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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2024-02-08 Daily Xml
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Second-hand Vehicle Dealers (Miscellaneous) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 15 November 2023.)

Mrs PEARCE (King) (17:08): Many of us in this chamber would know of someone who has had a car that has caused them headaches. My husband's first car was certainly one of them and it had such a great impact that I am still hearing about it. He saved up all he could for his first car, a lovely red 1976 HJ Holden ute. It was a magnificent car. More importantly, it was also what he needed to be able to get to and from his work. Coming from a country town, we only had one bus route growing up and being a shiftworker meant that it did not always suffice as transportation for work. He needed that car. It absolutely was a necessity.

Unfortunately, it was riddled with issues. The gearbox was shot. I often hear stories about how he would need to crawl under the car to kick it back into place. It would overheat in the summer and at one point the engine mounts broke, leading the engine to drop out of the car while he was at work. By that point he had decided he had to get another car and was fortunate to have enough money to be able to get something a little more trustworthy. He was fortunate that he was able to do that because not everybody can.

After your home, your car can be one of the biggest investments you make, an investment for so many that is a necessity. It certainly was for me. I lived 15 kilometres out of town, I needed my first car to be able to get to and from school, to sporting events and to community commitments. Without it, I would not have been able to contribute fully within my community or access all that was available to me at the time. So to make such a big investment only to find out you have been ripped off through deliberate dodgy acts is unacceptable and for that reason I stand in support of the Second-hand Vehicle Dealers (Miscellaneous) Amendment Bill 2023.

I support the bill because it will help reduce red tape for second-hand dealers, it will help streamline purchases and, most importantly, it will strengthen protections for consumers. We are a state that likes to drive and there are more than a million licensed drivers across South Australia who will likely purchase a vehicle multiple times throughout the various stages of their life, all the way from their first car to the car that they will purchase upon retirement.

The reality is many consumers would prefer to purchase a second-hand vehicle and that is for a few different reasons. Traditionally, second-hand vehicles save consumers money due to the depreciation of value once it hits the road, albeit we are in an interesting time regarding that, which is pertinent to my second point that the demand for cars has increased in recent years and new manufacturers have not been able to build enough new vehicles to keep up with that demand. That is leading some consumers who would like a new car to pay above the odds, to skip lengthy waitlists by buying a near-new one often with low kilometres, which is why ensuring there is no tampering with odometers is so important. For both of these reasons we are seeing an increase in the amount of second-hand cars purchased and we want to ensure that we have the adequate protections in place.

We know that many consumers prefer to purchase a second-hand vehicle from a licensed dealer rather than through private sale because of the protections that are afforded to them under those circumstances. We have an act to oversee the licensing of motor vehicle dealers to ensure that we have an informed and reputable industry, as well as strong consumer protections. We recognise that despite minor amendments over the years, the act and the Second-hand Vehicle Dealers Regulations have not been comprehensively reviewed since 2009 and a lot has certainly happened in that time period in this area.

Since this time, the Australian Consumer Law has been introduced and there have been changes to technology that have impacted vehicle standards, the way that dealers operate their businesses and the expectations of consumers. As I mentioned earlier, there is a developing trend within the sector. We need to be ensuring that we are keeping up. By improving parts of the act relating to the duty to repair vehicles, cooling-off periods, disclosing disclosure of information about previous vehicle owners, electric and hybrid vehicles, contracts of sale, and penalties for non-compliance by dealers, we are able to modernise the legislation in place to protect consumers.

Firstly, this bill seeks to increase maximum penalties for unlicensed dealing and tampering with vehicle odometers. Recent prosecutions for odometer tampering have resulted in fines far less than the maximum amount and existing fines are often just a small proportion of the profit that is made from tampering with an odometer. It is why we are seeking to increase the fine for odometer tampering from $10,000 to $150,000 or imprisonment of two years, making South Australia the jurisdiction with the toughest penalties in Australia for this form of behaviour.

Changes to the act will also allow purchasers to apply to the court for compensation from a private seller where the private seller has been convicted of odometer tampering. Previously, purchasers could only seek compensation from dealers for any disadvantage they had suffered after buying a vehicle with a tampered odometer.

In regard to unlicensed dealing offences, the penalty for a first or second offence will increase from $100,000 to $150,000. The penalty for third and subsequent offences will increase from $100,000 or 12 months' imprisonment to $250,000 or two years' imprisonment. The maximum penalty for body corporates that engage in unlicensed dealing will also increase from $250,000 to $500,000. Increasing these penalties will act as a deterrent for those who seek to profit from unsuspecting purchasers and better protect the community and licensed dealers from the adverse impacts of these activities.

Additionally, a new offence will be created for false and misleading statements in relation to odometers. Furthermore, the Commissioner for Consumer Affairs will be able to direct a person to rectify an odometer that has been altered and stop a person from selling or disposing of a vehicle with a tampered odometer. This will ensure that history does not repeat over the lifetime of the vehicle.

