Statutory Warranty on "Auctioned" cars.

[Crazy Dazz]

As those in the West would know, when a licensed dealer sells a car, there is a statutory warranty (usually 3 months) on qualifying cars. It’s actually pretty good in that it covers all major mechanicals that affect roadworthiness. Whilst it doesn’t cover brakes & tyres for the 3 months, they are required to be roadworthy when sold.

XXX is a major vehicle auction house in Perth. They ARE a licensed dealer. They offer most of their cars via auction, although many have a “buy now” price or are only offered on that basis.
In my case, my high bid was referred to the vendor, who then came back with a slightly higher price (that I'm happy with.)

The vehicle is a passenger vehicle (a repo) that would qualify for the warranty. The advertisement specifically states that they are a licensed dealer, and the vehicle was displayed with a “dealer slip.”

However XXX have now told me that there is no statutory warranty “because the cars came from a finance company.” Does anybody know if this is legit?

Don’t get me wrong, I can understand their point of view. They sell vehicles at auction at what are often not predetermined prices. They keep their fee and pass the money back to the previous owner. They don’t want to be involved in withholding amounts for warranty, etc.

BUT, I don’t understand how this is not a gigantic loophole? There are several smaller dealers around town that conduct “auctions.” The cars are available for sale at any time, and if not sold go in the weekly auction. If they don’t meet reserve, they go back on the lot for sale. So can they avoid providing the warranty? If so, why haven’t all the dodgy dealers cottoned on to this trick?

IF they legally don’t have to provide the warranty, then I am highly suspicious that the whole auction was a giant rort. There were over 200 cars for sale, and of those only a small fraction were actually knocked down (maybe 30 TOPS.) The overwhelming majority were, like mine, “referred.” So there you have a case of the best offer being presented to the vendor, the vendor nominating a price which the purchaser can accept or walk away. Not sure how that differs from an ordinary sale?

[FGII-XR6]

I know that in NSW auction houses are exempt

[Road_Warrior]

Maybe ring DoCEP and ask them, the Motor Vehicle Dealers Unit or whatever it is they are called, they are there because I applied for a job there once :p

[xisled]

It is due to them not owning the car, they are selling it on behalf of a third party.

[Crazy Dazz]

Originally Posted by xisled

It is due to them not owning the car, they are selling it on behalf of a third party.

The cars are registered,
and no RWC in WA.
If selling on consignment exempts them, why doesn't every dodgy dealer do that?
Waiting to hear back from DoC.

[Yellow_Festiva]

I got a car for a fixed price from a joint that I think is also an auction place and got stat warranty in NSW. Mob out at Smithfield if memory serves.

Is a car that's sold with a fixed price via private negotiations considered "auctioned"?

[devilcv8]

In NSW,,,, If the auction house sells at a fixed price prior to auction, then the vehicle is covered by a stat warranty. Via auction there is no stat warranty.
The question is, if passed in and then negotiated price after auction what the status is. It has nothing to do with who they are selling on behalf of.

[PG2]

Just quickly googled this from here;

http://rac.com.au/Motoring/Motoring-...ibilities.aspx

It states;

Purchase at auction
You will need to be aware of who owns the vehicle as this determines the statutory warranty provisions.

If the owner is a dealer, a car hire or leasing business, or a finance company the statutory warranty provisions will apply, and auctioneer dealer will be required to honour any warranty claim.

The terms are the same as a vehicle purchased directly from a used car dealer and the there will be no warranty if the vehicle is more than 12 years old; has travelled more than 180000kms or has a purchase price of less than $4000.

If the auctioneer is auctioning the vehicle on behalf of a private owner there will not be any warranty. If you negotiate a direct sale with the auctioneer rather than at the auction, then the statutory warranty provisions will apply.

There are some exceptions.

Hope this helps.

[Crazy Dazz]

Originally Posted by PG2

Just quickly googled this from here;

http://rac.com.au/Motoring/Motoring-...ibilities.aspx

It states;

Purchase at auction
You will need to be aware of who owns the vehicle as this determines the statutory warranty provisions.

If the owner is a dealer, a car hire or leasing business, or a finance company the statutory warranty provisions will apply, and auctioneer dealer will be required to honour any warranty claim.

The terms are the same as a vehicle purchased directly from a used car dealer and the there will be no warranty if the vehicle is more than 12 years old; has travelled more than 180000kms or has a purchase price of less than $4000.

