Problems with car dealers 


The car I bought from a dealer is faulty. What can I do?

If you buy a car from a dealer for personal use then it will be covered by the Consumer Guarantees Act.

This means that you should expect the car to be of acceptable quality, and fit for purpose. What acceptable quality is will depend on the age and price of the car, for example you would not expect a three year old car bought for $15,000 to fail a warrant with an electrical fault, whereas this might not be surprising for a 15 year old car bought for $2500.

The dealer must disclose any faults that they are aware of when they sell the car and these should be listed on the Consumer Information Notice. If the fault is minor and disclosed to you before the sale, you can’t make the trader responsible for fixing it.

If you discover the car is faulty or develops a fault then your first step should be to talk to the dealer and explain that you expect them to remedy the fault, as they are required to do so under the Consumer Guarantees Act. If they don’t agree put your complaint in writing to them, and include any supporting documentation. (More information about complaining effectively is on our Complaints and Disputes pages).

If the dealer won’t agree to remedy the problem you can check to see whether they are a member of the Motor Trade Association, and if they are you can use their free mediation service.

If the mediation is unsuccessful or not possible then you can make a claim to either: 

For more information about motor vehicle traders’ responsibilities visit our Buying from a dealer page. General information about the Consumer Guarantees Act is on our Consumer Guarantees Act and Fair Trading Act page.

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The dealer won’t take responsibility for the faults in the car he sold me, because it was sold on behalf of a private individual. What are my rights?

When the sale of a vehicle has been arranged by a motor vehicle trader, even if the trader is selling it to on behalf of a private individual, you have the same rights as you would if the trader is selling a vehicle they own. (Visit our Buying from a dealer page for more information). The trader can’t refer you on to the previous owner and tell you it was a private sale.

This means that if the car turns out to have faults soon after you have bought it, and the trader had not disclosed them to you before the sale, you are entitled to have the problem remedied (see the previous question) – and it is the trader who is responsible for fixing the problem, not the individual on whose behalf they are selling it.

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How can I make a complaint about a registered dealer?

If the dealer is a member of the Motor Trade Association, you can call their mediation service on 0508 682 633 for advice and help with resolving your dispute. 

You can report the issue to the Commerce Commission if you think the dealer has mislead you (or other consumers) about the vehicles for sale e.g. with misleading advertising. They can’t act for you, but they can investigate businesses that are in breach of the Fair Trading Act. You can find out more about the Commerce Commission on their website.

If you are concerned that the dealer might not be registered, you can check the Motor Vehicle Traders Register online. You can also look to see whether the dealer has been banned from the Register. Complaints about dealers trading illegally can be reported to the Register.
 
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How does the Motor Trade Association mediation process work?

The Motor Trade Association (MTA) represents motor trade professionals, including vehicle dealers, repair workshops (e.g. your local mechanic) and service stations. Membership is voluntary. MTA members are bound by a code of ethics, and are answerable to the organisation.

The MTA mediation service is available if you and an MTA member are in dispute and have not been able to resolve it between you. They have a team of specialists who can give you advice and help you come to an agreeable solution. The process is explained on the MTA website.

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What is the Motor Vehicle Disputes Tribunal?

The Motor Vehicle Disputes Tribunal (MVDT) resolves claims and disputes over the buying and selling of motor vehicles where the dispute involves a motor vehicle trader and the claim totals up to $100,000 (or more with written consent of both parties). The MVDT hears claims involving the Fair Trading Act, the Contracts and Commercial Law Act, and the Consumer Guarantees Act.

A tribunal hearing will usually take one or two hours and both buyer and the dealer (or an authorised representative) must attend. Neither party can be represented by a lawyer, but can bring a support person if the adjudicator agrees to it (e.g. one party is a minor or has a disability).

For example you can take a claim to the Motor Vehicle Disputes Tribunal over:

  • quality issues and faults with the vehicle covered by the Consumer Guarantees Act or Contracts and Commercial Law Act
  • misleading and deceptive conduct as covered by the Fair Trading Act 1986
  • the sale of a vehicle by an unregistered motor trader that was subject to security interest

Depending on the situation you may be able to claim for:

  • repair of your vehicle by the trader at their own cost
  • the cost of having repairs done by someone else, if the trader has not done the repairs within a reasonable time
  • a refund of all of the money you paid for the vehicle, if it is a serious fault or a serious false representation
  • compensation for the loss you have suffered as a result of the fault, the problem, or the false representation (consequential loss). This can be the cost of any repairs or any loss in the value of the vehicle, e.g. if the vehicle was represented as a 1998 model and you found out that it was actually a 1996 model)
  • The finance agreement to be taken over by the trader (if you used one to buy the vehicle), so that you are no longer liable for the debt. 

More information about what you can claim is on the MVDT website.
 
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How do I take a claim to the Motor Vehicle Disputes Tribunal?

It costs around $50 to file a claim with the Motor Vehicle Disputes Tribunal. Before you proceed, you need to gather some supporting documents; these are detailed on the Ministry of Justice website.

You can download a claim form and send it, along with your supporting documents, to:

Motor Vehicle Disputes Tribunal,
DX EX 11086
Auckland 1010

After you have filed your claim, the Tribunal will contact the dealer and ask them to discuss the problem with you and attempt to resolve it. The dealer must supply a written report of the discussion within 14 days. If the claim is not settled at this stage, or the MVDT doesn't hear from the trader by then, a date for a hearing will be arranged.

You can check the Consumer Protection website and the Ministry of Justice website for more information, or contact your local CAB for help in making a claim.