In the last financial year, inspectors from South Australia’s consumer watchdog, Consumer and Business Services, inspected nearly 170 licensed used car dealers operating from home and in car yards.
While the majority of car yards were doing the right thing, some concerning trends emerged.
We have investigated a number of licensed dealers selling from home under the guise of being a private seller to avoid their legal obligations such as providing a statutory warranty, failing to disclose whether a car was a repairable write off and not disclosing that they are a licensed dealer.
Second-hand vehicle dealers must have a licence if they buy, sell or offer for sale four or more vehicles in 12 months.
As a result of proactive monitoring, CBS also identified a significant number of unlicensed dealers selling from home via sites such as Facebook Marketplace.
These operators try to deceive consumers by winding back odometers or faking logbooks to make it seem like the car has travelled fewer kilometres to maximise their profits.
Over the last financial year, six individuals have been convicted of tampering with odometers, getting slugged a total of more than $35,000 in fines and compensation orders. In addition, one of the six was also handed a suspended jail sentence for falsifying logbook records. Of those prosecuted, four were unlicensed. Two were licensed dealers caught winding back odometers.
Commissioner for Consumer and Business Affairs, Dini Soulio, says, "If you're buying from a licensed dealer, consumers have certain rights and protections. A licensed dealer must disclose when a vehicle is a repairable write-off and must provide a written contract outlining the terms of the sale including any statutory warranties applicable to the vehicle."
"Some licensed dealers who operate from home have been trying to avoid adhering to the conditions of their license. This is wrong – if they have a licence, they have to live up to the terms of that licence, regardless of where they’re selling. Failure to abide by these requirements gives them an unfair advantage over those operators who do the right thing," says Mr Soulio.
When buying privately, it's advisable to excercise caution. Get the car inspected, check the odometer reading to see if the wear and tear on the car is consistent with the car's supposed usage and visit the Personal Properties Securities Register to check that money isn't still owed on the car.
Over the coming year Consumer and Business Services will be targeting inspections at licensed dealers operating from home and continuing to monitor for shonky unlicensed sellers to stamp out those backyard dealers who do the wrong thing.
The Government has also recently undertaken targeted consultation on the introduction of harsher penalties for unlicensed dealing and odometer tampering including significant increases to fines and longer jail terms. The results of this are now being considered.
If you have any concerns about a vehicle dealer - licensed or unlicensed – contact Consumer and Business Services for advice and support on 131 882.
