NZ Consumer Guarantees Act and Motor Vehicle Disputes Tribunal, what they mean for your purchase.
For people coming into New Zealand or anyone unsure of your rights buying a vehicle, we have listed a website address to the Consumer Guarantees Act below for your awareness.
We will discuss, in our opinion, the Consumer Guarantees Act and inform you of the Motor Vehicle Dispute Tribunal process in New Zealand.
The Consumer Guarantees Act to us is a very grey area, as it comes down to what is deemed 'fair and reasonable’.
This is why we believe following our Buy Safe guidelines can eliminate a lot of issues from the start. There is no phone number to call when you have an issue if the dealer is not acting reasonably and of good faith unless they are a member of the New Zealand Motor Trade Association.
Even then the process is very time consuming and to many, very stressful. If you do end up in a situation where you haven’t bought safe or just want to understand where a bad purchase in New Zealand can end up, here are some interesting things to know.
How long does it take to get a hearing?
It all depends on where in NZ the applicant is, in Wellington it takes on average 5-6 weeks to get a hearing, then a decision is not usually for another 2-3 weeks after the hearing. If the vehicle is rejected the customer will then have to wait another 10 days after the decision to get their money back.
In Auckland it takes much longer to get a hearing due to the volume of claims (average 66% of claims in NZ are in Auckland).
How many Tribunals are there in NZ?
The Tribunals can be held at a court anywhere in NZ, the Adjudicators travel to the court, due to this the timeframes for smaller towns can really drag out.
Is there a price cap on their decision?
The Motor Vehicle Disputes Tribunal can award up to a maximum of $100,000, a normal Disputes Tribunal can only do up to a maximum $30,000.
Is there a timeframe the applicant has to make a claim? I.E drives around with check engine light on for 1 month before applying?
As with most things it is a ‘reasonable time’ which is determined by the adjudicator.
Who are the people that make the decisions? Paid full time employees?
There are only 2 Adjudicators for the entire of NZ. One handles from the top of the North Island down to Taupo, the other from Taupo down to Stewart island. So they have a very busy work load.
The Assessors that give technical information to the Adjudicators are paid, but it is not full-time employment.
What team WCD thinks:
We attended a car dealer meeting in 2013 run by a very reputable company. The meeting was about the Consumer Guarantees Act. Many dealers were more interested (and some noticeably excited realising what they can possibly get away with under the Act). We were embarrassed to be involved in the motor trade industry after hearing what we heard, but that’s why WCD does exist. To be a true service focused, quality, documented, transparent dealer that does do things right. Over the years we have resorted to our own standards, purely because the deregulated car market that New Zealand is, has no real standards. The market has become so price competitive at a very real cost to quality and transparency.
The process of returning a car or getting certain faults fixed under the Consumer Guarantees Act isn’t as simple as a lot of people think. Especially when buying a used motor vehicle in transit or out of town (you have no coverage under the Consumer Guarantees Act (CGA) if you choose to purchase through a private sale). There are many things including the age of the vehicle, kilometres travelled and overall condition that are taken into consideration. So, many people will mention the CGA when purchasing a vehicle or after purchasing a vehicle. They do not take into consideration that the CGA is there to protect the seller also. Car dealers are very well aware of what is fair and reasonable.
We actually advise, when issues arise, to go to the dealer and be calm and not to mention the CGA as most dealers will react to how you approach them.
If you have purchased from an MTA dealer you will have more support on your side and a safer process if the dealer you are dealing with proves to be difficult after they have taken your money. But understand that even though dealers are a member of something, that they are meant to stand by a code of conduct or ethics, the number that get audited are very few and far between in New Zealand.
In most cases at the start of an issue the dealer must have the opportunity to put things right under the Consumer Guarantees Act. If the dealer refuses to help or doesn’t help to the level you feel they should be, you should check your rights with the MTA. From there depending on your rights you would need to lodge a claim at the Motor Vehicle Dispute Tribunal. We can only wish you good luck if you haven’t bought safe at this point. Please note that if you have an issue and you get it fixed, the dealer does not have to pay your bill. The dealer has to get the opportunity to asses and fix the issue. If you don’t notify the dealer prior, you will be on your own.
