Your right to a remedy for common problems
If you experience a common problem with a car you bought from a dealer, know your rights.
Common problems include:
The vehicle you bought is not of a reasonable quality
Under the CGA, you can expect any vehicle you buy from a car dealer to be of an ‘acceptable quality’.
Whether a car is of ‘acceptable quality’ depends on the particular car you buy and how the car dealer sells it to you.
To decide if a car is of ‘acceptable quality’, think about whether a reasonable person would find the car acceptable given:
- the type of vehicle
- the price paid
- any information about the car, eg history, quality, condition, given to you by the dealer or in any advertisements
- the nature of the car dealer and how the car was sold
- any other relevant circumstances, eg how soon the car developed a problem after purchase.
If a reasonable person would not consider the car’s quality to be acceptable when they take the above points into account, you can get a remedy from the dealer under the CGA.
The vehicle you bought is faulty
Generally speaking, if there is a fault with your car after purchase, and it’s not your fault, you can go back to the dealer to claim under the manufacturer’s warranty or under the CGA guarantees.
Although some dealers may state otherwise, there is no set time limit, eg one month, you have to return a faulty car or ask for faults to be repaired.
Under the CGA, whether a dealer is responsible depends on:
- the age, type, price and condition of the vehicle at the time of purchase
- whether or not the fault is due to reasonable wear and tear
- whether a reasonable person would accept the quality and condition of the vehicle.
If the fault is serious, eg it can’t be repaired for a reasonable cost, you can reject the vehicle. By rejecting the vehicle, you can get a refund or a replacement of the same or similar vehicle.
You must tell the dealer you are rejecting the vehicle within a reasonable amount of time.
If a faulty vehicle has caused damage to your property, you can also claim compensation.
Read more about Faulty products.
The dealer made a misleading 'as is, where is' statement
If a dealer points out any specific defects before you buy and you go ahead with the sale, you can’t complain about those defects. However, a general statement such as 'as is, where is' may breach the guarantee of acceptable quality if it leads to you accepting a poor-quality vehicle. This may also breach the Fair Trading Act by trying to get out of the consumer guarantees and misleading you about your rights.
The advertising or vehicle information was misleading
If the dealer gives you false or misleading information about a new or used vehicle or your consumer rights, you have rights under the CGA and FTA.
Some examples include:
- 'clocked' cars where the odometer has been deliberately wound back
- if the seller doesn’t have the right to sell the vehicle – for example, the car has money owing on it or is stolen
- the age, history and condition of the vehicle are misrepresented.
Compensation would be based on the difference between what you paid and what the vehicle would have been worth if the seller’s statements had been true. This could mean a full refund.
Read more about Misleading prices or advertising.
There is money still owing from a previous seller
The CGA guarantee of title means a car dealer must have full legal ownership and the right to sell the car. If the vehicle was stolen, you may have to return the car but you can claim compensation from the dealer.
This also means a car dealer must tell you if a finance company has a security interest in the car because they are still owed money for it. A security interest is the right a finance company has to repossess a borrower’s belongings, eg their car, if the borrower does not pay back their loan.
To find out if the car was sold to you with money still owing, check whether the 'security interest' box is ticked on the Consumer Information Notice (CIN). The dealer would have given you a copy of the CIN when you bought the car.
If any of the information given about the security interest is wrong on the CIN, ie the box was not ticked, then it is invalid and you have full ownership rights. This means the finance company can’t take the vehicle from you.
There are no spare parts available
Under the Consumer Guarantees Act (CGA), manufacturers, importers and distributors must ensure spare parts and repair facilities are available for the vehicles they assemble or import. They can do so themselves or through their agents. This rule applies to all vehicles sold in New Zealand for the first time, eg new and imported second-hand vehicles when they are first offered for sale in New Zealand.
If there are no spare parts available for your car, you can seek a remedy under the CGA.
This guarantee doesn't apply if you were told at the time of sale that spare parts or repair facilities were not available, or were only available for a certain period of time.
You have an extended warranty or breakdown insurance
If you bought an extended warranty or breakdown insurance, this may also cover you for any mechanical or other defects. For a new car, the manufacturer’s warranty will give you free repairs for most mechanical defects within the term of the warranty. This can be up to three years or 100,000 kilometres. Warranties usually have terms and conditions you must follow, eg the vehicle must be regularly serviced at an approved garage.
Read more about Warranties.
What to do if you have a problem
Contact the dealer and warranty insurer before you do anything else.