These decisions will be reviewable with the South Australian Civil and Administrative Tribunal, and a failure to comply with a direction will attract a maximum fine of $20,000. The commissioner will also have the option of paying to rectify an odometer where these costs are not recoverable by other means, such as compensation following a prosecution. We do this because we believe in doing what we can to support road safety, and we anticipate that these new enforcement powers will help reduce the risk of unsafe vehicles being driven on South Australian roads.

These changes will allow second-hand vehicle dealers to disclose defects that will not be subject to the duty to repair, provided that the vehicle remains roadworthy. Under current provisions in the act, dealers have a duty to repair a defect that arises during or after the sale of the vehicle. There are a number of exemptions to this requirement, including vehicles that are over 15 years old or that have been driven more than 200,000 kilometres before the sale.

We are also providing greater protections to consumers by removing the current provisions that allow someone purchasing a vehicle to waive their general right to have a vehicle repaired by the dealer under the duty to repair obligations. It encourages transparency and assists consumers to make informed decisions upon making purchases, as dealers will be required to provide clear, written notice to the consumer identifying a defect, and the consumer will need to acknowledge the receipt of this information. I understand that this reflects arrangements in the majority of jurisdictions and is consistent with the duty to repair under the Australian Consumer Law.

We also intend to accommodate new vehicle technologies, with the bill expanding the duty to repair to cover the main battery for hybrid and electric vehicles, with a statutory warranty period specified in the act. This change will support continued interest by South Australians in electric and hybrid vehicles, and it will ensure that access to repair rights is consistent for owners of second-hand vehicles. We have also taken steps to ensure there is a transitional provision included in the amendment bill to cover hybrid and electric vehicle batteries in vehicles purchased either prior to or following commencement. This provision will allow electric and hybrid vehicles that are still under the statutory warranty period to receive the new protections that we are proposing.

It is important to note that the legislation we are proposing today has been subject to consultation with key industry groups, including the Motor Trade Association and the Royal Automobile Association of South Australia, and they have provided strong support.

As I mentioned earlier, through this we have been able to make changes that help to reduce red tape and to streamline purchases. To further aid consumers in making informed decisions, this legislation also makes small changes to the Second-hand Vehicles Compensation Fund. Currently, dealers provide financial contributions to this fund, and it is primarily used to compensate consumers where there is no reasonable way of recovering the money they are owed by a dealer. This bill broadens the use of the fund to include programs relating to education, research or reforms that benefit dealers, salespersons or members of the public.

In regard to red tape, we are making changes to the cooling-off period when buying a vehicle. Currently, consumers have two clear business days to consider the purchase of a second-hand vehicle from a dealer. A consumer may cancel the sales contract by written notification before the end of a cooling-off period, unless they have chosen to waive this right. To waive the right to a two-day cooling-off period, a separate form needs to be signed by the purchaser and a person independent of the sale. This requirement does impose an additional burden on consumers to be able to obtain a witness who will sign the form on what could be considered a tight time line, especially when we take into consideration how busy our lives currently are with work, with school, with caring responsibilities, and so on.

Amendments to the act will now specify that a consumer does not require an independent witness to sign the form waiving the cooling-off period. In these circumstances, the cooling-off period will expire when the form is signed by the consumer.

Finally, we are making changes that will support the privacy of the consumers, which both dealers and consumers will benefit from. It is in regard to the disclosure requirements about previous owners of a vehicle. Currently, when a vehicle is being offered for sale, it must include a public notice with the name and address of the last owner. While this requirement does provide some transparency for purchasers, it does raise some privacy and safety concerns for previous owners and imposes an administrative burden on dealers. The bill does seek to remove that requirement to display the name and address of a previous owner on a notice, and it replaces it with a statement that the details of the last owner of the vehicle are available from the dealer on request.

This bill makes similar amendments in regard to the disclosure of where a vehicle has previously been used, such as a taxi or a hire car. Notices must currently display the name and address of the person from whom the vehicle was previously leased. However, this information can often be quite misleading for consumers as dealers may not have received accurate information from previous owners about the history of the vehicle. As such, the bill seeks to remove the requirement to disclose personal details and it replaces it with a statement that these details are available, again on request. Both these changes to disclosure requirements will also apply to vehicles that are sold at auction.

The legislation before us today seeks to improve transparency. It seeks to empower and support consumers to make informed decisions when purchasing a vehicle as we recognise how big an investment this is for so many. Buying a car is a big deal, and buying a lemon can be the difference between getting to work or not, getting to school or not, accessing essential services or not, and for those reasons I commend the bill to the house.

