Discussion Paper: Review of the Consumer Information Standards (Used Motor Vehicles) Regulations 2003

May 2006

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1. Introduction

The Motor Vehicle Sales Act 2003 (MVSA) came into force in December 2003. This legislation made fundamental changes to the way motor vehicle sales were regulated. Registration of motor vehicle traders replaced licensing and eligibility criteria were broadened. Government agencies, rather than the industry itself, were charged with administering and enforcing the regime. Also new information disclosure requirements were introduced in the form of a Consumer Information Standard under the Fair Trading Act 1986. The Supplier Information Notice, commonly known as the SIN, is the major legislative instrument for information disclosure for motor vehicle sales.

Section 163 of the MVSA required the Ministry of Consumer Affairs to undertake a review of the operation of the MVSA within two years, and to report back to the Minister with recommendations on whether any amendments were needed.

The review report of December 2005 found the SIN concept remains sound. It provides consumers with essential and meaningful details about a particular motor vehicle and helps them transact with confidence. There are concerns, however, that the SIN attempts too much and that this makes it less effective as a source of information.

There were also concerns about sellers not complying with the requirement to display a SIN card. This relates mainly to vehicles sold at car fairs and over the internet. The review identified a need to clarify the obligations to display the SIN and where those responsibilities lay.

The review report acknowledged the many different viewpoints and concerns regarding the SIN. It said proposals to address the concerns raised need to be developed more fully and industry and consumer interests consulted. The report recommended an early and comprehensive review of the regulations that govern the SIN: the Consumer Information Standards (Used Motor Vehicles) Regulations 2003.

This paper discusses the concerns raised during the review. It provides an opportunity for interested parties to help improve the information requirements for consumers in relation to the sale of motor vehicles.

The other recommendations made in the review not relating to information disclosure will be addressed over the next six months.

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