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

May 2006

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2. Background - Key Elements of the Legal Requirements

The information disclosure requirements relating to the sale of used motor vehicles are found in two pieces of legislation. The relevant provisions are sections 14 to 18 and sections 101 to 102 of the Motor Vehicle Sales Act 2003 (MVSA) and the Consumer Information Standards (Used Motor Vehicles) Regulations 2003 made under the Fair Trading Act 1986, commonly known as the SIN regulations. The regulations say a SIN notice must be displayed with any used motor vehicle offered for sale by a motor vehicle trader or through the facility of a car market operator.

Certain Details Must Be Provided

The SIN relates to used motor vehicles only. It contains detailed information about the particular motor vehicle offered for sale as well as general consumer information about buying a motor vehicle. The SIN includes such details as the vehicle's age, usage, make and model and whether another person has a security interest in it. A sample notice is attached as Appendix One.

Traders' Responsibility to Provide SIN

When motor vehicles are physically displayed for sale, the SIN must be attached in a prominent position that makes it clearly visible from outside the vehicle. (This requirement is set out in section 14 of the MVSA and is not under review in this paper. An opportunity to review the specific application of this requirement to motor cycles will be provided in consultation planned to occur later this year dealing with MVSA amendments.)

A SIN is also required for vehicles on display or for sale on the internet (where a contract for sale may be entered into online). The SIN (or access to it, for example, through a hypertext link) must be clearly and prominently displayed on the same web page as the offer, and the contract for sale, relating to that vehicle.

Acknowledgement of SIN

A buyer needs to acknowledge in writing that they have received a copy of the SIN. The motor vehicle trader is responsible for obtaining this whenever he or she is a party to, or acts as an agent for a party to, a contract for sale. The acknowledgement must be obtained immediately before the sale of the vehicle, or - in the case of a car auctioneer - as soon as practicable after the sale.

Keeping Records

The trader must keep a copy of the SIN and its acknowledgement for six years and make these available for inspection on request of the Motor Vehicle Trader Registrar.

Penalties and Offences

Failure to comply with the requirement to provide a SIN, and the information required in the SIN, is a breach of section 28 of the Fair Trading Act 1986 and attracts a maximum fine of $60,000 for individuals and $200,000 for companies. Failure by a car market operator to take reasonable steps to ensure a consumer selling through them attaches a SIN is an offence under the MVSA and attracts a maximum fine of $2,000. This is also an infringement offence.

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