Advertising obligations for motor dealers

Advertising

If you publish advertisements for motor vehicles on sale, you have certain obligations under Australian Consumer Law. This applies to both print and online advertising of new, second-hand and demonstrator vehicles.

Advertising charges

Advertisements must specify the dealer or statutory charges. Statutory charges include:

• any tax or fee payable on registration or renewal of registration
• any premium or duty for insurance issued under the Motor Accidents Compensation Act 1999.

Dealer charges refer to amounts other than the purchase price or statutory charges that are payable to the dealer before the delivery of the vehicle.

Advertisements must not use the expression ‘on-road costs’ or any other similar expression to describe statutory charges.

You can be prosecuted up to $2,200 if you fail to follow these requirements.

Price related advertising

The advertised price is an important factor in advertising and should not be misleading or deceptive.

Advertisements must specify the cash price of the vehicle when:

• the advertisement specifies or implies that the price of a second-hand or demonstrator vehicle has been reduced, or
• a reduction is related to the manufacturer’s recommended retail price.

Advertising an odometer reading

If an odometer reading is listed on an advertisement, it must be correct.

Advertising damaged vehicles

Where damaged vehicles are offered for sale, advertisements must include a disclosure statement saying that the vehicle has been damaged and whether or not the damage has been repaired (other than a second-hand motor vehicle). This message must be in writing, the same size and prominent.

You can be prosecuted and fined up to $2,200 if you fail to follow this requirement.

False and misleading advertisements

Under Australian Consumer Law, you must not engage in misleading or deceptive conduct, or engage in conduct that is likely to mislead or deceive.

Advertisements should not make statements or representations that are not true or are likely to mislead or deceive. For example:

• when the term ‘drive-away’ (or similar) is being used, the consumer should not expect to pay any more than the advertised price, and
• statements and/or pictures in advertisements should not mislead consumers as to the type or quality of the vehicle being offered.

If you break the law, you could receive a penalty of up to $500,000 as an individual. Corporations could be penalised $10,000,000, 10% of the annual turnover, or 3 times the value of the benefit gained by committing the offence – whichever is greater.

Advertising checklist

NSW Fair Trading requires motor dealer advertisements to include the:

• registration number of second-hand vehicles or entry/stock number if unregistered (where a price is specified)
• dollar amount of dealer charges for new cars
• statement that government and statutory charges apply (if not included in the price) for new cars.

You can be prosecuted and fined up to $2,200 if you fail to follow this requirement.

Suspicious goods

If you suspect goods have been stolen or illegally obtained, you must inform the NSW Fair Trading Commissioner for Fair Trading. Failure to do so is an offence with penalties of up to $2,200.

Use our online contact form to inform the Commissioner of suspected stolen or illegally obtained goods.

If an authorised officer (such as a NSW Police officer, Transport NSW officer or a NSW Fair Trading Investigator) believes a motor dealer is in possession of a motor vehicle, part, or accessory that has been stolen or illegally obtained, the officer can issue a non-disposal notice.

A non-disposal notice stops you from altering, selling, or disposing of the suspicious goods for a period of 14 days and can be further extended by application to the Local Court.

Failure to comply with a non-disposal notice can result in a penalty of up to $55,000.

Odometer tampering

Do not tamper with a vehicle’s odometer.

It is against the law to interfere with an odometer reading by:

• altering the reading
• removing or replacing the odometer, or
• stopping it from working in any way.

You can only repair or replace an odometer if the Commissioner is notified using the approved form, and the odometer reading is restored to reflect the accurate reading of the motor vehicle.

You can be issued with a penalty notice of $1,100 or face prosecution with a maximum penalty of $55,000.

If convicted by a court, you may also be liable to pay compensation to customers for any losses incurred between the sale price and the fair price of the vehicle at the time of sale.