Solvent fumes have aggravated children's asthma and killed goldfish, claim residents.
People living near Humphris of Oxford, the car dealership in Rose Hill, have also claimed spray-painting, carried out in a first-floor workshop, is preventing them using their gardens or opening windows.
Oxford City Council's environmental health department said it was unable to speculate on the cause until an investigation was carried out.
The dealership's managing director Bryan Humphris said the company used the latest environmentally friendly technology, but would do what it could to stop the smell if the workshop was to blame.
Ed Turner, city councillor for Rose Hill and Iffley, said 20 Rose Hill and Annesley Road residents had signed a petition.
He told the council's south east area committee: "The residents are very upset about the fumes and a number of them link asthma in their children to this process. A number of them also say goldfish have died in their gardens."
Environmental health officers said they had received seven complaints last year, mostly during the summer.
They said the problems may have been the result of a mixture of fume emissions combined with traffic pollutants.
They will be carrying out spot checks.
Petition organiser Susan Goldacre, of Rose Hill, said she did not think it was appropriate to have a spray-painting workshop in a residential area.
She said: "I have done some research and the garage uses water-based paint. This means that, in terms of Government guidelines, the solvent level is not dangerous.
"But that does not mean it's not unpleasant. In the summer, people are unable to sit in their gardens or have their windows open because of the fumes.
"Some people have felt nauseous and a couple of people have said they are no longer able to grow vegetables in their gardens, and blame the fumes.
"Things have got worse since the workshop opened in 1996. We do not have anything against the dealership, but feel the workshop would be better on an industrial estate."
Environmental health officers said the company had used water-based paints since 2000.
Mr Humphris said: "I don't believe the paint smells. We use a solvent-based lacquer, but the amount of spraying we do with that is small.
"We comply with all regulations. We don't want to be a nuisance. We're here to earn a living."
The council officers said the amount of solvents used by the company had halved since the introduction of water-based paints.
They have asked residents to keep a diary of when they could smell the fumes.
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