Review of the Operation of the Motor Vehicle Sales Act 2003: Report Presented to the House of Representatives Pursuant to Section 163 of the Motor Vehicle Sales Act 2003

March 2006

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Appendix Two: Motor Vehicle Sales Act 2003 Monitoring Report (for Period 16 December 2003 to 30 June 2005)

Research, Evaluation and Monitoring
Research, Information and Capability Group
Ministry of Consumer Affairs
Level 5, 33 Bowen St., PO Box 1473
Wellington

July 2005

Executive Summary

This report summarises the key findings of the monitoring report on the Motor Vehicle Sales Act 2003 for the period 15 December 2003 to 30 June 2005. The monitoring report is based on administrative data from the Ministry of Justice's Motor Vehicle Disputes Tribunal, Companies Office's Motor Vehicle Registry and other secondary data sources (i.e. New Zealand Customs, Land Transport New Zealand, Citizens Advice Bureaux and Consumer Affairs' Heat database) and identifies key trends on the operation of the Act.

The intent of the monitoring report is to provide background information on the report to the Minister regarding the operation of the Act, which is due on 15 December 2005. The report is intended to draw attention to issues and questions that may warrant further research or evaluation, rather than providing an in-depth analysis of the impact of the Act to motor vehicle consumers and traders.

Motor Vehicle Disputes Tribunal (MVDT)

A total of 390 motor vehicle disputes were filed at the MVDT during the first 18 months since its regulation on 15 December 2003. Of these, 234 were filed in 2004 and 156 in the first half of 2005. Of the 234 cases in 2004, 232 are now resolved with only 2 remaining to be heard by an adjudicator. Of the 156 disputes in January-June 2005, 25 are yet to be decided by the MVDT.

Motor vehicle disputes filed at the Motor Vehicle Disputes Tribunal (MVDT) registered a 58 percent increase during the first half of 2005 compared to same period in 2004. That is, in January to June 2005, 156 disputes filed compared to 99 for same period in 2004.

The number of disputes settled before the hearing date is a little less than a third (32 percent of 363 resolved or 116) of all resolved disputes in January 2004 to June 2005. That is, of every 10 motor vehicle disputes filed, 3 were withdrawn by the purchaser prior to the hearing date due to an out-of-court settlement with the motor vehicle trader. In January to June 2005, 42 of the 156 disputes were already withdrawn prior to hearing.

Registered Motor Vehicle Traders

As at 30 June 2005, registered motor vehicle traders total 3,182 including 101 undergoing the renewal process and 37 that are pending expiry and cancellation.

Pursuant to the data matching obligations of the Act, the Companies Office cross-matched motor vehicle importers and RMVT data and found that 154 importers had not registered. As of December 2004, 39 were referred to the National Enforcement Unit (NEU) with 1 being considered for prosecution. On 1 April 2005, an additional 41 importers were unregistered with 26 failing to respond to warning letters from the Companies Office.

As at 30 June 2005, the NEU received 159 complaints regarding breaches of the Act.

Supplier Information Notice (SIN)

The Commerce Commission is monitoring enforcement of the SIN. As a result of inspections of 89 premises in the Auckland, Wellington and Christchurch areas in July 2004, the Commission reported significant non-compliance with the requirements under the Fair Trading Act. Although the Commission has undertaken further inspections since that time, the data is not available for the purposes of this report.

Odometer Tampering

The National Enforcement Unit of MED obtained one conviction relating to odometer tampering. Mark Gregory was convicted in the Hamilton District Court under section 99 of the Motor Vehicle Sales Act 2003 - the section prohibiting Odometer tampering. He was ordered to pay a fine of $2000 plus $130 court costs as well as the $2000 the MVT estimated it had lost as a result of the tampering. Mark Gregory is on the Banned Persons list and cannot register as a motor vehicle trader for 5 years from his conviction date. Further allegations of odometer tampering are currently under investigation.

Conclusions

Operational data analysis on the Motor Vehicle Disputes Tribunal, Motor Vehicle Traders Registry and prohibition of odometer tampering appear to show that the mechanisms are working. Robust evidence monitoring SIN compliance by the Commerce Commission is not available.

1. Introduction

Section 163(1)(2) of the Motor Vehicle Sales Act 2003 (the Act) provides:

(1) The Ministry must, no later than 2 years from the date of commencement of this Act,-

(a) review the operation of this Act since its commencement; and

(b) prepare for the Minister a report, of the review that includes recommendations on whether any amendments to this Act are necessary or desirable.

(2) In preparing the report, the Ministry must consult with interested parties, including representatives of consumer interests in relation to motor vehicle sales.

Section 163(1)(2) of the Act thus instructs the Ministry of Consumer Affairs to:

• review the operation of the Act;
• engage in a formal consultation with interested parties, including consumer organisations; and
• prepare a report to the Minister of Consumer Affairs that includes recommendations on whether amendments to the Act are necessary or desirable.

