Holden has promised the competition watchdog it will review and refund customers who were issued warranties that failed to deliver guarantees required under consumer law.
The Australia Competition and Consumer Commission investigated the car manufacturer after receiving complaints about its response to manufacturing faults.
"Holden acknowledged that it misrepresented to some consumers that it had discretion to decide whether the vehicle owner would be offered a refund, repair or replacement for a car with a manufacturing fault, and that any remedy was a goodwill gesture," ACCC Chairman Rod Sims said.
The company also accepted that some customers were told the company would not repair the fault because their car had not been serviced by a Holden dealer, or because it was bought second hand.
Holden executive director of customer experience, Peter Jamieson, said the company is now offering customers a refund, replacement or repair without having to prove that a major vehicle failure occurred, within the first 60 days of the purchase.
"At times our responses to customers have been too heavily influenced by vehicle warranties," Mr Jamieson said.
"Customers have always been at the heart of Holden, but we do recognise there have been some situations in the past where we could have done better."
The ACCC said among other recommendations, Holden had engaged an external reviewer to address any complaints since January 2016.
"Rather than make an example of them in court, we've let them set an example out of court," Mr Sims said.
The watchdog will release a draft report into car retailers next week, which will elaborate on widespread consumer law issues.
Car owners are entitled to the guarantee of the law for major and minor faults, not on the generosity of the retailer, Mr Sims told AAP.
"The consumer guarantees operate separately to the manufacturer's warranty, and cannot be modified to require consumers to have their vehicles serviced by authorised dealers in order to obtain a remedy."
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