Don’t get the car checked by a mechanic or anyone else before you contact the dealer. You could lose your right to a remedy if you do.
How to complain
What to expect when you approach the dealer
When you go back the dealer:
- Bring any proof of purchase and evidence of the problem, eg a copy of the original advert, any agreements or documents you signed, mechanical reports and photographs of the fault.
- Know what outcome you want.
- Take a support person to witness the conversation.
- Be honest and state the facts of the situation.
- Try to remain calm and reasonable.
Be prepared to honestly answer questions the dealer may ask you, including:
- what the problem is and when it appeared
- if anyone else, eg a mechanic, has looked at the car before you contacted them
- if so, whether this person did anything to the car
- how you have looked after the car, eg regular servicing, kilometres driven, etc.
- if you purchased an extended warranty or breakdown insurance.
When you approach the dealer, they should get the vehicle inspected and decide whether the problem is minor or serious.
If the problem is minor
The dealer must get any repairs done within a reasonable time. Be sure to tell them when you need the car back by. Ask for a 'courtesy car' while they repair the vehicle, although a dealer is not legally responsible for providing one.
If you agree to repairs and they don't fix the problem properly, or the vehicle develops further faults, your rights continue. You can choose your remedy options again until your problem is sorted. But if you misuse a vehicle, the CGA doesn’t apply.
If the dealer refuses, fails to do the repairs or doesn’t do them in a reasonable time, you can choose to:
- have the vehicle repaired elsewhere and claim the cost back from the dealer
- reject the vehicle and claim a refund or a replacement of the same type and similar value if it is available in stock.
If the problem is serious
A problem is considered serious if:
- it can’t be repaired or fixed
- the cost to repair the vehicle is disproportionate to the purchase price, eg if the car was bought for $5,000 and the cost to repair the fault is $4,000.
If the problem is serious, you can:
- reject the vehicle and claim a refund or a replacement of the same type and similar value if it is available in stock
- keep the vehicle and claim compensation for the drop in value.
If a faulty vehicle has caused damage to your property, you can also claim compensation.
If a dealer doesn’t agree that the fault is serious, get an independent mechanical report in writing and a quote for the repairs. If the report supports your claim that the fault is serious, go back to the dealer to reject the vehicle and choose a refund, replacement or repairs, plus compensation for the cost of your report.
If you bought the car on finance
Contact the dealer about the problem as soon as possible.
Don’t stop your payments to the finance company. The car may be repossessed if you do. You should contact your finance company to tell them about the problem and discuss your options.
If your dealer arranged your finance, the finance company is also responsible for giving you a remedy for the problem under the CGA. This is particularly important if the dealer is not being helpful or has gone out of business.
Read more about Getting a car loan
Next steps if a dealer doesn’t agree
If you cannot solve your issue directly with the seller, you can contact:
- Motor Trade Association (MTA) — If your dealer is a MTA member, they may be able to mediate between you and the dealer and help you reach an agreement.
- Motor Vehicle Disputes Tribunal (MVDT) — For issues with registered motor vehicle traders, or dealers who should be registered. Most claims are resolved within three months.
- Report the dealer — to Motor Vehicle Traders Register or Commerce Commission.
Find an MTA member(external link) — MTA
What they can do
Dealers must act on Motor Vehicle Disputes Tribunal decisions. Outcomes can include:
- your sales contract is cancelled or changed in a way that compensates you for your loss
- your money is refunded or your trade-in returned
- you are compensated for any other direct losses from the vehicle’s problems or for being misled
- repairs for the vehicle or new parts
- the dealer taking over your obligations under any credit agreement.
Make a claim(external link) — MVDT
Report the dealer
Motor Vehicle Traders Register (MVTR)
Run by Trading Standards, this holds information about registered traders and their business.
Complain about motor vehicle traders who may be:
- unregistered and trading illegally
- tampering with a vehicle’s odometer
- banned motor vehicle traders still operating illegally.
The MVTR is a register, not a dispute resolution organisation. Complaining to MVTR may help protect other consumers. It cannot help you get your money back, but Trading Standards may ban a seller from the register.
Complaints(external link) — MVTR
Report the trader if:
- you think you have been misled about the vehicle, eg price, quality, kilometres travelled, country of origin
- the vehicle's Consumer Information Notice (CIN) had incorrect information or wasn't there.
Commerce Commission doesn't act on behalf of individuals and can't investigate every complaint. But their investigations do help make sure businesses are complying with the law. Your information helps them assess which consumer issues are causing greatest harm.
Make a complaint(external link) — Commerce Commission