Commissioner's Blog: Doubts about the value of car sale add-ons
All announcements issued prior to 1 July 2017 were issued by the former Department of Commerce. Announcements listed here are the latest versions available, but may be subject to review. For more information on this announcement, please contact firstname.lastname@example.org.
With Acting Consumer Protection Commissioner David Hillyard
If you’re buying a car any time soon we have a message we’d like to drive home. Consumer Protection has concerns about the value of add-ons being sold to people purchasing motor vehicles in Western Australia.
There’s been a recent increase in complaints to Consumer Protection about the vehicle ‘extras’ sold at the point of sale such as extended warranties, rust proofing, paint and fabric protection, and window tinting. Costs may be rolled into a finance deal, which can be very costly in the long run when you are paying interest on the total amount owing.
Before saying ‘yes’ to after sales products, make yourself aware of the general market price for the items offered. If you do not shop around, how do you know it’s a good price or value for money? You might also ask yourself why the manufacturer is not providing certain after sales products with their vehicle. In most cases the simple answer is that the manufacturer does not believe the vehicle requires these additional products. In our experience consumers often sign up to buy things that will only add cost, will not increase the value of the car and may not deliver what they think it might.
It is important to remember you do not have to purchase things such as window tint, seat fabric protection, body paint protection or rust preventer at the time you buy a vehicle. In some cases we have heard of electronic rust devices still being sold despite these devices being found to have no effect. Aftermarket products can be bought at a later date if you are still keen. However, after driving a car for a little while you may realise you no longer want, or need, particular after sale products and that’s another reason to wait. Another consideration is whether adding certain items that are not recommended by the manufacturer can jeopardise the warranty.
Speaking of warranties, seriously consider the value of an extended warranty being offered. It is likely that the protections are already available to you for free under the Australian Consumer Law (ACL). With new vehicles the normal manufacturer’s warranty combined with ACL cover is usually more than sufficient.
Be mindful that some extended warranties offered for sale have restrictions and conditions you must comply with. For example extended warranties often require specific servicing schedules that must be carried out by an authorised dealership or agent, leaving you without the choice of servicing the vehicle elsewhere for less money.
Car-dealers may offer what appears to be a good finance deal but you should carry out some loan comparisons before settling. We also recommend that you get multiple quotes before accepting any insurance offered. A recent Australian Securities and Investments Commission (www.asic.gov.au) review found the insurance add-on marketplace is failing consumers; with premiums paid and commission for car dealers well in excess of the pay-outs for policy holders. Car-buyers need to resist high pressure tactics and say NO to expensive, poor value, complex insurance policies in relation to their credit or policies to cover items such as tyres and rims.
Tips for car-buyers:
- question the value of the add-ons offered and consider if they are really needed;
- remember that “extras” added to the original price of the vehicle add to the financing costs and stamp duty paid on the total cost;
- shop around for the best interest rate for car loans; and
- think twice about any insurance policy offered, read the fine print and get other quotes.
General information about buying cars is available on the Consumer Protection website www.commerce.wa.gov.au/motorvehicles and enquiries can be made by email email@example.com or by calling 1300 30 40 54.
Share this page: