A Perth woman has issued a warning to potential car buyers after it was found her son would be liable for nearly $16,000 in damages after crashing a car when he was out on a test drive.
Kim told 6PR's Morning Show on Thursday morning her son had been planning on making the $3500 purchase from a local car dealership when he was involved in the accident.
"He asked if the car was insured and he was told yes," she said.
"During the test drive he had an accident, he went through a give way sign and because the brakes didn't work so well, he cleaned up another car."
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Her son was towed back to the dealership, where the salesperson informed him the car had only been insured with compulsory third party insurance and he would be fully liable for the accident.
Compulsory third party (CTP) insurance is the minimum level of cover in Australia, and drivers automatically get CTP insurance in WA when they pay their car registration.
CTP covers a driver for any personal injury they might cause to another person in a car accident or incident, but does not cover damage or repair bills in the event of an accident.
The insurance company estimated the recoverable amount to be around $12,500.
But if Kim's son was able to pay the full amount in one lump sum, he would then be required to pay only $10,500.
But this wasn't an option for the 22-year-old, who had only recently put down a mortgage on a Perth property.
"Because he doesn't have money to pay that full amount, we opted to go to a debt collector and they've upped the amount to $16,000," she said.
"We offered to pay $50 a month, because he's just got a mortgage, and they said that was unacceptable.
"If they wanted to, they can take it to the extreme and send in bailiffs to take everything and even sell his house.
"That's quite a big thing. We've agreed he'll pay $100 a month and they've accepted that at this stage."
However Kim's son is still currently in a battle over the amount owed, arguing the amount should not be increased due to his inability to pay the insurance company in one single lump sum.
Consumer Protection WA acting commissioner David Hillyard said he sympathised with the 'nightmare situation' the young man found himself in.
"It's [the dealerships] vehicle, it's his property and he's enabling someone to drive the car," he said.
"It's just like you let one of your mate's drive your car and you haven't got it insured. If you don't tell him that it's not insured he shouldn't be fully liable for the damage which has been caused to the vehicle because he would assume you're a sensible person who has insurance on your vehicle so you need to alert the person about the risk they're going to take.
"They need to make it clear to people what level of insurance they've got.
"The issue about escalating the cost of the damage up because you can't make a lump sum payment is also not something which sounds correct to me."
While WA car yards are bound by the regulatory requirements set out in the Motor Vehicle Dealers (Sales) Regulations 1974 act, business owners are not currently required to take out insurance in order to cover consumers out on test drives.
Large car dealerships often have specific controls they must comply with in order to bve eligible for their insurance policies.
This includes a salespeople sitting in a vehicle during test drives, and confirming license details of a consumer.
However, Kim said the dealership her son attempted to purchase the vehicle from was a small business and has since turned into a wrecking yard.
Mr Hillyard said while he didn't know full details, he was inclined to fight for Kim.
"I'd be arguing very strongly that this dealership has got some obligations to sort out, but I need to get all the facts and details and then we'll make a call on just exactly where we stand," he said.
Consumer Protection WA contacted Kim after the program aired and they are currently investigating the situation.