Buying a new car is a significant purchase for a consumer. The purchase of a car and its ongoing maintenance account for around five per cent of total average household expenditure annually, typically making it second only to housing expenditure in importance. Well-informed consumers and competitive new car retailing markets are therefore likely to deliver considerable benefits.
Market studies are used by the Australian Competition and Consumer Commission (ACCC) to help promote effective competition in markets. Studies are normally undertaken where a number of concerns about market conduct have been raised, and a detailed examination of market characteristics could help to determine whether market intervention, including new policy proposals, regulatory solutions or enforcement action is warranted.
The ACCC’s market study into the new car retailing industry is in response to a number of concerns raised with the ACCC and other fair trading agencies about how new car retail markets are operating. The issues raised include those complaints received by the ACCC and other Australian Consumer Law (ACL) agencies about defects with vehicles, misrepresentations to consumers, and issues in post-sale service markets.
This draft report considers these and other issues raised with the ACCC through the course of this study. It details the ACCC’s findings from almost 12 months of investigation, consultation and research. It contains a number of key findings and recommendations for improving consumer protection and promoting competition in new car retailing and associated markets.