To err is human, a lemon law will be divine

 

A few weeks ago, an unlucky lady made the news after driving home her new car from the showroom in the morning and suffering a breakdown in the afternoon, resulting in the car being returned to the dealer.

The car stayed in the workshop for two months and the dealer even told her to take another loan and buy a replacement car.

Eventually, the car maker offered to repurchase the car and reimburse her hire-purchase installments.

The case brings up the perennial question of legal redress and safeguards for purchasers of brand-new vehicles which are found to be defective.

Although state-of-the-art robots efficiently roll out vehicles in assembly plants today, there is still some human element involved.

In the motor industry, there is recognition that “lemons” exist, these being cars that have been improperly put together by the company’s employees, who were either in a bad mood on Monday or were rushing to wrap up work on Friday before the weekend or just having a bad-hair day.

Such cars will eventually land in the hands of unlucky buyers unless the defect is identified and resolved at the manufacturing or pre-delivery inspection stages.

Many car owners are clueless when a major problem or defect arises with a new car purchase, as Malaysia has yet to have a law on defective vehicles.

What is a lemon law?

It will offer a vehicle buyer legal relief like repair, replacement, or even a refund for defects detected during a specified period after purchase of a vehicle.

Such laws have been implemented and enforced effectively in North America, parts of Europe and in Singapore.

In essence, if a buyer alleges or claims that his or her new vehicle is defective, the burden to prove that the vehicle is not defective lies on the vehicle manufacturer or its authorised representatives.

However, lacking such a law in Malaysia, the car owner who claims the vehicle is defective would have to eventually embark on a “David versus Goliath” type of battle with the manufacturer.

Many owners end up losing interest as they don’t have the resources to mount a challenge against the manufacturer.

However, there are relevant laws which protect vehicle owners, such as the Hire Purchase Act 1967, Sale of Goods Act 1967 and Consumer Protection Act 1999, which are applicable in defective vehicle cases.

Taken together, they ensure the protection of the hirer, consumer or buyer by imposing implied conditions on warranties and guarantees as to title, quality, sample, description, repairs, spare parts, and defects.

Most new vehicles sold in Malaysia are financed under a hire-purchase agreement, with the bank as the beneficial owner and the buyer as the legal owner.

Andrew Suresh, a lawyer who specialises in automotive law, says consumers have a right to reject a new vehicle based on certain conditions, for example if it does not fit its purpose, or it is not of merchantable quality.

However, a defect or issue which can be rectified successfully by the dealer does not entitle the buyer to reject the vehicle.

It must be a major defect – usually one which arises from technical faults, for example issues with the electronics or information technology, or some serious mechanical issues which makes the vehicle undrivable despite all rectification works by the manufacturer or dealer’s authorised service centre within a reasonable period.

The case of the unlucky lady, where the car maker later informed her that her vehicle broke down as a result of sugar in the engine, is a clear example where the problem, whether it was technical or human, was not rectified even after a period of two months.

This caused inconvenience to the vehicle buyer who had no car to use but had to service her monthly hire-purchase payments during the time which the vehicle was in the service centre.

Every consumer has the right to reject the vehicle or goods under the Consumer Protection Act but this right must be exercised within a reasonable time from the delivery of the vehicle..

Likewise, the manufacturer or dealer too must also rectify the defect within reasonable time in accordance with warranties and guarantees accorded to the buyer.

If the manufacturer or dealer fails to deal with the defects swiftly after taking into account the period of investigation and repair, the vehicle owner is entitled to terminate the hire-purchase agreement under the Hire Purchase Act by surrendering the vehicle to the financial institution or at any place agreed upon by parties.

It becomes the obligation of the financial institution to deal directly with the manufacturer or dealer to recover monies paid.

In the meantime, the buyer is advised not to terminate the vehicle’s insurance policy because he or she is still the legal and registered owner of the vehicle and should wait until the matter is resolved between the financial institution and vehicle manufacturer or dealer.

The buyer should then demand or file a claim for the deposit paid to the dealer and for losses incurred during the period for which they were deprived of ownership or use of the brand-new vehicle.

Many buyers are usually ill advised or convinced that seeking a remedy for a defective vehicle is an uphill task but some fail to realise that we still have adequate laws to deal with the issue.

However, navigating the legal process could be a nightmare for a lay person and this is exactly why we need one piece of legislation like the lemon law to make it easier for the aggrieved consumer.

The relevant ministries should live up to the government’s credo about putting the rakyat first and not delay this any further. - FMT

The writer can be reached on Facebook at facebook.com/yaminvong.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.