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This section applies mainly to buying from
a motor vehicle trader operating from a car-yard (car-yard trader).
This information also applies to motor vehicle wholesalers,
importers, brokers and motor vehicle traders selling on the
Internet. The rules for auctioneers, and car market operators are
different.
What to check
Trader registration
All motor vehicle traders are required to be registered under the
Motor Vehicle Sales Act (MVSA).
Registered motor vehicle traders will have a certificate with
their trader number on it and the date their registration expires.
You can ask to see this registration certificate. We have
developed an
example registration certificate so vehicle buyers can see what
it should look like. (The certificate is a PDF file - 90kbs.
Instructions for
obtaining the Adobe Acrobat viewer).
You can check whether a car-yard trader is registered by visiting
the Motor Vehicle
Traders Register or phone 0508 MOTOR TRADERS (0508 668 678).
This service is free. You can also check the Motor Vehicle Traders
Register for a list of people who have been banned from operating as
a registered motor vehicle trader.
If a car-yard trader is not registered, you can report this to
the Motor Vehicle Traders registrar by using the online complaints
form available at the
Motor Vehicle Traders Register website. Motor vehicle traders
who are not registered can be fined up to $200,000.
Quality of the vehicle
Although you may be entitled to a remedy from the car-yard trader
if the vehicle is faulty, we suggest you have the vehicle
mechanically checked before deciding whether to purchase the
vehicle. If any problems are found you can then agree with the
car-yard trader how those problems will be put right before the sale
is finalised, or you can choose not to continue with the purchase.
Money owing on the vehicle
Check the Consumer Information Notice. If the car-yard trader
includes the following statement on the front of the notice...
“There is a security interest registered over this motor vehicle”
...the person or company who has registered the security interest
may repossess the vehicle from you.
Read the Consumer Information Notice carefully to make sure this
statement is not included. The notice provides more information
about what a security interest is.
If you do buy the vehicle with this statement, you take it
knowing it has money owing on it and risk losing it to the person or
company that registered the security.
If the statement does not appear on the notice this means you
take the vehicle free of any earlier security interest. The vehicle
cannot be repossessed from you.
A law called the Personal Property Securities Act 1999 (PPSA)
sets out the rules about security interests. Visit
Checking whether money is owed
for more information.
Trade-in offers
Be wary of unrealistic trade-in offers (high prices offered for
trade-ins with lower actual value). The price of the vehicle you
want to buy could be increased to cover the difference. Compare the
prices of similar vehicles in other traders’ yards to work out the
best deal.
Extended warranty offers
Many car-yard traders sell extended warranties. Before you agree
to buy this type of warranty ask yourself if it’s giving you any
extra protection above what the law provides.
Check the terms and conditions of the warranty. Ask:
- What parts and problems does it cover?
- What does it exclude?
- Do I have to pay an excess, and if so how much?
- What are the rules about servicing? Many warranties state you
must get the vehicle regularly serviced by certain mechanics every
5,000 kms. Will you be able to do this? Check whether the warranty
or insurance will become invalid if you use other mechanics.
If you are told the warranty or insurance is free, make sure that
the cost has not been added to the price of the vehicle. Check the
prices of similar vehicles at other yards.
Before you sign...
Take time to...
...think about whether you want to go ahead with the purchase. Don’t
be pressured into buying before you are really sure. If a car-yard
trader tells you they are offering you a good deal, compare the
price of similar vehicles at other yards to make sure the offer
really is a good deal.
Take time to...
...read very carefully what you are signing. People can be caught
out - eg, the trader tells them the contract is to HOLD the car for
them, but the buyer later finds out they have signed a binding
contract or agreed to pay a non-refundable deposit.
Take time to...
...decide how you are going to pay for the vehicle. Many car-yard
traders offer finance deals and you may be able to borrow from other
sources. But using hire purchase or taking out a loan can add to the
overall price.
For more information check out Buying a
motor vehicle on credit.
If things go wrong - your legal
protections
The Consumer Guarantees Act applies to both new and used vehicles
of a kind ordinarily bought for a personal or domestic purpose. It
does not cover vehicles of a kind ordinarily bought for commercial
purposes.
If you buy from a trader, this law gives you a number of
guarantees over the quality of the vehicle. The Consumer Guarantees
Act sets out what the trader must do if the vehicle you buy fails to
meet certain guarantees.
For more information see Problems with a motor vehicle.
Be aware
Traders can contract out of the Consumer Guarantees Act if you are
buying the vehicle for business use. They will usually do this by
getting you to sign a clause in the sale contract acknowledging that
the vehicle is for business use. An example of such a clause is:
“The purchaser acknowledges that she is buying the car for a
business purpose and that the Consumer Guarantees Act does not
apply.”
The Fair Trading Act
The car-yard trader must not mislead or deceive you, or make
false representations about the vehicle.
This means that everything on the
Consumer Information Notice
must be true and correct, and anything the trader tells you about
the vehicle must also be true (this includes: information in
advertisements; car-yard signs; and statements made by the trader).
The Fair Trading Act gives you the right to claim compensation
from a car-yard trader if you end up with a bad deal because you
were misled or deceived. Check out
Problems with a
Motor Vehicle for more information. If you believe you have been
misled you can report this to the Commerce Commission.
Be aware
The legal protections under the Consumer Guarantees Act and Fair
Trading Act also apply to sales to consumers by unregistered motor
vehicle traders.
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