Mr. A recently found a used car he liked on a platform priced at 5 million won. At the moment of signing the contract at the actual sales location, he was taken aback. This was because it stated that an additional 1.14 million won would be added on top of 5 million won, including a 440,000 won seller fee, a 200,000 won brokerage fee, and a 500,000 won performance insurance premium.

Mr. B discovered an engine defect soon after purchasing a used car. The performance inspection report he checked at the time of purchase showed all functions as normal. When he contacted the dealer, the dealer said they did not know and told him only to handle it through the performance insurance. He filed a complaint with the competent local government, but was told that inspection errors provide no basis for administrative sanctions.

To protect used-car consumers, the government will improve the system by mandating disclosure of fees and by changing the structure so that sellers bear warranty liability for defects. If a defect occurs within seven days after purchase, a refund will also be available.

On the 6th, the Ministry of Land, Infrastructure and Transport announced ‘Measures to Protect Used-Car Consumers’ at the 12th State Policy Coordination Meeting, stating, “We will improve the low level of trust accumulated in the used-car market and its unfair practices so that anyone can trade used cars with peace of mind.”

First, when dealers advertise used cars on online platforms, they will be required to display not only the vehicle price but also the total amount including all fees. According to the Ministry of Land, Infrastructure and Transport, at present additional fees collected under various headings such as seller fees, brokerage, and registration application agency can exceed 30% of the sale price shown on the platform.

Warranty liability for defects will be clearly shifted to dealers. Until now, when a defect was found in a used car that had been sold, it was the inspector, not the dealer, who compensated the repair cost. The repair cost was paid from the performance insurance held by the inspector. Because this performance insurance premium is charged to the consumer at the time of sale, the repair costs paid from the performance insurance effectively return to the consumer as a burden.

The Ministry of Land, Infrastructure and Transport will integrate performance insurance into a mandatory insurance for dealers, while increasing the coverage period and items and reducing the premium burden.

In addition, if within seven days of purchase a defect in a major component such as the engine leads to repair costs of 3 million won or more or at least 30% of the sale price, or if the repair period exceeds 30 days, the used car can be refunded. If histories such as flooding·fire·accidents·recalls are omitted from the inspection scope or are disclosed inaccurately, penalties or business suspension can be imposed regardless of intent. The Ministry of Land, Infrastructure and Transport plans to introduce related amendments to the laws in September.