$28,000 payout for faulty EV
Dealer ordered to pay compensation after electric car fails.
It was a scary moment when John and Margaret Lindsays’ $43,000 electric car suddenly stopped in rush-hour traffic on an Auckland motorway just before Christmas. The dashboard lit up with an ominous “engine failure” warning.
The car would never run again.
However, the real “heart sink moment” was when the Lindsays got an email from the Taupo dealer, Central Motor Group, stating it wouldn’t take any responsibility for the estimated $28,000 cost of replacing the engine.
The couple bought the 2017 Renault Zoe EV from Central Motor Group in December 2017. The dealer didn’t dispute the repair cost, but claimed the Lindsays didn’t have any comeback because of the car’s age.
It also argued the Consumer Guarantees Act (CGA) didn’t apply as the car was bought through the couple’s business and they’d agreed to “contract out” of the act – in other words, agree the act didn’t apply to the purchase.
However, our consumer adviser Maggie Edwards disagreed and recommended the couple take their case to the Motor Vehicle Disputes Tribunal (MVDT).
At the hearing in May, the tribunal adjudicator rejected Central Motor Group’s claim the CGA didn’t apply.
While the Lindsays bought the car through their business, the vehicle was also purchased for personal use and therefore they had grounds to make a claim.
The tribunal also rejected the dealer’s claim the Lindsays had contracted out of the act. Parties “in trade” can contract out of the CGA. However, the couple hadn’t signed the section of the vehicle offer and sale agreement stating the car was being purchased for business use and waiving their CGA rights.
Even if they had signed it, the dealer wouldn’t have been off the hook.
The adjudicator pointed out the CGA “requires any agreement to contract out of its provisions to be fairly and transparently negotiated”. This hadn’t happened in the Lindsays’ case.
The adjudicator found the car wasn’t of acceptable quality. No reasonable consumer would pay $43,000 for a vehicle with an engine that needed replacing just three years and 17,500km later, the tribunal said.
Central Motor Group was ordered to pay for the costs of replacing the vehicle’s engine and towing it home on the day it broke down.
Central Motor Group’s Richard Blakeney-Williams Jr said it had sought advice from the Motor Trade Association (MTA), which advised there were “reasonable grounds” to challenge the claim.
“We took that advice and defended that position in court. As soon as we lost, we paid the Lindsays in full,” Blakeney-Williams Jr said.
The MTA said it was “reviewing the tribunal’s decision carefully to inform the guidance we provide to members and consumers in future”.
The Lindsays have since sold the Renault for parts and bought a new EV.
Filing a claim
You can file a claim in the Motor Vehicle Disputes Tribunal if you’ve bought a vehicle from a registered motor trader and are claiming less than $100,000. If you’ve bought from a private seller, you’ll need to go to the Disputes Tribunal.
You need to have written to the trader first, setting out what you want and why. If you don’t get a satisfactory response within a reasonable time, you can pay $50 to make a claim in the MVDT. Hearings usually take place a couple of months after a claim is filed.
How do I get help?
As Consumer NZ members, the Lindsays were able to access our Consumer Advice Line. If you’re a member and have a faulty product, received shoddy service or been misled by a retailer, you can contact one of our advisers for help.
Visit our Consumer Advice Line page for more information about this service.