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Communtity Law Manual | Consumer protection | Buying a motor vehicle

Buying a motor vehicle

Buying a motor vehicle from a car dealer

What protections do I have if I buy from a car dealer?

If you buy a vehicle from a car dealer, you have rights under the Consumer Guarantees Act and the Fair Trading Act (see “Automatic guarantees when buying from a business” and “Protections against misleading or unfair trading” in this chapter). You also have additional protections under the Motor Vehicle Sales Act 2003.

Requirement for all car dealers to be registered

Motor Vehicle Sales Act 2003, ss 7–10

Any person who carries out the business of motor vehicle trading, or who represents that they are carrying on the business of motor vehicle trading, or who sells more than six vehicles or imports more than three vehicles within a 12-month period, is considered to be a motor vehicle trader.

Every motor vehicle trader must be registered on the Motor Vehicle Traders Register.

A person who trades in motor vehicles without being registered faces a maximum fine of $50,000 for an individual or $200,000 for a company.

Motor Vehicle Sales Act 2003, ss 95, 118

You can ask to see the dealer’s registration certificate. This will have the car dealer’s trader number on it and the date their registration expires.

Motor Vehicle Sales Act 2003, ss 22, 56

You can also check the Motor Vehicle Traders Register online. This service is free. (See “Other resources” at the end of this chapter.)

Guarantee of good title

Motor Vehicle Sales Act 2003, ss 14, 15; Personal Property Securities Act 1999, ss 58, 59

A registered motor vehicle trader is required to state, in a notice attached to a vehicle, whether there is any security interest over the vehicle – that is, whether anyone owes money on the vehicle, for example, to a finance company. If there is a security interest that is not mentioned, then the trader (and not you) will be liable for any outstanding debts.

Warrant of fitness less than one month old

Land Transport Rule: Vehicle Standards Compliance 2002, rule 9.12

A motor vehicle sold to you by a motor vehicle trader must have a warrant of fitness that is less than one month old (unless you give a written undertaking that you won’t use the vehicle on the road except for taking it to get a warrant or that you accept that the warrant is more than one month old).

Information about the vehicle must be displayed

Motor Vehicle Sales Act 2003, ss 14, 15; Consumer Information Standards (Used Motor Vehicles) Regulations 2008

A motor vehicle trader, or a person selling a vehicle through a car market operator, must attach a consumer information notice (CIN) to every motor vehicle displayed for sale. If the car is advertised, for example, on the internet, the same information must be provided there.

Note: A car market operator is a person who provides premises (for example, a market or car fair) or facilities (for example, internet services for others to sell vehicles).

Motor Vehicle Sales Act 2003, s 6; Consumer Information Standards (Used Motor Vehicles) Regulations 2008

The information in the notice must include:

  • the name and business address of the supplier
  • if the supplier is a registered motor vehicle trader, their registration number
  • the cash price of the vehicle, including GST, registration and licensing costs (unless the vehicle is being displayed for sale by auction or by competitive tender, in which case this should be stated in place of the cash price)
  • whether any security interest is registered over the vehicle
  • the vehicle year of the motor vehicle as recorded on the motor vehicle register (for motor vehicles registered before 1 January 2007, “vehicle year” means the year of manufacture or the model year or the year of first registration, and for motor vehicles registered after 1 January 2007, “vehicle year” means the year of first registration anywhere in the world)
  • the make, model, engine capacity and fuel type of the vehicle and the vehicle’s ID or chassis number
  • the year in which the vehicle was first registered in New Zealand, or, if the vehicle was first registered overseas, the year of that first registration
  • the odometer (distance travelled) reading, or a statement that the odometer reading is or may be inaccurate
  • whether the vehicle is recorded on the motor vehicle register as having been damaged when it was imported
  • whether or not the vehicle has a current warrant or certificate of fitness, vehicle licence and registration and the relevant expiry dates.

