Buying a car is a big decision as it is the second biggest purchase you make after your house and therefore it is important to know what your consumer rights are in this case and how the Consumer Protection Act (CPA) protects these rights.
Consumers who have car complaints can complain to the Motor Industry Ombudsman (MIOSA) – the only accredited dispute resolution forum for the South African automotive and related industries and their customers – after they are unable to sort the matter out with the relevant dealer.
The MIOSA considers complaints using the provisions of the CPA. The service is free of charge to the consumer, with the exception of onsite technical inspections, if required.
Have a look at some of the cases the MIOSA reported in its newsletters to see how the CPA is used to protect consumer rights.
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When a used car cannot be repaired
A consumer complained that the used car he bought that had to be repaired three times within the first six months after purchase. He wanted the sales agreement to be cancelled or another car.
Handling this complaint, the MIOSA considered the provisions of section 55 (2) of the CPA, which states that every consumer has a right to receive goods that are reasonably suitable for the purposes for which they are generally intended, of good quality, in good working order and free of any defects, that will be useable and durable for a reasonable period of time, having regard for what they will usually be used for.
In terms of Section 56 (2) of the CPA the consumer can return goods within six months after delivery, without penalty and at the supplier’s risk and expense if the goods fail to satisfy the requirements and standards contemplated in Section 55.
The consumer can choose if the supplier must repair or replace the failed, unsafe, or defective goods or refund the price the consumer paid for the goods.
Subsection 3 of the same section states that if a supplier repairs any goods or any component of any such goods and within three months after that repair, the failure, defect or unsafe feature has not been remedied, or a further failure, defect or unsafe feature is discovered, the supplier must replace the goods or refund the consumer.
However, when a sales transaction is cancelled, a supplier is entitled to charge a consumer for using the goods and any damage that happened during the time it was in the consumer’s possession. The MIOSA recommended that unless a suitable similar replacement car could be found timeously, the sales transaction should be cancelled and the consumer refunded, less the applicable cost of usage during the time he used the car.
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Car dealer cannot contract out of CPA
After a consumer bought a used car from a dealership, its gearbox started to fail two weeks later and the consumer informed the dealership. However, the dealership did not want to help, as the sales agreement included a clause stating that it would not guarantee the vehicle at all and the consumer agreed.
When the MIOSA investigated, it found that the dealership did not comply with the requirements of sections 49 and 55 (6) of the CPA by limiting its responsibility regarding the car’s gearbox and that section 56 of the CPA would still apply.
This means that the dealership infringed on the consumer’s rights in terms of sections 48 and 51 of the CPA, by limiting the recourse the consumer might have in terms of the Act. The MIOSA directed the dealership to assess and repair or replace the gearbox at no cost to the consumer.
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No police clearance, no sale
A consumer who bought a truck from a dealership returned it and asked that the sales agreement be cancelled.
However, the dealership returned gave it back to the consumers, saying that the concerns raised were resolved, but then the consumer became aware that the truck could not be legally registered as there was a clearance discrepancy. This was the last straw for the consumer and he again asked for the sales agreement to be cancelled.
The MIOSA said the provisions of section 55 (2) (d) of the CPA, which relates to a consumer’s right to receive goods that comply with any applicable standards set under the Standards Act or any other public regulation applies in this case.
The dealership explained that the clearance discrepancy was due to the vehicle’s engine being replaced a few years before, but was unable to get a police clearance certificate for the current engine. Therefore, the truck could not be used legally on the road and the MIOSA found in the consumer’s favour to have the sales agreement cancelled.
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When the implied warranty does not apply
When a used car he bought broke down a day later, a consumer had a repairer of his own choice repair the fuel gauge and alternator wiring, without letting the dealership know.
He then wanted the dealership to refund him for the repair costs, cancel the sales transaction refund the deposit he paid for the car.
This time the MIOSA advised that, although the concerns arose within the implied six months warranty provision of section 56 (2), the implied warranty was rendered void when the consumer chose to have the car altered contrary to the instructions. He should have gone back to the dealer to fix the car.
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Dealer obligations are non-negotiable
The MIOSA also said recently that it has become aware of a growing popular trend where new vehicles are sold with general terms and conditions that list components of vehicles the dealer claims carry no warranty.
These clauses refer to the suppliers’ obligations in terms of section 55 (6) by generalising the conditions of used vehicles sold and declaring that the vehicles sold carry no warranty.
The MIOSA says it follows the ruling of the National Consumer Tribunal where it found that “although compliance with section 55 (6) can allow for the standard of goods to be of a lower quality, it can never be equated with an exclusion of implied warranty in Section 56.
“Even if the standard of quality of the goods is lowered in terms of section 55 (6), the implied warranty of quality will continue to apply to those goods in that condition. Thus, despite the applicant having been expressly informed of the condition of the vehicle, the respondent would still have been bound by Section 56 of the Act.”
The ruling also stated, “… that section 55 (6) is not an endorsement of the voetstoots (selling goods “as is”) clauses that were prevalent to these types of agreements prior to the promulgation of the Act and that any attempt to exclude liability when transacting, goes against the letter and spirit of the Act.
“Contracting parties will not be able to lower the quality or standard, unless the actual detail of the poor quality of goods is stipulated and the implications of the lack of safety or poor-quality goods are detailed in the agreement.”
The MIOSA says according to this judgement, attempting to exclude the implied warranty in terms of the CPA amounted to prohibited conduct. Even more important is the way this was done and the contents of the term expressing this as it resulted in the supplier also being guilty of unconscionable conduct as described in section 40 and making false, misleading and deceptive representations according to section 41 of the CPA.