How long is a lifetime? According to Patterson Cheney Holden, a motor vehicle dealership in Victoria, its either 175,000 kilometers or $3,000 worth of claims.

The ACCC announced today that Patterson Cheney Pty Ltd has paid two infringement notices after being found to have made misleading representation in advertisements placed in The Herald Sun and The Age on 15 and 16 October 2010.

Patterson Cheney Holden advertised during a three-day sale that it was offering customers “Free Extended Lifetime Mechanical Warranty” for all new and used vehicles bought from its dealership in Vermont during the sale period. However, the ACCC found that limitations applied to the warranty, whereby the warranty was only valid until either the purchased vehicle had reached 175,000 kilometers or had gone through up to $3000 worth of claims.

Fines amounting to $13,200 were issued after the ACCC found that Patterson Cheney Holden had contravened the 'Competition and Consumer Act 2010' for providing “false or misleading representations about the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy”.

Patterson Cheney Holden will be required to provide affected customers with the option of switching to its premium warranty product. The dealership will also have to implement and maintain a trade practices compliance program and publish corrective notices on its website and in The Herald Sun and The Age.

“This matter is a warning to the motor vehicle industry that dealerships need to be truthful in their advertising and avoid exaggeration when promoting vehicles," says ACCC chairman Graeme Samuel.

"While dealerships are free to offer extended warranties to customers, their advertising of such warranties must be accurate. Misleading statements must not be used to bait consumers."