What to do when your new second-hand car turns out to be a ‘lemon’

“I bought a second-hand car from a dealership about three months ago. The last week I’ve noticed that the engine sounds terrible. I asked a mechanic to have a look at it and according to him the engine is shot and needs a complete overhaul, which will be very expensive. The dealer said nothing about the engine being in such bad shape. But it is a second-hand car, so I’m not sure if I can return it or have the dealer fix it properly?”

Having bought the car from a second-hand dealer, means that the Consumer Protection Act of 2008 (“CPA”) will apply to your transaction. Importantly, a second-hand car falls within the definition of ‘goods’ in the CPA and is thus also subject to the CPA protection against defective goods, because excluding second-hand goods from the ambit of the CPA would exclude protection for consumers who need it most.

The CPA provides an automatic warranty that all goods purchased comply with the following requirements in terms of the CPA:

safe, of good quality, in good working order and free from any defects;
reasonably suitable for the purpose for which they are generally intended;  and
will be usable and durable for a reasonable period of time, having regard to the use they would normally be put to.

Should purchased goods fail to meet the requirements as set out above within six months after the purchase or delivery of such goods you have the right to return them, and insist on one of the following three remedies:

Have the goods repaired; or
Have the goods replaced; or 
Obtain a full refund of the purchase price.

In general, if a consumer prefers to have the defective goods replaced or to have the purchase price thereof refunded, the supplier must comply and cannot force the consumer to have the goods repaired instead. The supplier is also liable for the costs of repairing, collecting and/or replacing the defective goods. It is important to remember that the defect of the goods must be a material imperfection to qualify for one of the three remedies. The CPA will also apply regardless of the suppliers’ refund policy, unless the refund policy is more favourable towards the consumer.

In the case of second hand goods, there are exeptions to the rules regarding refunds in that they do not apply if the consumer was specifically informed of the specific defects of the particular item and the consumer still agreed to purchase the item in that condition or the goods were altered contrary to the instructions, or after leaving the control, of the dealership.

In your case, it is realistic to accept that the standard and condition of a new car will differ from that of a second hand car and that it’s not always possible for a second-hand car dealer to point out the exact wear and tear of the car. That said, a second hand dealer should be in a position, due to the nature of his business, to be able to point out known defects as well as bigger and obvious defects. Should any defects, other than those listed and accepted by the consumer, occur within six months after the delivery of any such goods,, you will have the right to insist on one of the three remedies listed above. 

In your situation, if the condition of the engine was not disclosed, it can be argued that the need for you to have to overhaul the entire engine is material and should afford you the protection and remedies provided by the CPA. The assistance of an attorney can be helpful to assist you to motivate your claim under the CPA against the car dealership.

August 11, 2016
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