Beware exorbitant cost-of-usage fees with a vehicle refund

Since 2011 the Consumer Protection Act (CPA) has been a boon to motorists who felt they are being taken for a ride with a dodgy car or shoddy service.

The act places more power in the hands of consumers, allowing them to decide whether they wish to have a defective car repaired, replaced or refunded minus a cost of usage fee. In practice it’s not so clear cut — especially with regard to the cost of usage fee — as illustrated by the recent bad experience of a reader who turned to Motor News for help.

In October 2022 she bought a second-hand Mercedes C180 for R167,000 from a Nissan dealer in Durban, only to find the car developed a number of maladies. Unlike vehicles sold privately that are voetstots (as is), registered dealers are bound by the CPA to replace or repair the car if it develops problems. She took the vehicle back to the dealer for repairs a number of times but serious problems kept cropping up.  

Eventually she cried enough and demanded to return the troublesome vehicle for a refund. The dealer agreed but wanted to charge a R49,000 cost of usage fee which our reader felt was excessive and angered her even more.

We approached the Motor Industry Ombudsman of SA (Miosa), mediator of car-related consumer complaints, for comment and they agreed the charge was exorbitant. Miosa calculated a much smaller fee of R27,885 as appropriate for the length of time and mileage the reader drove the vehicle.

We presented this to the dealer who relented and agreed to the lower fee, saving our reader more than R20,000. Unfortunately it took our intervention and the threat of negative publicity to sort out the matter, and the dealer was clearly taking a chance with the initial high fee.

The CPA has been in force for more than 12 years but many service providers either assume that it doesn’t apply to them or try to dodge their responsibilities.

The moral of the story is don’t accept a refund/replacement offer that seems rotten. If the cost of usage fee seems unreasonably high, escalate the matter to Miosa (www.miosa.co.za) which has a formula to calculate the cost based on depreciation and kilometres travelled.

The motor industry is legally bound by Miosa rulings and the penalties for noncompliance can be steep. One matter escalated to the National Consumer Commission after a car dealer failed to abide by a Miosa ruling resulted in the business receiving a R100,000 fine.