For more information on the New Zealand Consumer Guarantees Act (CGA) you can visit https://www.consumerprotection.govt.nz/general-help/consumer-laws/consumer-guarantees-act/
To understand the MVDT here is an address where you can view outcomes of disputes to help understand your chances in a dispute and the process https://www.justice.govt.nz/tribunals/motor-vehicle-dealer-disputes/
New Zealand Consumer Guarantees Act general overview of the topics covered. This is not intended to be relied upon as legal. Please refer to the above websites for independent advice.
THE CONSUMER GUARANTEES ACT 1993
The Consumer Guarantees Act 1993 places obligations on retailers, manufacturers and service providers. In many cases the obligations also fall on importers and distributors
The Consumer Guarantees Act (CGA) sits alongside the Fair Trading Act and the Commerce Act. It displaced the elderly Sale of Goods Act for consumer transactions and sets out a number of guarantees which are to be implied into transactions involving the supply of goods or services.
A cornerstone of the CGA is the notion of acceptable quality. To be of acceptable quality goods must be:
- Fit for their common purpose;
- Of acceptable appearance and finish;
- Free from minor defects;
There are further guarantees that:
- The supplier has the right to sell;
- Goods are free from undisclosed securities;
- The consumer will get undisturbed possession;
- The goods comply with any description given to them;
- The goods correspond with any sample;
- The price is reasonable;
- Spares and repairs are available for a reasonable period;
- Express guarantees will be honoured.
Services is widely defined. For example, it includes professional, financial, insurance and accommodation businesses, as well as the usual trades and other services such as plumbing or vehicle repair. Services must be:
- Given with due care and skill;
- Given within a reasonable time fit for their purpose;
- Provided for a reasonable price.
The reasonable price guarantee for both goods and services applies, unless price is set out specifically or by formula in the contract.
The key to application of the CGA is the definition of consumer, which means any person who acquires goods or services ordinarily acquired for personal, domestic or household use. Consumer does not include somebody acquiring either goods or services to re-supply, manufacture or repair in the course of trade.
It is not possible to exclude the CGA from true consumer transactions and there are potentially heavy penalties under the Fair Trading Act for businesses which attempt to do so.
However, it is possible to exclude the CGA if a consumer is in fact acquiring the goods or service for the purposes of a business, and the contracting out is acknowledged in writing. For the supplier, this is a very important provision.
The CGA requires a business to be accurate in disclosing the true nature and limitations of goods and services.
Remedies & damages
The CGA emphasises resolving complaints quickly, directly and without involving the Court. Initial remedies against suppliers or manufacturers are:
- Fix or replace;
- Reject and refund or cancel and refund;
- Have someone else fix.
If initial remedies fail, the Courts or the Disputes Tribunal can award damages which can compensate not only for the reduction in value of the goods or services, but also for any consequential loss which was foreseeable.
Reducing the risk
Although it is basically not possible to contract out of the Consumer Guarantees Act, there are steps which all suppliers should take in order to reduce the risk of claims. These include:
- Separate contract documents for consumer and non-consumer transactions;
- Written acknowledgements from consumers who purchase for business purposes and contract out of the CGA for such transactions;
- Specific prices;
- Clear statements if spares and repairs are not available;
- Ensuring that retention of tile clauses are orally drawn to the customer’s attention, and acknowledged in writing;
- Reviewing the adequacy of insurance;
- Reviewing retailers’ rights of redress against manufacturers, importers, wholesalers and distributors.
Most important of all, disclosing to consumers the true nature of goods or services.
A final suggestion from our team
When you enter a dealership look at the place you are visiting, the premises, the people and their website.
If a dealer cannot supply transparent information easily, ask yourself what they will be like when an issue arises. Ask the right questions and be confident with topics in Buy Safe. They are very real.
Compare that with your expectations of quality and assurances and ask yourself how comfortable you are?
Would you be able to go back there and ask for assistance after your purchase?
Do you feel like there is a quality that flows from the photos of the cars on the website, their descriptions, the service and knowledge of the people you deal with, and the actual cars when you finally get to inspect them?
Are you comfortable that every aspect is transparent and every question has been answered quickly and without guile?
We think people should check dealers own testimonial pages against their Google reviews to see if they match up. What a dealer may write themselves or have on their own website can be very different to google review experiences.
Whether it is from Wholesale Cars Direct or another dealer, we really hope we have helped you buy safe.