How you sell motor vehicles
Keeping records, the Consumer Information Notice, acting as an agent, other consumer law which applies.
Keeping a record of motor vehicle sales
When you sell a motor vehicle you must keep a record of every sales contract for at least six years. The record must include certain information required by regulations made under the MVSA.
This information is:
- the names of the parties to the contract
- the agreed price
- a description of the motor vehicle sold including its VIN (or where no VIN is recorded the chassis number), make, model, and calendar year of manufacture or model year, as recorded on the LTSA Motor Vehicle Register.
The records may be kept in an electronic form as long as they can be retrieved easily. The records can be inspected by the Registrar or the Police.
Consumer Information Standard – Consumer Information Notice
A Consumer Information Notice must be prominently displayed with every used motor vehicle for sale by motor vehicle traders at car markets. Private sellers do not need to display a CIN. Car market operators must take reasonable steps to ensure motor vehicle traders display the Notice.
Registered motor vehicle traders who display used motor vehicles for sale exclusively to other registered motor vehicle traders are not required to display a Consumer Information Notice with these vehicles. A CIN is not necessary in sales between registered motor vehicle traders and licensed car wreckers.
This information disclosure is required by the Consumer Information Standard regulation under the Fair Trading Act.
Information on the Consumer Information Notice is available in the Fair Trading Act section. The requirements of the notice are a Consumer Information Standard under this Act. An example Notice is also available in the Fair Trading Act section.
The Commerce Commission has published a resource for motor vehicle traders.
Go to the Commerce Commission website to view this resource.
Buyer's copy of Consumer Information Notice
You must get written confirmation from the vehicle buyer that they were given a copy of the Consumer Information Notice. This confirmation must be obtained as soon as is practical after the sale. You must keep a copy of every Consumer Information Notice and buyer's confirmation for at least six years.
Acting as an agent or "on behalf"
The MVSA requires that, where you act as an agent for another person (the principal) in the sale by consignment of a used motor vehicle, you must:
- pay the principal all money received for the sale immediately on demand by them, or
- if no demand is made by the principal, within five working days after the money is received from the purchaser.
This duty is subject to any written authority or instructions given to you by the principal.
You are not allowed to use the funds from the sale for the payment of your debts, or to be attached to or taken to execute a court order initiated by a creditor's claim. The money also cannot pass, as part of a bankruptcy, to either the Official Assignee (in the case of individuals) or to a liquidator (in the case of a company).
If you cannot find the principal after making reasonable enquiries, you are still required to pay the money to the principal as soon as you do become aware of their whereabouts.
You must provide the principal with a written account setting out:
- the particulars of the money you received on the principal's behalf in respect of the sale, and
- the manner in which you have applied that money.
You must provide the account on demand or, if no demand is made, within five working days after the sale was completed.
Does consumer law apply to sales by consignment?
Yes. The Fair Trading Act applies to sales by consignment. You must not mislead, deceive or make false representations to either the buyer or seller of a vehicle on sale by consignment. You are also required to display the Consumer Information with vehicles for sale by consignment.
The Consumer Guarantees Act applies to sales of consumer goods where the trader acts as an agent for another trader or for a consumer – this covers sales "on behalf of" or by consignment.
What if I sell by auction or competitive tender?
Auction sales and sales by competitive tender are not covered by the Consumer Guarantees Act.