Should the manufacturer pay for my faulty used car repairs?

QUESTION

Hi John,

Having owned seven Subarus and currently owning three, to say I'm unimpressed with Subaru is an understatement. 

We bought a 2012 XV with approx 125,000kms on the clock 18 months ago. We bought it from a Subaru dealer and it had been serviced by a Subaru dealer. We continued its service with Subaru.

From the outset it had "noise" which at first I put down to tyres. As it got worse we were advised to change out a wheel bearing hub (a common issue on some Subaru vehicles). Over the next twelve months we also replaced both front drive shafts and still the noise persisted.

After spending another $400 plus to replace another wheel bearing we are told the noise is the CVT. Had we known this up front it would have been fixed under used car warranty. I have now become aware that Subaru in the USA has had to increase warranty on these early CVT transmissions to 10 years or 100,000 miles.

Inchcape [the importer of Subaru in Australia] was approached on our behalf by our dealer as a ‘goodwill’ case to repair the CVT, their response is they will access the CVT if we pay $2000 with no guarantee they will then do anything. Our dealer has suggested a second-hand transmission for $4800 or a rebuild at $7000. The problem is a suspected slipping variator bearing.

We have driven Subaru vehicles for 20 years and if this is how they treat loyal customers I would hate to be a first time brand buyer. I am disgusted that the CVT transmissions in these vehicles are a known problem and Inchcape will do little if nothing. 

We will be lodging a complaint with the ACCC as we feel that even though it may not help us, if enough people complain, Inchcape will be forced to look after their lemons.

Yours sincerely,

Rod

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ANSWER

Rod,

Mate, this is hardly as if you bought a brand-new Subaru and it croaked, and they’re not helping. They’re not even leaving you out in the cold, as I understand your position.

This is an eight-year-old, fairly cheap Subaru with (by now) 150,000km (or thereabouts) on the clock. That’s more than four laps of the planet. It’s important to have a sense of perspective on this.

Regardless of servicing, and the unknown way the vehicle has been driven prior to your ownership, it is not unreasonable (for anybody; including yourself, a mechanic, a dealer or Subaru) to expect some form of major repairs to be required at this point in the vehicle’s life. It’s just not. Vehicles wear out - it’s the second law of thermodynamics, from which there is no escape…

I think they’re actually being quite reasonable to offer you a remedy that means they might foot some of the bill - depending on their findings. (There are brands that would tell you where to go from the outset and brush you off - Subaru isn’t doing that.) Bear in mind, if the problem appears to stem from abuse, they are not required to assist, even if it was the previous owner who did the abusing. So basically, it could be a product of the previous owner driving harshly or towing a lot - whatever.

DUE DILIGENCE

I further respectfully suggest that you bought a car with a ‘noise’ which you erroneously attributed to ‘tyres’. There is a serious ‘buyer beware’ element to purchasing used cars. Did it not occur to you to get an independent expert to investigate this noise? Because you are now directly impacted, in part, by a failure of due diligence on your part, I would humbly suggest. Never buy a used car without taking independent expert advice as to its condition.

CONSUMER LAW & OWNER ABUSE

You have to be fair and consider this situation from Subaru’s perspective: they don’t know if it was your abuse or the previous owner’s abuse which could have caused the problem, and the car is outside of its factory warranty period, and it’s done a fairly large amount of kays. They also don’t know, without diagnosis, what the cause is (nor who induced it). But they are still giving you some benefit of doubt, by offering to help, without brushing you off at the outset.

LEMON-SCENTED?

I know this is not what you want to hear, but XV is not in my experience a lemon, as you allege. You appear to have purchased one with an apparent problem, erroneously diagnosed, which 18 months down the track is presenting you with a substantial repair bill, and I am not entirely sure this is Inchcape’s problem, although they appear to be offering to meet you part way to a jointly funded solution depending on what their investigation into the problem uncovers. Not all brands do this, let me tell you >>.

Consumer Law in Australia says carmakers have to support the product - regardless of warranty status - by offering you free repairs if a failure or problem occurs unreasonably early. I’m really not sure eight years and 150,000km qualifies as ‘unreasonably’ early for a problem to occur. (Continued below…)

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REASONABLE DURABILITY

(Continued…) If push came to shove in court they could easily say an eight-year-old car with 150k on the clock together with an offer to jointly fund a remedy (subject to their internal technical investigation of the problem) is beyond merely reasonable on their part. You would thus look like the unreasonable party, and a consumer tribunal may well find against you. Even if you were to win, in this arena, each party typically bears its own costs - which are likely to be more than the $2000 fee Inchcape is proposing to investigate the transmission for you.

Legislation requires products to be reasonably durable, but (perversely) “reasonable” is not defined in the legislation. It’s determined by a court on a case-by-case basis. (This is because the legislation covers everything from paperclips to cars, and durability expectations vary widely across the breadth of consumer products and services.)

BEING A LOYAL CUSTOMER

Finally I would say that although categorising yourself as a ‘loyal’ Subaru customer is technically true, if you are buying your cars at six-ish years of age, you’re not really a Subaru customer in the sense that Subaru sells only new Subarus (as opposed to used Subarus). This is a big distinction in the eyes of all carmakers - because used car sales do not contribute to their bottom lines. If you have bought them all used from the same dealer, then in that sense you are a loyal customer of the dealership, and it sounds as if they have gone to bat for you with Inchcape, as you would hope they would.

Don’t mistake this for me being cosy with Subaru/Inchcape either, because I’ve called them out on things before, and I love nothing more than roasting a carmaker when they treat consumers like shit (it’s my brand). Take Nissan, Mercedes-Benz, Volkswagen and Audi, Land Rover, Holden and Ford, for countless examples.

I’m in the ‘facts’ business, rather than the ‘appeasement’ business, obviously. Look, if I thought your issue had merit I’d refer it to Inchcape for assessment, but they appear to be being reasonable about it in the absence of my intervention.

ACCC & CONSUMER COURT

Finally, on complaining to the ACCC: it is entirely your right to do this if you feel it is justified. However, bear in mind that the ACCC does not act for individuals. This means that they may investigate Inchcape’s conduct and foreseeably impose a penalty if the company has breached the legislation - but the ACCC will not pursue a remedy for you. (It’s just not the ACCC’s function to do this.)

If you were to pursue a remedy under Consumer Law you would most probably need to proceed against the dealer in court. (Inchcape would probably be named as the second respondent in your case.) If I were you I would not begin this process without taking independent legal advice, because it’s costly and time-consuming, and there’s no guarantee of winning.

My advice here would be: Roll the dice with the $2000. See if they subsequently offer to assist you in any way. If they do - embrace the offer, because a car with a dead transmission is just roadside furniture. And, in future, whenever you buy a used car - from a dealer or not - get any untoward operating characteristic (noise, vibration, etc.) professionally and independently diagnosed before committing to the purchase.

Sincerely,

JC

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