Government Cracks Down on Hidden Used Car Fees and Expands Refund Rules

The government has announced new policies to boost trust in the used car market, including a measure allowing consumers to get a full refund if major defects are found within seven days of purchase resulting in excessive repair costs.

The Ministry of Land, Infrastructure and Transport announced the Used Car Consumer Protection Measures today (August 6), stating that consumers will now only have to pay the exact amount listed in online advertisements without any additional fees, and will be able to demand repairs from sellers if defects occur during the warranty period.

First, the government is making it mandatory for dealers to display the total price—including all fees as well as the vehicle price—when advertising used cars on internet platforms.

Previously, fees not shown in advertisements were often disclosed late at the contracting stage, or performance insurance fees incurred during vehicle inspections were passed on to consumers. For example, even if an online listing price was 5 million won, more than 1 million won in additional charges—such as a 440,000 won transfer fee, a 200,000 won brokerage fee, and a 500,000 won performance insurance fee—were sometimes tacked on.

From now on, dealers must display the final price of around 6.2 million won rather than just the base vehicle price.

In addition, if major components like the engine are found to be defective within seven days of purchase and the repair cost or repair period is excessive, consumers will be allowed to cancel the purchase contract.

The Ministry of Land, Infrastructure and Transport provided examples of excessive repair burdens, such as "cases where repair costs are 3 million won or more and exceed 30% of the purchase price, or the repair period is 30 days or longer."

Problems have been severe enough that approximately 80% of used car complaints were previously related to poor inspection records. To eradicate the practice of dodging responsibility by claiming simple mistakes, the government has decided to push for disciplinary actions, such as business suspensions, for inspection errors on critical items like flood and accident history, regardless of whether they were intentional.

(Reported by Kim Taewon | Video by Kim Minji | Graphics by Yang Hyemin | Produced by SBS Digital News)

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