Buying from an auction

Buying a vehicle from an auction

All auctioneers who sell motor vehicles must be registered as motor vehicle traders and they must attach a Consumer Information Notice to every used vehicle they sell.

How to check if money is owed on the vehicle.

Be Aware

The Consumer Guarantees Act does not cover vehicles sold at auction or by tender. This means when you buy at an auction or by tender you have much less protection.

Quality of the vehicle

Some auctioneers offer vehicles for sale which have been mechanically checked.

Make sure you know how thorough the check is. If it as not as thorough as you would like, arrange for an independent mechanical check.

Some auctioneers also sell break-down insurance or extended warranties. If you agree to buy this, check the terms and conditions of the warranty or insurance.

Ask:

• what parts and problems does it cover?
• what does it exclude?
• do you have to pay an excess on any
• claims? If so, how much?
• what are the rules about servicing?

Many warranties say you must get the vehicle regularly serviced at certain mechanics. Will you be able to do this? Check whether the warranty or insurance will become invalid if you use another mechanic.

Sham tenders

A trader can not use a ‘sham tender’ to get out of responsibilities under the Consumer Guarantees Act. There must be actual competition between buyers for the sale to be excluded.

If things go wrong – your legal protections

Fair Trading Act

The auctioneer cannot mislead or deceive you, or make false representations about the vehicle. This means that everything on the Consumer Information Notice must be true and correct, and anything the auctioneer tells you about the vehicle must also be true (this includes adverts, signs on the car, and statements made by the auctioneer).

The Fair Trading Act gives you the right to claim compensation from the auctioneer, if you were misled or deceived about the vehicle.

See here for more information on your rights after buying a motor vehicle.

If you have been misled by the auctioneer you can report this to the Commerce Commission. Contact:

Telephone: 0800 943 600 or email.

Sale of Goods Act

Under the Sale of Goods Act the vehicle needs to be of merchantable quality and fit for its purpose – that is, the vehicle is reasonably roadworthy and in a good enough condition to be sold.

The auctioneer must also have the right to sell the vehicle. If these guarantees are not met you may have a right to a refund, partial reimbursement or compensation.

Be Aware

Auctioneers can contract out of the Sale of Goods Act at the time of sale. They may do this by making a statement at the auction or posting a notice in the auction rooms that the Sale of Goods Act does not apply.

Online auctions

The Fair Trading Act applies to all traders. They can’t mislead, deceive or make a false statement. Check the terms and conditions of the seller and the website to see how the law applies.