.

Section 7(1) deals with increased penalties for unlicensed dealing. For the first or second offences by natural persons, the penalty for unlicensed dealing will increase from $100,000 to $150,000. For third or subsequent offences, the penalty will increase from $100,000 or 12 months' imprisonment or both, or $250,000 or two years' imprisonment or both. The maximum penalty for body corporates will also increase from $250,000 to $500,000 under section 7 of the act. Increasing these penalties may deter more individuals from flouting the law and better protect the community and licensed dealers from this harmful activity.

There are often, in the papers and markets, etc., people who actually sell vehicles on a regular basis where they are not really necessarily private vehicles. I think unlicensed dealers provide consumers with less protection but it also actually does damage to those licensed dealers because it actually hurts the licensed industry. I think these penalties are appropriate. On the one hand, it protects the legitimate industry and weeds out the rogue elements on the other.

Under the new section 34A, for the provision of false and misleading statements about mileage readings, a new offence will be created for false and misleading statements about the accuracy of the readings on vehicles. A maximum penalty of $30,000 or two years' imprisonment will apply to a person who knowingly makes a false or misleading statement about the accuracy of the vehicle's mileage reading to a purchaser or prospective purchaser.

At present, only dealers can be prosecuted for the false and misleading statements about mileage readings under relevant provisions of the Australian Consumer Law. The new offence in this proposed section 34A intends to deter private sellers from engaging in the same misconduct. I say misconduct because, again, that is an important part of decision-making for purchasers who actually want to buy a vehicle.

Section 34, which is a new provision, enables compensation for mileage tampering. Currently, victims of mileage tampering can only obtain compensation where a dealer has been convicted of a tampering offence. Where a private seller is convicted of the same offence, no compensation is available under the act. Under this amendment to section 34, courts will have the capacity to order compensation for a person who has purchased a vehicle with a tampered mileage reading from a private seller where the private seller has been convicted of a tampering offence.

Compensation will relate to any disadvantage suffered by the purchaser, including costs incurred or likely to be incurred to rectify the reading on the vehicle. I think this will also hopefully deter those people who are not licensed to sell vehicles and encourage them to actually conduct themselves in an appropriate manner.

To achieve all of this, the commissioner will be given additional powers. Under section 34B, the Commissioner for Consumer Affairs will receive new powers to direct a person to rectify a mileage reading or refrain from selling or disposing of a vehicle with an altered reading unless the commissioner has provided written approval or the vehicle's mileage has been rectified.

The new section 34B in the act will ensure that vehicles with an incorrect mileage reading are not allowed to continue circulating in the community and misleading potential purchasers and compounding the issues around safety as well in the longer term. There are some other things the commissioner has to do to rectify that, but he will have the power to take those matters further.

Under sections 3(2) and 23(7), dealing with electric and hybrid vehicles, the duty to repair vehicles will be expanded to cover the main propulsion battery for hybrid and electric vehicles within the statutory warranty period, recognising the growing popularity of these vehicles in South Australia and the need to have equivalent protections for those vehicle owners. The duty will apply to electric and hybrid vehicles purchased before or after the commencement of the amendment act, which I think is an important new provision as well.

Under schedule 3, clause 3(2), the purpose of the Second-hand Vehicles Compensation Fund will be expanded so that the fund can be used for education, research or reform programs that benefits dealers, auctioneers, salespersons or the general public. Under changes to schedule 3 of the act, any proposed expenditure on these programs will still require the approval of the minister. I think this is a useful use of that money because I think the greater the education the better the understanding consumers have of their rights, and also the responsibility that people selling the vehicles have is important. If you can actually get people to do the right thing, you do not have to spend money on enforcement proceedings, etc.

There is some additional information required in the contracts of sale under section 17(1)(a). This amendment aims to reduce the red tape and provides greater flexibility to the dealers, whilst retaining important information for consumers about their rights and obligations under contracts of sale.

In the few seconds I have left, we are catching up with the new world. This section deals with fax communication. Section 18B of the act will be amended to remove the option of fax communication for purchasers providing written notice to a dealer of their intention to rescind a sale contract during the cooling-off period. Section 51 will be amended to remove the option of fax communication for service of documents. These amendments reflect changes to communication practices in the industry, including the increased use of email and the declining use of fax communication, which I am sure a lot of dealers probably do not use. With those comments, I support the bill.

Mr WHETSTONE (Chaffey) (17:16): I will make a small contribution to an area that I am quite familiar with. I declare that my former business interests did have car yard dealerships, repairs and sales. It gave me an insight into how some operators work and how others might differ.

Second-hand car yard dealers have for many decades had a bad rap. It is a little bit like the profession that we are in here: some of those bad ones make the good ones look bad. There is no difference when it comes to second-hand car dealerships. They do play a vital role in the automotive industry. They are there to provide a service for a consumer who wants to go out and purchase a vehicle for many different reasons, whether that is because of affordability, because that is the style of vehicle that you want or because it fits your pay grade.

