Buying a car from a dealer 



What are my rights when buying a car from a registered dealer?

If you buy from a registered dealer, you will have more protection under the law than if you are buying from a private individual, including:

Fair Trading Act (FTA)
When you buy a vehicle from a registered dealer, they must give correct information about:

  • price
  • condition of the vehicle
  • number of owners
  • odometer reading  

If you think that a dealer has misled you, you can report it to the Commerce Commission.

Consumer Guarantees Act (CGA)
The Consumer Guarantees Act applies to cars bought after 1 April 1994, and says that vehicles sold by dealers must be:

  • of acceptable quality
  • fit for any particular purpose made known to the seller
  • fit for their usual purpose
  • free of small faults (unless they are pointed out to you before the sale)
  • safe
  • match their description
  • a reasonable price considering their age and condition
  • able to take reasonable wear and tear, given their age, condition and price

It also requires that the trader has the right to sell the vehicle – if the vehicle you bought is repossessed due to money owed on it by someone else, you can claim your money back from the trader.

This Act does not apply to vehicles bought from private sellers, or vehicles normally used for business purposes.

Personal Property Securities Act (PPSA)
If a vehicle has a security interest on it (basically this means if it has been used as security for a loan) then this must be disclosed to you in writing before you buy it. If the security interest wasn’t disclosed to you, then you won’t be liable for any debts for which the vehicle is a security interest; the finance company would have to recover the money from the trader, not you.

Motor Vehicle Sales Act (MVSA)
If you have a dispute with a registered trader over a vehicle purchase you can take it to the Motor Vehicle Disputes Tribunal. The Motor Vehicle Disputes Tribunal can deal with disputes relating to a breach of one or more of the following Acts:

  • Consumer Guarantees Act 1993
  • Fair Trading Act 1986
  • Sale of Goods Act 1908

For more information see our section on problems with car dealers.

Many registered motor vehicle dealers are members of the Motor Trade Association (MTA). If you have a complaint about a vehicle sold by a dealer who is a member, you can contact the MTA about their mediation service.

Back to top

What are my rights and obligations when buying a motorcycle from a dealer?


The Motor Vehicle Sales Act 2003 includes most motorcycles (those with a total cylinder capacity greater than 60 cc) in its definition of a motor vehicle.

This means that when you buy or sell a motor cycle (unless it is one with a very small engine capacity) your rights are similar to what they would be when buying or selling a car.

Read about your rights and obligations when you buy from a dealer, buy or sell privately or at an auction.
 
You also have access to the same dispute resolution process if you have bought your motorcycle from a registered motor vehicle trader, and have similar pre- and post-sale paperwork.

Back to top

What does it mean when a registered motor vehicle dealer says the car is for sale ‘as is, where is?’

When this term is used by a registered dealer it generally means that the car’s warrant of fitness (WOF) is more than one month old. If you go ahead and buy the vehicle, you have to give the dealer written confirmation that you accept this. If the WOF is not current, you’ll also have to confirm that you will not drive the vehicle except to get a WOF for the car.

When a dealer advertises a vehicle “as is, where is” it does not mean that they no longer have obligations under the Consumer Guarantees Act or the Fair Trading Act (see the previous question). You should still expect the vehicle to be in a condition fit for driving. If the dealer advises you that the CFA and FTA don’t apply because you bought the vehicle “as is, where is”, they would be in breach of the FTA for misleading you about your rights.

For information about how this differs from buying a vehicle privately which is advertised “as is, where is” see our Buying a car privately page.

Back to top

What information does a dealer have to display on the car?

Dealers must display a completed Consumer Information Notice (CIN) on any car they are selling.

The notice must show

  • the business name of the dealer
  • the dealer's registration number
  • the cash price of the vehicle, including GST and any registration and licensing costs
  • notification of any security interest which is registered over the vehicle
  • the year in which the vehicle was made
  • the make, model, engine capacity and fuel type of the vehicle
  • the year in which the vehicle was first registered in New Zealand, or if the vehicle is a used import, the year it was first registered overseas
  • the odometer (distance travelled) reading, or a statement that the odometer reading is inaccurate
  • if the vehicle is recorded on the motor vehicle register as having been imported as a damaged vehicle
  • whether the vehicle has a warrant or certificate of fitness and is registered, and the dates on which these expire

If the Consumer Information Notice is missing or incorrect, you can report it to the Commerce Commission by e-mail, telephone 0800 943 600, or write to them at PO Box 2351, Wellington.

If you buy a car and it turns out that the details on the Consumer Information Notice are incorrect and the vehicle is very different from the description, or if there was no notice displayed, you can ask the Motor Vehicle Disputes Tribunal to either cancel the contract or make an order for compensation if the difference can be demonstrated to have caused you loss.

If a dealer has any reason to suspect the odometer is incorrect, they must put a notice on the vehicle saying that the odometer reading is incorrect, or that they can’t accurately determine how much distance the vehicle has travelled.

If you can prove that the odometer reading of a vehicle is incorrect, you may make a claim to the Motor Vehicle Disputes Tribunal for a refund, compensation, or to cancel the contract.

Back to top 

Should I get an extended warranty?

A standard warranty is offered by the vehicle manufacturer, while the extended warranty is offered by the dealer that sells the car to you. It is common for dealers to sell an extended warranty when you buy a used vehicle. The extended warranty will be an extra cost above the price of the vehicle itself, and can often be claimed only under certain conditions, although it can simply be an extension of the manufacturer’s warranty.

Under an extended warranty agreement, the dealer will pay all or some of the repair cost if something goes wrong with the car. This can also be called a service or maintenance agreement. It is often used by companies to limit the sort of repairs and maintenance that they will carry out.

Before agreeing to an extended warranty, you should think about exactly what is covered under the warranty, for example what defects, faults, or parts of the car are covered

  • whether you will have to pay an excess on each claim
  • whether there is a limit on repair value
  • what the conditions are for making a claim on your warranty
  • how much the warranty itself costs.

It is wise to thoroughly check the details of the extended warranty before purchasing one. If you need a second opinion, talk to someone at your local CAB or community law office.

You can read more about extended warranties elsewhere on our website.

Back to top

How do I find out if I qualify as a car dealer?

Motor vehicle traders include:

  • Motor vehicle importers
  • Motor vehicle wholesalers
  • Car auctioneers
  • Car consultants

If you have sold more than six vehicles in the last 12 months or imported more than three, then (unless you can prove that the selling or importing wasn’t for personal gain) you count as a motor vehicle dealer and must register yourself as a motor vehicle dealer.

If you are not sure whether you qualify as a trader, you can also use the Motor Vehicle Traders’ online calculator.