    Motor Vehicle Sales Act 2003, ss 16, 17

If you buy the car from the trader, the trader must give you a copy of the notice. The trader must get written acknowledgement from you that they have given you a copy of the notice (which can be contained in the contract for the sale).

Motor Vehicle Sales Act 2003, s 101

If a vehicle is displayed without the required information, or the information is misleading, you can complain to the Commerce Commission. The Commission can prosecute dealers for breaches of the Fair Trading Act. If you buy the vehicle and then discover you were misled, you will be able to take action under the Fair Trading Act (see “Protections against misleading or unfair trading” in this chapter).

What can you do if you have problems with a motor vehicle trader?

If you are unable to sort out a problem with a motor vehicle trader personally, you can:

  • make a claim to the Disputes Tribunal, if the amount in dispute is $30,000 or less (see the chapter “The Disputes Tribunal”)
  • make a claim to the Motor Vehicle Disputes Tribunal.

What is the Motor Vehicle Disputes Tribunal?

Motor Vehicle Sales Act 2003, ss 89, 90, Schedule 1, clauses 8, 9; Motor Vehicle Sales Regulations 2003, reg 13

The Motor Vehicle Disputes Tribunal (MVDT) is similar to the general Disputes Tribunal but specialises in problems with motor vehicles. There is a $50 fee for taking a claim to the MVDT. The hearings are in private, and usually neither side can be represented by a lawyer. The MVDT can deal with claims up to $100,000 (or more, if both sides agree).

The MVDT can decide on any application or claim against a motor vehicle trader in respect of the sale of any motor vehicle bought under the:

Comparing the Disputes Tribunal and the Motor Vehicle Disputes Tribunal

Disputes Tribunal Motor Vehicle Disputes Tribunal
Types of claim you can bring Claims for breach of contract, or for a declaration that you haven’t breached a contract Claims (in tort) for loss or destruction of property, or damage to property, or for recovery of property (DTA, s 10) Applications under any of the following Acts in relation to the sale of a motor vehicle:

  • Consumer Guarantees Act 1993
  • Fair Trading Act 1986
  • Contract and Commercial Law Act 2017

(MVSA, s 89)

Who you can claim against Any business or person who has sold you a vehicle, including registered and unregistered motor vehicle traders, other types of traders, and private sellers Only registered motor vehicle traders, or an unregistered trader if you can show they’re in the business of selling motor vehicles (MVSA, ss 8, 90)
What you can claim for, and how much Up to $30,000 (DTA, ss 10, 13) Claims for a refund, repair costs, or consequential damages

Claims up to $100,000 (MVSA, s 90)

Fee for making a claim $45 – claims less than $2,000
$90 – claims from $2,000 to $4,999
$180 – claims of $5,000 or more (Disputes Tribunal Rules, r 5)
$50 fee

If you win, the trader can be ordered to refund you the fee in some cases (MVSA, Sch 1, cl 14)

Can I have a lawyer? No lawyers allowed

The tribunal may allow a non-lawyer to represent you in some cases

(DTA, s 38 and MVSA, Sch 1, cl 9)

What happens after you file your claim A Notice of Hearing is sent to you and the other side

A hearing is usually held within six weeks (DTA, s 25)

The trader must discuss your claim with you and tell the tribunal in writing about the outcome, within 14 days after receiving your claim

If the dispute isn’t settled there will be a hearing, usually 1 to 2 months after you file your claim (MVSA, Sch 1, cls 5, 6)

How to challenge the tribunal’s decision You can apply for a rehearing within 28 days if for example the tribunal made a factual mistake or didn’t have all the information

You can appeal to the District Court within 28 days on the ground that the process was unfair

(DTA, ss 49, 50-53)

You can appeal to the District Court within 10 working days

For claims less than $12,500, you can only appeal on the ground that the process was unfair; for claims over $12,500, you can appeal on the grounds that the process was unfair or that the decision was wrong in fact or law

(MVSA, Sch 1, cl 16)

Note: “DTA” here means the Disputes Tribunals Act 1988, and “MVSA” means the Motor Vehicle Sales Act 2003.

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