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13 March 2017

Opinion: On the highway to help

Know your rights when buying a car from a dealer.

If you’re in the market for a car, you’ve probably seen the flurry of ads enticing punters to pick up the latest model on finance deals from as low as 1%.

We regularly see the other side of the flashy marketing — the problems that happen when your new set of wheels turns out to be a dud and the dealer doesn’t want to know.

The Motor Vehicle Disputes Tribunal, the specialist body set up to handle car complaints, dealt with 342 cases last year, a 33% rise from 2015.

Its case notes reveal the typical problems consumers run into when dealers think they don’t have any liability for vehicles that aren’t of acceptable quality.

In one case, a Hamilton couple bought a second-hand Mazda CX-5 for $23,000 from an Auckland dealership. About five months after purchase, they were on a road trip when they noticed coolant leaking from the engine.

They took their car to a nearby mechanic who suspected head gasket problems and warned them not to drive the vehicle. The couple had to pay for the car to be shipped home and got it assessed by their local mechanic. The verdict was the engine needed to be replaced at a cost of up to $12,200.

The Auckland dealer who sold them the car didn’t want to know and claimed it had no liability.

The Motor Vehicle Disputes Tribunal disagreed. It found the $23,000 car wasn’t of acceptable quality under the Consumer Guarantees Act (CGA) and ordered the dealer to refund the purchase price, pay consequential losses and arrange for the vehicle to be collected.

If you buy a new or second-hand car from a dealer, you have rights under both the CGA and Fair Trading Act (FTA).

The CGA obliges dealers to guarantee their vehicles are of acceptable quality and fit for purpose (given their age and sale price).

When it’s a minor problem, the dealer can choose between fixing the car, replacing it, or taking it back and giving you a refund. If the dealer can’t or won’t fix the problem within a reasonable time, you can demand your money back.

If it’s a serious problem, you can choose whether the dealer replaces the vehicle, or takes it back and gives you a refund.

You can also claim for losses that occur because of the fault. For instance, you can claim towing costs if your broken-down car needs to be shipped home.

The FTA also prohibits dealers from making misleading claims about their vehicles. For instance, a dealer can’t advertise a car as “low mileage” if it has done enough kilometres to get to the moon and back.

If the dealer won’t play ball, you can lodge a claim with the Motor Vehicle Disputes Tribunal for $50. It can hear claims up to $100,000 (or more if both parties agree) and order the dealer to remedy the problem.

For more information about your rights when buying a car, see our car buyers’ rights report.

By Sue Chetwin

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