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 “Fair Trading Act: Protections against misleading or unfair trading”).
You also have extra protections under the Motor Vehicle Sales Act 2003.
Who’s a “motor vehicle trader”?
Someone who buys and sells motor vehicles as part of a business is considered a “motor vehicle trader”. This includes anyone who represents themselves as doing this as part of a business.
If someone sells more than six vehicles, or imports more than three vehicles within a 12-month period, they’ll be considered to be a motor vehicle trader.
How do I know if someone is a motor vehicle trader?
Every motor vehicle has to be registered on the Motor Vehicle Traders Register. You can check the Motor Vehicle Traders Register online for free: go to: www.motortraders.govt.nz and click: “Search the register”.
You can also ask to see the trader’s registration certificate. This will have the car dealer’s trader number on it and the date their registration expires.
If someone is acting as a motor vehicle trader but they’re not registered, they could face a maximum fine of $50,000 for an individual or $200,000 for a company.
What information does a motor vehicle trader have to give me?
A motor vehicle trader is required to:
- tell you about any security interests – they have to attach a notice to the vehicle to state whether there is any security interest over the vehicle. For example, if the previous owner owes money on the car to a finance company, the finance company holds a “security interest” over the car. If there is a security interest that is not mentioned, then the trader (and not you) will be liable for any outstanding debts.
- make sure the warrant of fitness is current and less than one month old – They can only sell you a motor vehicle with a current warrant of fitness of less than one month old. If it doesn’t, but you still want to buy the motor vehicle regardless, you have to sign a written undertaking to confirm that either:
- you know and accept that the warrant is more than one month old, or
- you agree not to use the car on the road (except for taking it to get a new warrant).
- attach a consumer information notice (CIN) to any motor vehicles for sale (see below).
Look for the Consumer Information Notice (CIN)
A motor vehicle trader must attach a consumer information notice (CIN) to every motor vehicle displayed for sale, including if its advertised online.
Anyone selling a car through a car market operator must also display a CIN. A car market operator is a person who provides premises or facilities for others to sell vehicles (for example, a market, car fair, or website).
If you buy the car, the trader has to:
- give you a copy of the notice, and
- get written acknowledgement from you that they have given you a copy of the notice. This might be included in your contract for the sale.
What information should be in a Consumer Information Notice (CIN)?
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 (the year it was first registered anywhere in the world) as recorded on the motor vehicle register. Note that if the motor vehicle was registered before 1 January 2007, “vehicle year” means the year of manufacture, or the model year, or the year of first registration.
- 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.
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 (see: “What can I do if a trader has engaged in misleading or unfair trading?”).
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”).
What can you do if you have problems with a car dealer?
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 Disputes Tribunal”)
- make a claim to the Motor Vehicle Disputes Tribunal (which can deal with claims up to $100,000, or more if both sides agree).
Note: You can only use the Motor Vehicle Disputes Tribunal if you bought from a motor vehicle trader, not if you bought a vehicle from a private individual.
What is the Motor Vehicle Disputes Tribunal?
The Motor Vehicle Disputes Tribunal (the “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:
- Contract and Commercial Law Act 2017 (see: “Buying and selling privately”)
- Fair Trading Act 1986 (see: “Fair Trading Act: Protections against misleading or unfair trading”)
- Consumer Guarantees Act 1993 (see: “Automatic guarantees when buying from a business”)