Hi there. The law provides several warranties with respect to defective vehicles. A vehicle will be defective if, when sold, it is not of acceptable quality. ‘Acceptable quality’ means the vehicle is safe and lasting, it looks acceptable, and it does all the things someone would normally expect the vehicle to do. The type of vehicle and how much it cost are also relevant to determining whether it is of acceptable quality. A vehicle will also be defective if it is not fit for the purpose for which you purchased it (i.e. to drive), or if it fails to meet any extra promises made by the seller about performance, condition or quality.

In your situation, the significant oil leak is likely to mean the vehicle was not of acceptable quality at the time of sale, and that it is not fit for driving. This means it is a defective vehicle and is covered by two separate warranties.

The first warranty is a ‘consumer guarantee’ under the national Australian Consumer Law. This guarantee cannot be excluded by a supplier, even if the sale contract tries to exclude it. The guarantee entitles you to have the vehicle repaired or, if the defect is major, replaced or refunded.

The second warranty is a ‘dealer guarantee’ under NSW legislation and can be pursued as an alternative to the consumer guarantee above. Under the dealer guarantee, the dealer must repair or make good, at their own expense, any defective vehicles they sell. This means the vehicle must be repaired so that it is in a reasonable condition having regard to its age. This warranty is subject to a limitation period. For second-hand vehicles under 10 years old with less than 160,000 km on the clock, the warranty must be claimed before 5,000 km or 3 months after the date of purchase, whichever occurs first.

You should contact NSW Fair Trading (www.fairtrading.nsw.gov.au) by calling 13 32 20 to obtain advice on your situation. NSW Fair Trading offers a free dispute resolution service to motor vehicle owners with dealer guarantee or repair disputes. It is a voluntary service that aims to resolve the problem through mutual agreement. If this process is unsuccessful, you have the right to lodge a claim with the NSW Civil and Administrative Tribunal (www.ncat.nsw.gov.au).

Suggested way forward

You should contact NSW Fair Trading for advice. If they are unable to help, you should consider speaking to a lawyer who can advise you of your legal options. By pressing the “Consult a Lawyer” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.