A rising number of complaints about new cars has prompted the consumer watchdog to launch its first industry-wide probe into makers and dealers.
Australian Competition and Consumer Commission chairman Rod Sims says the watchdog has fielded at least 1000 complaints about new car defects and warranty issues in the past 12 months.
"And I suspect the other consumer regulators are fielding similar amounts of complaints," Mr Sims told AAP.
"It is a lot more than in the past. It has become a bigger issue, no doubt."
Mr Sims said the increase showed people were having trouble securing their consumer guarantee rights, which he labelled as a priority given more than one million new vehicles are sold in Australia each year.
He said the market study is the ACCC's first sweeping review of the new car industry and would focus on makers' and dealers' compliance with consumer guarantees, as well as misleading practices around vehicle performance, fuel economy and emissions.
"For example, if your clutch has been repaired three times and is not working, does that become a major fault meaning you're entitled to a refund or replacement vehicle?" Mr Sims said.
"Another issue is whether dealerships are telling consumers that they would forgo their warranty if they got their car serviced somewhere else."
He said the ACCC would also look into complaints that computer locks were being placed in cars to prevent people from accessing data unless they return to the dealership from which they bought it.
A draft report of the ACCC's findings is expected to be released in the first three months of 2017.
The ACCC has investigated a string of car makers recently, including Fiat Chrysler, Volkswagen and Kia.
The Kia and Fiat Chrysler Australia probes ended last year, while the VW investigation is ongoing.
Fiat Chrysler agreed to a consumer redress program and to an internal review of its handling of complaints, while Kia agreed to amend its terms and conditions of its capped price servicing offer.
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