PLEASE NOTE: This article was published on the date listed below and may now contain information that has since been updated or changed. We have retained this article as it may still contain helpful comments. However, we advise you to make an appointment to see us for the most up to date information on this topic.
New "Sins" for purchasers of Motor Vehicles
On 15 December 2003, the Motor Vehicle Sales Act (“the Act”), which replaces the Motor Vehicle Dealers Act 1975, came into effect. The stated purpose of the Act is the promotion and protection of consumer interests in relation to motor vehicle sales. Accordingly, the Act has implemented significant changes in the law relating to car dealers and their trading activities.
Motor Vehicle Traders
The previous licensing requirements of car dealers have been replaced by a new system of registration that applies to all “motor vehicle traders”. A “motor vehicle trader” is any person whose business is motor vehicle trading, and includes car market operators, importers, wholesalers, auctioneers, and car consultants. It is also includes persons who hold themselves out as carrying on the business of motor vehicle trading, and persons who sell more than six vehicles or import more than three vehicles in any 12 month period.
Supplier Information Notices
The change that is likely to be of most interest to persons buying and selling vehicles is the requirement that all traders display a Supplier Information Notice (“SIN”) on all used vehicles. The SIN replaces the old window card and contains crucial information for the consumer. In particular, a SIN must:
- Advise whether or not a trader is registered and give details of the trader’s registration number.
- Disclose details of any security interest registered against the vehicle. Ownership of vehicles purchased from registered traders passes to consumers free of any security interest other than those noted on the SIN.
- Provide a summary of rights available to the consumer.
- Contain information about the actual distance travelled by the vehicle.
Furthermore, if the trader believes that the odometer reading is incorrect, the position in this regard must be clearly stated on the SIN.
The Commerce Commission oversees enforcement of the requirements relating to SINS.
The jurisdiction of the Motor Vehicle Disputes Tribunal (“the Tribunal”) has been extended. In particular:
- The Tribunal can now hear claims under a wider range of laws including the Consumer Guarantees Act, the Fair Trading Act, and the Sale of Goods Act.
- Claims can be made against registered traders and unregistered traders if the consumer can show that the trader was in the business of selling vehicles.
- The Tribunal could previously only deal with claims relating to used vehicles but it can now hear claims relating to new vehicles up to $50,000.00.
Whilst the Act goes some way towards meeting its stated intention of providing increased consumer protection (and does so in the case of purchases from registered traders) the Act does not provide any real incentive for those who illegally import and sell cars each year to conduct their business lawfully. Furthermore, there is no additional protection for consumers who purchase vehicles from persons who do not fall within the definition of traders, such as most “private sales”.
In view of the above, it is absolutely vital that consumers ensure that they see a copy of the SIN and carefully note the contents of it prior to purchasing a vehicle. Consumers should also be aware of the risks of purchasing motor vehicles privately, as there is little protection for the unwary.