New car warranties and your rights as a consumer

Buying a new car comes with lots of perks — among them increasingly lengthy manufacturers’ warranties, with capped-price servicing and roadside assist coverage sometimes thrown in.

Manufacturers’ warranties are designed to give buyers peace of mind, but despite popular opinion, your car doesn’t have to be serviced at a brand dealership to guarantee coverage — though you may lose your roadside assist.

Australian Automotive Aftermarket Association chief Stuart Charity says there’s ongoing confusion among new car buyers about the difference between manufacturer warranties, extended warranties, and their automatic rights under the Australian Consumer Law — something that’s just been clarified by the Australian Competition and Consumer Commission’s compliance and enforcement priorities for 2026–27, including consumer guarantees in motor vehicle sales.

“Consumers are routinely told, directly or indirectly, that their rights end when a manufacturer’s warranty ends — or that they must return to the dealer for servicing to protect their warranty,” Mr Charity explains.

“That’s simply not how Australian Consumer Law works.”

Under Australian Consumer Law, consumer guarantees are automatic and cannot be excluded or limited by anything stated in a contract, warranty document, or at point of sale.

For motor vehicles, these guarantees apply for an unspecified but reasonable period, and require that a vehicle be of acceptable quality — including being safe, durable, and free from defects; be fit for any disclosed purpose; match its description or demonstration model; and have spare parts and repair facilities reasonably available.

Where a vehicle has a major problem, consumers are entitled to choose a refund or replacement, and in some cases a repair. For non-major problems, consumers may still be entitled to repair or replacement.

“The key point is this: a manufacturer’s warranty is an additional promise — it does not replace consumer guarantees. Consumers should never accept ‘your warranty has expired’ as the end of the story,” Mr Charity says.

The AAAA, which represents independent repairers and manufacturers, emphasises that consumer guarantee rights apply regardless of whether an independent technician services or repairs the vehicle. Motorists are entitled to have their vehicle maintained by a qualified independent repairer while preserving their consumer protections.

AAAA research shows 40 per cent of new car owners believe they must return to the dealer to maintain their warranty; 40 per cent understand they can choose a qualified independent repairer and still rely on consumer protections; and 20 per cent remain unsure.

“In practice, that means up to 60 per cent of new car owners could be making decisions based on confusion or misinformation. That’s a competition issue as much as it is a consumer issue,” Mr Charity says.

The AAAA has encouraged vehicle sellers, manufacturers, and warranty providers to ensure communications are clear and not misleading, particularly where extended warranties include restrictive conditions, such as tied repairer arrangements, that may confuse consumers about rights they already have under consumer guarantees.

Manufacturers that offer extended warranties conditional on dealership servicing are required to lodge an “exclusive dealer notification” with the ACCC. Both Hyundai and Mitsubishi have done this.

What the law says

If a manufacturer’s warranty requires a vehicle to be serviced by a dealer, this may constitute anti-competitive conduct under the Competition and Consumer Act.

Australian Consumer Law warns people about “misleading statements” that they have to service their vehicles at a dealer, or they will void their rights.

In its guide to motor vehicle sales and repairs, the ACCC says consumers are free to choose an independent repairer, though if that repairer causes a defect it is unlikely to be covered by the manufacturer’s warranty.

The guide is explicit about consumer guarantees when it comes to services, namely that the provider guarantees:

+ Services will be reasonably fit for any purpose specified by the consumer.

+ Any products resulting from the services are also fit for that purpose.

+ Services and any resulting products are of a standard expected to achieve any desired results the consumer told the provider about.

A warranty does not change a dealer’s responsibilities under the ACL.

Notably, a dealer cannot refuse to fix a major failure of a vehicle that makes it undriveable just because the problem occurs one month after a three-year warranty or distance warranty expires. If it’s a manufacturing defect, the consumer has the right under the ACL to ask for a repair, refund or replacement regardless of whether the warranty has expired.