3 April 2007

Improvements proposed to motor vehicle sales laws

Consumer Affairs Minister Judith Tizard has today released two discussion papers which recommend some changes to improve the Motor Vehicle Sales legislation.

“The proposed changes will result in an improved registration system for motor vehicle traders, reduce business compliance costs and unnecessary red tape,” says Judith Tizard.

The two papers reflect the work that has been done by the Consumer Affairs Ministry following their review last year of the 2003 Motor Vehicle Sales legislation.

"The changes proposed would help clarify the different obligations for private sellers compared with the motor vehicle traders. This will directly lead to reduction of compliance costs for private sellers and car market operators."

“Improvements to the operation of the Motor Vehicle Disputes Tribunal will enhance the credibility of an already successful service to consumers, and will also improve people's access to the Tribunal.”

The Minister is also encouraging interested parties and stakeholders to comment on specific proposals to amend the Motor Vehicle Sales Act and Supplier Information Notice (SIN).

"These reviews are an example of government striving to maintain up-to-date and relevant legislation," she says.

"Cars are often people's largest or second largest investment. We want to ensure that consumers have the information they need to make good decisions and a good investment."

“I invite people to consider the proposals presented in these two papers and to make submissions on them."

Submissions close on 14 May 2007.

Background

The two discussions documents are:

• Recommended Amendments to the Motor Vehicle Sales Act 2003
• Recommended changes to the Consumer Information Standards (Used Motor Vehicles) Regulations 2003.

Copies of the documents are available from the Ministry of Consumer Affairs website, or phone (04) 474 2845, or write to Ministry of Consumer Affairs, PO Box 1473, Wellington.

Summary of key proposals in the discussion papers

1. Review of the Motor Vehicle Sales Act 2003 discussion paper

• Simplify the annual motor vehicle trader registration renewal requirements. This will reduce compliance costs on motor vehicle traders.
• Require that a statutory declaration accompany a notification of change of directors or managers of [motor vehicle trading companies]. This will enhance consumer protection by reducing the chances of disqualified persons becoming traders.
• Remove the requirement from car market operators to be registered motor vehicle traders and for private sellers (consumers) at car markets to display a Supplier Information Notice (SIN) (traders will still need to display SINs). This will reduce compliance costs on private sellers and car market operators.
• Extend the jurisdiction of the Motor Vehicle Disputes Tribunal to include breaches by motor vehicle traders under the Credit Contracts and Consumer Finance Act 2003. This will improve consumers' access to redress in situations where traders have also acted as finance brokers.
• Increase the Motor Vehicle Disputes Tribunal limit on claims from $50,000 to $60,000. This will improve access to redress by consumers as many top selling cars retail for between $50,000 and $60,000.
• The Fidelity Fund should not be re-established. Re-establishing a fund would be costly and would not significantly improve consumers' ability to access redress.

2. Review of the Consumer Information Standards (Used Motor Vehicles) Regulations 2003 discussion paper:

• Change Vehicle Year to ‘Year of First Registration’. This is considered to be the most reliable source of information about a vehicle's age.
• Provide information whether the vehicle has a radio receiver capable of receiving 88 to 108 MHz without a band expander. This ensures that consumers can check whether a vehicle's radio receiver is suitable for their needs.
• Clarify the consumer information on the reverse of the SIN to ensure that it is better understood.