An Auckland car dealership has been ordered to cough up a hefty fine ($75,000) for misleading consumers about their rights under New Zealand consumer law.
The company offered trade-in vehicles via $1 reserve auctions on Trade Me on an “as is where is basis” and stated that no guarantees or warranty applied. By doing so, they were misleading consumers about the compulsory guarantees they had to provide under the Consumer Guarantees Act.
All motor vehicle traders are obliged to comply with the Consumer Guarantees Act by providing their customers specific guarantees for any vehicle they sell, such as that the vehicle is of acceptable quality and complies with its description. These guarantees apply whether or not you buy an extended warranty or breakdown insurance.
Dealers who say they aren’t responsible for faults covered by the Consumer Guarantees Act and other consumer laws would be misleading customers and may be in breach of the Fair Trading Act. This means that they aren’t allowed to use phrases such as “end of life vehicle” or “suitable for parts only but runs well” to avoid responsibility or claim that no guarantees or warranty apply unless you buy extended warranty or breakdown insurance.
"Traders cannot evade their responsibilities to provide guarantees and remedies under the CGA by using phrases such as 'end of life vehicle' or 'suitable for parts only but runs well'," Wallace said. "Where consumers buy vehicles from traders, rather than private sellers, the purchase will always be covered by legal statutory guarantees, including that the vehicle is of acceptable quality and complies with its description. "Any attempt by traders to mislead consumers about their rights is likely to breach the Fair Trading Act."