Back in the early days, once I had moved on from undertaking a trade and working in the automotive industry, I was able to set up a small business where we built cars and boats and on the side we also did wholesale repairs for car dealerships and there were always a number of concerning asks when car yards came to the workshop looking for cars to be either repaired for condition of sale or those new owners had gone out and had a car inspection and then it was given a once-over and the car would have to come back in and have some of those repairs undertaken for the condition of the sale.

I am concerned that if there is any previous owner taken off the criteria with ownership, that does take away the ability for a potential owner of a vehicle to gain a better understanding of what the history is because the history can be chequered. To be fair, the majority of the industry is honest. I would say that in the very high 90 percentile we would see honest citizens. There are always those very few who do flout the laws, and I guess there is the gentleman's agreement about doing the right thing by a potential customer. Many of those customers are young, first-time car buyers, and sometimes they are vulnerable when they go in to purchase cars.

I know I have dwelled a little bit on the negative when it comes to someone going into a car yard to purchase, but I guess I wanted to highlight what I had seen over the course of my time, not only in a workshop that was primarily doing that type of work to create cashflow so that we could build a business and move on to greater heights, but once I had moved on from there into the city car yard we undertook a number of valet services: the showroom, the detailing, the mechanical repairs, modification to vehicles. There were many and varied services.

The sector was once upon a time always prone to deceit and misuse. A lot of that has been cleared up over recent years because we are moving into a new dynamic with motor vehicles. Nowadays, we see very few cars that have the bonnet lifted, you pull the distributor cap off, change a set of spark plugs and set the fuel levels in the carburettor. Nowadays, it is all fuel injected. They plug a computer into the engine and it will telltale. The majority of those computers will give a telltale, whether it has had underhanded operations on a vehicle. I must say that it is becoming much, much harder. In particular, it seems there has been a bit of a focus on odometers. Odometers nowadays can have computers, as I understand it, plugged in and that computer overrides the visual aspect of an odometer on the dashboard.

What I have seen over a long period of time is that dealers very quickly develop a reputation. Whether it is a vehicle that is taken to the RAA for an inspection or it is taken to the department's inspection centre for a once-over or, if we have a disgruntled new owner of a vehicle, they will take it to a police station and get it defected. Usually, that defect might be one of the most simple defects that would warrant some repair work, but then once you go back to have that defect removed they will then go over that vehicle with a fine tooth comb and find many more issues, potentially, with a vehicle.

I will touch on my involvement with the second-hand vehicle industry or the car-yard industry, the majority in metropolitan Adelaide. Since living in the regions for the majority of my life, things are very different. In small communities word travels fast if there is a dealer looking for any form of extended life in a profession of selling second-hand motor vehicles, or even new motor vehicles to that extent, or demonstrators, or selling second-hand hire cars. I have seen a number of vehicles that have been hire cars, and you can normally always tell when a hire car comes in for either repairs or assessment because there are a number of telltale signs that straightaway stand out.

Over time, there have been descriptions for cars when they come into a workshop from a yard or from someone who is looking for it to be tizzied up for sale. They come in and ask for a 'haircut'. You do not go into an automotive workshop looking for a haircut, and usually it's, 'What number?' That would determine how much the speedometer is being adjusted.

You can go looking for the invisible oil. We know that many vehicles, particularly old Mustangs, always blow blue smoke, for different reasons. It was brought to my attention that we can go into spare parts sections, and we can buy synthetic oil that burns clear. If you have a worn engine and it has previously had an issue with blowing smoke or blowing blue smoke, which is code for burning oil, you put a different oil in there and it burns clear—no-one is the wiser.

An STP and banana treatment: that usually works out when we are looking to fix up a noisy diff.

The Hon. N.D. Champion: You are really going back in time now.

Mr WHETSTONE: Yes. I bring this to the chamber's attention, because who knows if it is not happening? Some of the more historical cars, some of those older cars, are starting to become quite valuable. Anything with a steel bumper bar in today's automotive circle of sales or repairs is usually worth a lot more than it was when it was brand new.

The oxyacetylene steering repair: we have heard abound steering joints, suspension joints and all sorts of joints that wear. In a lot of instances, rather than repair them, some mechanical workshops might run a line of weld around that joint. It tightens it up. It tightens the play out of the joint, and so that is also something that I have witnessed. It is not something I have undertaken personally, but I have seen the end result.

An Ajax recon: in some of the older engines, either where the bores glaze or they are worn out, I have seen what happens when you tip Ajax down the carburettor. It deglazes the bore. It also makes a worn piston ring bed in, and it helps to stop the smoke blowing. Believe it or not, it is a true thing.

When we have to fix windowsills or we have to fix water leaks or we have to fix issues with incoming dirt and dust in some of those vehicles, there is nothing like a good tube of Silastic that would fix that up.

The other thing is, when people come in and ask for a 'trip to the Bar's', you would say, 'What is he going on about?' That is normally about fixing water leaks—a leaky water pump, a corroded manifold, that type of thing. It is amazing what Bar's Leak will do. Bar's Leak has been a renowned product for many decades in fixing that.

