Issue Date:  -  Thursday, 26 March 1998

Car dealer out for nine months

A Rockingham car dealership and its director have been disqualified from holding or obtaining a motor vehicle dealer's licence for nine months.

National Stone Co Pty Ltd, trading as Nick's Motor Mart, and director Nick Muscara, of Rockingham, have been banned from operating by the Motor Vehicle Dealers Licensing Board.

The disqualification followed convictions in the courts in December last year, on charges under the Credit Act, relating to an illegal practice known as "price jacking".

National Stone and Muscara were each convicted of falsely representing the cash price of a vehicle as $12,500 when it was $11,500, falsely claiming a $1300 deposit was being paid, when in fact only $300 was paid, and inducing the buyer to make the same misrepresentations in her finance application.

Muscara and National Stone were fined a total of $1500 and ordered to pay $1800 costs.

"Price jacking" occurs when dealers mislead finance companies into believing a potential buyer's equity in a vehicle is far higher than it really is. Typically, they do this by artificially increasing the cash price of the vehicle so it appears the buyer is paying a larger deposit.

In most cases the buyer is purchasing beyond his or her means, and most finance companies would not approve finance on the true information about the deal.

Acting Commissioner for Fair Trading, Mark Bodycoat, said it was the second time in twelve months that a WA car dealer had been prosecuted for price-jacking and subsequently disqualified from holding a licence.

"In this case, the buyer lodged a complaint with us after she lost her job and found she could not afford to keep the vehicle.

"After 18 months of trying to keep up the payments, the car was eventually repossessed, but the woman decided to pursue a complaint with Fair Trading so that other people would not be caught in a similar way," Mr Bodycoat said.

"This is another reminder to dealers in Western Australia that this practice is intolerable and Fair Trading will continue to monitor the industry for dealers undertaking such practices."

Media contact:
Neil Stanbury
Tel: (08) 9282 0613