If the auctioneer is auctioning the vehicle on behalf of a private owner there will not be any warranty. If you negotiate a direct sale with the auctioneer rather than at the auction, then the statutory warranty provisions will apply.

There are some exceptions.

Hope this helps.

Unfortunately that directly contradicts what I have just received back from the government.

Thank you for your enquiry.
If the vehicle is being sold on behalf of a finance company there will be no statutory warranty applicable.

At an auction a statutory warranty is only applicable if it is being sold for a licenced dealer or if it was owned by Pickles and part of their floor stock.

I hope this has been of assistance.

Yours sincerely

Principal Customer Service Officer
Automotive, Marine & Trading Hours
A: 4/321 Selby Street, OSBORNE PARK WA 6017
P: Locked Bag 14, Cloisters Square, PERTH 6850
Web: www.commerce.wa.gov.au

[xxx000]

the situation doesn't sound dodgy to me

lots of cars get referred at auction and many then sell when the vendor (owner) accepts the close offer. watch an auction and you'll see the process with what is effectively the highest offer being considered and if accepted and while later the auctioneer stops proceedings, mentions the lot and brings down the hammer as sold

[xxx000]

Pickles don't own the cars, they are selling them for others: govt, fleet, finance companies etc

If they actually owned the cars and had them in their name then they would have to provide the warranty, if applicable, but in 99.999% of cases they don't own the cars they sell.
They are a licenced auction house and a third party intermediary

[Jastel]

You should still have FACTORY warranty of 3 years 100000kms...I assume you bought a Ford???

Whatever brand car is still covered by factory warranty. Most dealers tell you to go there anyway and it ends up in an arguement.

Another thing at auctions is you buy "as is", unless it was sold roadworthy and wasnt actually roadworthy then you may have a case.

[Crazy Dazz]

Originally Posted by xxx000

the situation doesn't sound dodgy to me

lots of cars get referred at auction and many then sell when the vendor (owner) accepts the close offer. watch an auction and you'll see the process with what is effectively the highest offer being considered and if accepted and while later the auctioneer stops proceedings, mentions the lot and brings down the hammer as sold

err, no. Read my post. The overwhelming majority of cars were not sold. In fact mostly the only cars sold were the junkers. Any vehicles sold are then done so by private negotiation over the next 2+ days. Whether by accident or design, the “auction” serves only to get people interested.

Originally Posted by xxx000

Pickles don't own the cars, they are selling them for others: govt, fleet, finance companies etc

. Pickles are a licensed dealer, they MUST give a statutory warranty if the car is owned by a Finance Company. However since the cars are repo’s they are claiming that the car is in fact “owned” by the previous (private) owner. if they can use this loophole to avoid providing a warranty, what’s stopping all the other dodgy dealers doing the same?
Not sure how it works elsewhere, but In WA the vehicles are never “owned” by the dealer. They remain in the name of the previous owner until onsold and transferred to the new buy, and generally they are funded by a Finance company facility.

Originally Posted by Jastel

You should still have FACTORY warranty of 3 years 100000kms...I assume you bought a Ford???

Yes, looking at a Ford. No, 2007 model is out of warranty.

Originally Posted by Jastel

Another thing at auctions is you buy "as is", unless it was sold roadworthy and wasn’t actually roadworthy then you may have a case.

Actually no. DESPITE what they try and tell you, auction houses are still covered by the terms of the TPA. ANYTHING they sell must be fit for purpose. (That’s why they are generally very good at pointing out known problems, so that if you buy a car with a stuffed engine they would argue that you bought only the car, and for the purpose of replacing the engine, ie “fit for purpose.”) Furthermore, again despite what they claim, a disclaimer is NO defence.

[Morexbs]

If auction houses were required to provide a warranty do you really think there would be any auction houses operating?
They would have to charge prohibitively high selling fees and buyer's premiums to cover any warranty claims and they would be out of business pretty quickly if that was the case.The car auction industry is full of "loopholes".You can either take a chance at an auction and save some $ or you can buy from a dealer and pay for a warranty which you may never need or which will not cover anything that is actually going to fail.You can't have it both ways.
FYI,Pickles are a trading auctioneer,which means that they do own some of the vehicles they sell.A consignment only auction house,such as Manheim,does not own any of it's stock.

[flappist]

Ok enough.......

AFF Law Society is now in recess.

CLOSED