A hot dump: a hot dump is something that has been used by particular car yards when they are looking to lower a vehicle. It is called an oxyacetylene torch on a coil spring, and they drop the vehicle down to whatever height is desired. That is what is called a hot dump. Normally, a set of mags and a hot dump and you have a car that is looking pretty good. It is what it is.

I really do think that a majority of those exercises are a sign of the past. If I am ever speaking to young ones and they are looking to buy a vehicle and ask, 'What are the signs that I should be looking for if I am looking for a car that has been looked after?', I would say those signs of age. Make sure it has a logbook. If it has not got a logbook, there is usually a reason for that. That means there is a non-compliant service history or it is a non-compliant speedometer.

If you see excessive wear on the gear knob or steering wheel, they usually indicate to you that the car has had a significant amount of use and wear. If it does not correlate with the speedometer or the condition of the car, you can normally be suspicious that things have been played with. Undercarriage damage is something that people should be aware of, whether it has been dented or damaged, whether it has run up over gutters or run into high bollards—that type of thing. That normally means that the car has had significant structural damage.

I bring that to the attention of some of the members here today just so we can understand that there are people out there who have underhanded ways of deceit, behaving dishonestly. Someone is the recipient of those actions. My very first car was an EH Holden. It was an S4. I was very proud of that. It was baby blue with a white roof. It was a Bathurst EH. It was a 179 h.p. with a high-compression head, dual carburettors—

The Hon. N.D. Champion: Worth a fortune.

Mr WHETSTONE: It is worth a fortune today, yes. It came out with a cast exhaust manifold, and it was almost like a set of headers. Back in that day, it was regarded as a great car, but it was never regarded as a collector's item as it would be today. I bought that car in good faith. I was told it had never been to the crash shop and all the rest of it. But by the time I had done an inspection, paid the money and all the rest of it, it had a lot of filler in the doors and all sorts of things—rust, if you like.

That was a very steep learning curve for me as a young fella. I got my licence on my 16^th birthday, and I was out to rock the world in my brand new acquisition. Over time, I have been quite fortunate, as have a lot of people. Back in those days, whether you had a little Torana XU-1 or a Monaro with a small-block Chev in it, manual—

Mr Teague: LJ?

Mr WHETSTONE: I had an LC. Over time, through my times in workshops, I had a lot of imported cars. It gave me an understanding that not all is what it looks to be on the outside of a car. They can put a lot of polish and paint on a piece of junk and make it look good, but at the end of the day, you have got to be on your game. If you are not, if you have not sought advice, if you have not sought an inspection, I would urge any young person, any person who is in the market for a car, to do so. That is the first port of call.

This legislation is going to increase penalties for dealers without licences, interfering with cars illegally—deception, I call it. Customers go to a dealer for some level of reliability. They go there with a level of trust, and I think it is only fair that these second-hand dealers do exactly that. I am happy to keep going.

The ACTING SPEAKER (Mr Odenwalder): It seemed like you were about to seek leave, but you can keep going. You have four minutes left on the clock, member for Chaffey. I am easy either way. I do not make the rules here.

Mr WHETSTONE: I will keep going; that will streamline the process somewhat. The bill introduces new sections to prohibit false and misleading statements regarding odometers. I think it is very hard to justify someone tampering with an odometer. That is why I say that you have to read the car with your eyes. You have to look at telltale signs or giveaway signs that will tell you that the car has had excessive use or has a chequered history with maintenance. Making sure that a car has a logbook is probably the best form of security that you are getting what you are paying for.

The bill increases privacy for those selling vehicles to dealerships in regard to the display of the names and addresses of previous vehicle owners. I do not agree with that, but I guess for the seamless passage of this amendment, it is something that I would have to run with. To not display the former owner usually gives a pretty good indication that it could have been a hire-car company, or it could have been someone in a faraway place or state. You would lose that understanding of where the car has been and what sort of a life it has had. You can normally tell by what the underbody looks like if it has been on excessively rough and dirt roads.

We need to understand that consumers need a greater level of comfort when they are out there looking to buy a car, particularly for our young ones. They need a car that is safe that potentially will be reliable and, for a car to be safe, it has to have some level of assurance that it has not been tampered with in some of those ways that I have explained in my contribution.

We must make sure that the responsibility on the dealership is front and centre. I think it is also up to the dealer to be forthcoming with answers to any questions asked of them about the history of the car; I think the dealer has a responsibility to do that. I have seen a lot of people lose all of their money on cars that are almost worthless that they have paid a lot of money for, and it really does break one's heart.

I know that the minister is here. He has quite an interest in historic muscle cars. They are a thing of the future. We here today all look at those cars and see what we used to drive as young ones, and it really does warm the cockles of my heart to think that we have politicians who are prepared to go out and buy cars of notoriety, cars with steel bumper bars, cars with V8s, manual gearboxes—

The Hon. N.D. Champion: You'll be chasing me in the Camaro.

Mr WHETSTONE: Yes, and there will be a Camaro sitting in my driveway sometime soon, I am hoping. I do support the amendment bill. I do hope that people treat buying a car with a great deal of professionalism so that they can get good value for money and make sure that they have a car that is safe and worthy to drive on our roads.

Debate adjourned on motion of Ms Hood.