BILL UPDATES CAR BUYING

  • Tony Ryall
Associate Minister of Justice

"The Motor Vehicle Dealers Bill takes car buying out of the 1970s and brings it into the 1990s," Associate Minister of Justice Tony Ryall said today.

The Bill replaces the Motor Vehicle Dealers Act 1975.

"There have been considerable changes in the motor vehicle dealer market in the 23 years since the 1975 Act was passed. New Zealanders have much greater access to a broader range of cars that cost a lot less thanks to the relaxation of import controls and tariffs," Mr Ryall said.

"The last 23 years have also seen the development of the Fair Trading Act, the Consumer Guarantees Act, and the Motor Vehicle Securities Act which have provide greater protection for consumers."

Mr Ryall said that given these changes, it was timely to take another look at the regulatory regime for motor vehicle dealers.

"Under changes proposed by the Bill, car buyers who have been ripped off will be able to take their claims directly to the Motor Vehicle Disputes Tribunals, rather than having to seek a referral through the Motor Vehicle Dealers Institute as at present.

"The Bill also widens the jurisdiction of the tribunals. Currently, the tribunals have no jurisdiction to determine disputes involving the application of the Fair Trading Act, nor to determine claims under the Sale of Goods Act or the Consumer Guarantees Act unless both parties agree ? and I have been told that agreement is rarely obtained. At present, the only alternative for car buyers is to go to the District Court.

"The Bill proposes that the tribunals hear disputes under the Sale of Goods Act, the Fair Trading Act and the Consumer Guarantees Act as of right. For car buyers, these changes will save time and money ? their complaints will be heard under one roof.

"For the industry, the Bill provides specific criteria on who can be a licensed car dealer and simplifies a complex registration process.

?People with certain convictions under the Crimes Act, Misuse of Drugs Act or the Fair Trading Act, or people who have been barred from managing a company under the companies legislation for example will not be eligible to apply for a licence under the new regime.

"The Bill also gets rid of the requirement for taking out public notices -- which in practice accomplished little more than a boost to the coffers of the classified section of newspapers.

"Under the current system, some 3,500 salespeople take out public notices every year in local newspapers to become licensed salespeople. Yet, over the last three years, only five objections have been made -- and two of those came from other licensed dealers.

"The Bill also increases the penalty for odometer tampering by a licensed motor vehicle dealer from the current $1,000 -- which is hardly a deterrent -- to a much stiffer maximum fine of $10,000.

?The reforms in the new Bill will result in a simpler, less costly licensing regime while, at the same time, providing for consumer rights."

The Motor Vehicle Dealers Bill was referred to the Commerce Select Committee for consideration.