Mr HUGHES (Giles) (17:22): I rise also to indicate my support for this important amendment to the legislation. When rising to support it, I cannot help but reflect upon the electorate that I represent. This is a bit of a state issue in some ways. When you look at the vehicle fleet in South Australia, the mean age is greater than that in some of the other states like New South Wales. I am not sure if these are the latest figures, but the average or the mean age of the vehicle fleet in South Australia is over 11 years, so a lot of people are driving around in cars that are getting on. Clearly, the second-hand car market is a very important market for a lot of people in this state.

Indeed, before coming here, in the whole of my life I have only ever owned one brand new car. The logic of buying a new car and driving it off the block, where it immediately depreciates in value, was never sensible to me. That might be because I have some Scottish blood and a bit of a frugal take on the world, but to buy a vehicle that you are going to drive off the block and it is going to depreciate straight off does not make much financial sense to me.

Having said that, obviously over the recent year or two there are vehicles that you do buy new and they have appreciated in their value because of supply constraint issues around vehicles, all of which are now produced overseas—the availability of chips and a whole range of other factors. You would have bought a Prado a year or two ago and until recently you could potentially get more for that Prado selling it second-hand than you paid for it new. Hopefully, that situation is going to change.

For my electorate and for a lot of regional electorates, the issue is when you look at the socio-economic profile. I do not include all regional areas within this socio-economic profile; clearly, there are some areas and some people who do incredibly well in regional communities. I guess the classic one in my electorate would be Roxby Downs. Sometimes it is ahead of Burnside and sometimes it is behind Burnside when it comes to income levels generated—mind you, they have to work hard for that—and there are a lot of new cars, a lot of big cars, in Roxby Downs because, like a lot of Australians, we have a propensity to buy four-wheel drives. That does makes a bit of sense out Roxby way.

However, a lot of people are not in the position to buy a new car. They have to buy a car either from a licensed dealer—and there are some protections there but clearly, as this bill illustrates, we can improve those protections, and it is good there is industry support for that—and then we have a lot of people who do private sales. In many instances, it has not been a great history there when it comes to people being looked after and protected.

For a lot of people, the purchase of a vehicle is one of those big purchases, and when you do not have much in the way of financial resources almost invariably you are going to get a second-hand car. I look at some parts of my electorate, like the APY lands—it is always interesting to go up to the APY lands—where there are a number of vehicles on the side of the roads, some of which have been turned into virtual artworks that have been reproduced in books and presented in a particular way.

However, you just wonder, when it comes to a whole range of those cars that were purchased either from businesses or private operators, how many people have been ripped off. Odometer readings are one of those classic areas where you can grossly misrepresent what is going on with a vehicle—and it is getting harder and harder.

A lot of those vehicles used to be driven around in those areas, areas with incredibly poor roads, which also impacted on the life of the second-hand vehicle. It has already been adjusted with an odometer reading, and they are already getting an old car, and then that old car is being subjected to roads that at times you need a four-wheel drive to get around on. That has a real impact.

There are a lot of skills in the APY lands and elsewhere, and once upon a time you used to be able to fix up a car quite easily. If you had a bit of mechanical nous, you could get in there and do all sorts of repairs and keep your car running, but the growing sophistication of the car fleet has a range of consequences. It is not as easy—and it is often impossible, unless you have the IT equipment and a degree and all the rest of it—to fix a car.

Admittedly, those cars have all sorts of safety features, but the consequences of that are that it does add to the cost and if you do have a prang it is going to cost you a lot more to fix up the car. If you look at insurance premiums, their increases are partly a reflection of just how sophisticated cars are now. Once upon a time, you could replace a windscreen quite simply, you could replace all sorts of bits, but to do it now is very expensive, given all the locked-in sensors and all the processes that people have to go through. So there are already some real costs imposed on people, and that is getting more onerous—and it will get more onerous—over time. So we can do stuff hopefully to improve the quality of the cars people are getting.

When it comes to adjusting odometer readings, that is something that has happened over the years, I would like to say more with some of the privateers than the businesses, but it has clearly happened across the field. This amendment and the very significant increases in the penalties should be warmly welcomed by all of us. I have not heard the speeches apart from one, and that was very comprehensive so I do not want to repeat it, but I would assume that this bill has strong bipartisan support because we need to go in that direction.

It has clearly been shown that people who do the wrong thing are people who are dodgy, and the fines that have been imposed essentially are a slap on the wrist. You have a far greater chance of making more money through the sale of those cars than the fines you have had to date. It is welcome to see that very significant increase when it comes to fines.

The other element of this is ensuring. It is the same with a lot of legislative approaches: we can amend bills, we can improve them, we can increase penalties, but at the end of the day we also need to ensure that compliance will be there, that there will be sufficient scrutiny. This is an important piece of legislation, and it will over time lead to an improvement. To those of us who are regional members—and we know that probably on a per capita basis there are more second-hand cars in the regions—this will be very welcome. With those few remarks, I seek leave to continue my remarks.

Leave granted; debate adjourned.

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