Car rental companies across Australia are offering refunds on car rentals after a court ruling that allowed them to continue operating.
Key points:Cars that were being used for personal travel, for example, would now be returned to their ownersThe decision is likely to lead to higher costs for many car rental companies, with some potentially losing millions in revenueA judge ruled that drivers were entitled to a full refund of their rental, which is currently available to those renting for 12 monthsThe case has caused uncertainty for rental companies and for many, the impact on rental income will be enormousThe court said it was “a very, very difficult decision” and “a significant blow to a long-standing industry practice”The court’s ruling means that cars that were previously being used to rent out cars are now being returned to owners.
Cars were used for trips such as shopping, family visits, family outings and sporting events.
The court decision comes as the industry tries to navigate the impact of the legal change.
It is likely that rental companies will lose millions in income as a result.
The decision was made after the Australian Competition and Consumer Commission (ACCC) received evidence from the industry about the effect the change will have on rental businesses.
It found that some of the companies were likely to be able to recover more than $1.2 million in rental income if the court’s decision is upheld, but there is a significant chance that this will not be the case.
“Renters and their businesses will be impacted by the decision,” ACCC chairman Rod Sims said.
“While it is true that some businesses will likely be able recover significant income, there is no certainty that they will be able do so.”
The ACCC is currently considering whether to allow rental companies to continue to operate after the court ruling.
Rental company operator Travistix said it would appeal the decision to the Federal Court.
“Travistux fully supports the ACCC’s decision to uphold the decision made by the court and intends to appeal the outcome,” a spokesman said.
The ACCAC said it had not been notified of any appeal.