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A person in trade includes motor vehicle
traders (registered or unregistered), importers, wholesalers,
vehicle auctioneers and car market operators, or anyone selling a
motor vehicle in the course of a business.
All information about the vehicle must be correct and must not be
misleading, including the information on the Supplier Information
Notice.
If a trader has made a false or misleading representation, and
you have suffered loss as a result of that representation, you may
be able to claim compensation from the trader.
What amount of compensation am I
entitled to?
The amount will depend on the nature of the misrepresentation and
how much it may have affected the vehicle’s value.
eg, the Supplier Information Notice on the car Merita bought
stated that the car was manufactured in 1998, but she later finds
out that it is actually a 1994 model. Merita can prove that she
paid more than the reasonable price for a 1994 model.
Merita’s compensation may be based on the difference between what
she paid for the vehicle and what the vehicle was actually worth
when she bought it.
Claiming compensation
If you are unable to resolve the matter with the trader you could
take a claim to the specialist
Motor Vehicle Disputes Tribunal or to the general Disputes Tribunal.
The Fair Trading Act gives Tribunals a wide range of remedies to
apply, where they are satisfied that a trader has breached the Act
and that you have suffered or are likely to suffer a loss.
A Tribunal can order:
- that your contract with the trader be varied, or changed in a
way that compensates you for your loss
- that your money be refunded, or your trade-in returned
- that the trader pays you an amount of money to compensate you
for the loss you have suffered as a result of being misled
- that the trader repairs the vehicle or provides parts for it.
Who can I report Fair Trading Act
breaches to?
You can report misleading conduct by a trader to the
Commerce Commission. The
Commission will also accept reports of motor vehicle traders
offering vehicles for sale where the Supplier Information Notice is
missing or the information on the notice is inaccurate, incorrect or
misleading.
Consumer Guarantees Act
The Consumer Guarantees Act (CGA) applies to any vehicle sold by
a person in trade where the vehicle is of a kind ordinarily acquired
for personal or domestic purposes. “Ordinarily acquired” means
something usual or common to buy.
A person in trade includes car-yard traders, importers, and
wholesalers that sell to the public. It also includes unregistered
motor vehicle traders. The Act does not apply to sales by auction or
tender or to private sales.
The CGA provides a guarantee that the vehicle will match its
description.
eg, Helen sees a car advertised on a trader’s website. She
orders the car based on its picture and description. When the car
is delivered to her, the colour is different to the photo and
information provided.
If the difference is minor, Helen could ask the dealer to fix the
problem. If the description is substantially different, the remedy
may be a refund.
See faulty or defective
vehicles for more information.
For private sales
Contractual Remedies Act
Under this Act you may have rights against a private seller if
you can prove that:
- you were persuaded to buy the vehicle by what the seller said,
and
- the seller’s statements are untrue, and
- the seller’s false statements have caused you loss.
If you can show these three things, you may have a right to be
compensated by the seller. Compensation would be based on the
difference between what the vehicle is actually worth and what the
vehicle would have been worth if the seller’s statements had been
true.
eg, Tem tells Lisa that the car she is buying from him recently
had its engine reconditioned. She finds out one week later that
the engine has not been reconditioned.
Lisa can claim compensation from Tem for the cost of having the
engine reconditioned.
Claims for compensation against private sellers can be made to
the general Disputes Tribunal.
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