The first requires Ministry of Consumer Affairs to determine whether the main instruments of the Act are in place and are "operating" in the way the Act intended. This entails a monitoring exercise of the main instruments. The second aspect, the formal consultation with stakeholders, will elicit views regarding the operation of the Act and address questions as to whether the Act meets the requirements of the motor vehicle traders and consumers. Both aspects will inform the evaluation report to the Minister.

The legislative principles and mechanisms to achieve outcomes are in Table 1.1 below:

Scope of the Review of the Operation of the Act

The review of the operation of the Act focuses on three core mechanisms or instruments put in place by the Act. They are:

• Supplier Information Notice (SIN), which must meet the disclosure requirements found in Ss 14 - 15 of the Act;
• Motor Vehicle Trade Register (MVTR), operating in accordance with Part 3 of the Act and also monitoring whether or not the enforcement provisions found in Part 4 of the Act are operating, and the
• Motor Vehicle Disputes Tribunal (MVDT) in accordance with the provisions in Part 4 of the Act.

In respect of these three core (operational) elements of the Act, the review principally involves monitoring exercises. Monitoring predominantly involves the collection of data, which aim to answer a range of questions relating to the operation of the Act in terms of the SIN, MVTR and MVDT. The collection of administrative data will thus provide a picture of the extent to which the above mechanisms of the Act are effectively in place.

Primary data pertaining to the three mechanisms / instruments were collected from agencies charged with each respective task. The agencies are:

• Commerce Commission - ensure that the particulars prescribed by regulations made under s27 of the Fair Trading Act are disclosed;
• The Registrar, MVTR - ensure that applications for registrants meet the requirements of Part 3, and that enforcement of the Act is carried out in accordance with Part 4 of the Act;
• MVDT, Ministry of Justice - ensure that the Motor Vehicle Disputes Tribunal is operating in accordance with Part 4 and with the procedures set out in Schedule 1 of the Act; and
• New Zealand Customs - ensure that the information sharing provisions of Ss120 - 121 are met.

Secondary data were collected from Citizens Advice Bureaux and from the Ministry's own database of queries received from consumers and community agencies. This secondary data provide an important additional consumer perspective on the operation of the Act.

2. Motor Vehicle Disputes Tribunal (MVDT)

Tables 2.1-5 present the status of motor vehicle disputes lodged at the Motor Vehicle Disputes Tribunals (MVDT) during the last 18 months beginning in 2004 to the second quarter of 2005.

Of the 390 motor vehicle disputes filed in 2004 and first half of 2005, 363 were resolved and 27 were unresolved as at end of June 2005.

(Source: Ministry of Justice)

Of the 363 resolved disputes, 116 (or 32%) were withdrawn as a result of a settlement being reached between the parties. The balance of 247 claims went to hearing. Of these, 96 were dismissed by the Tribunal and 64 contracts were rescinded, with 36 claimants receiving compensation as well as rescission of their contract.

The Tribunal has jurisdiction to hear claims involving amounts up to $50,000. To date, the Tribunal has made orders refunding $42,000 to one consumer and rescinding the purchase of a vehicle priced at $43,990 for another. In the latter case the consumer was ordered to compensate the dealer $7,000 for lack of care.[3]

As at 30 June 2005, 27 disputes awaiting resolution at the MVDT, 2 were filed in 2004 and 25 in 2005.

(Source: Ministry of Justice)

The 247 resolved disputes took an average of 4 months and 17 days from the date a claim was filed until judgment was issued. The transition to the MVSA has meant that the Motor Vehicle Disputes Tribunal convened under the previous legislation continued to hear claims until December 2004. By 31 March 2005 all claims under the previous legislation have been resolved.[4] The data reported here relates only to the Motor Vehicle Sales Act.

Previously, the Motor Vehicle Dealers Act 1975 (MVDA) required claims to be first lodged with the Motor Vehicle Dealers Institute. Only after attempts to resolve the complaint through that agency had failed, was the claim forwarded to the Tribunal. The time it took to forward a claim to the Tribunal under that regime is not known.

The Tribunal appears to be working well, the range of Orders made (see Appendix 2) reflects the enhanced jurisdiction of the Tribunal to hear claims brought under the Consumer Guarantees Act and Fair Trading Act. An increase in claims was expected as consumers can now access the MVDT directly and the Act now covers traders such as wholesalers, auctioneers and car fair operators. Early figures (156 in January-June 2005 vs 99 in January-June 2004 or an increase of 58%) for 2005 indicate that the Tribunal is being accessed by more consumers.

Note: Other Tribunals in 2004 include Christchurch, Hamilton and Wellington.

(Source: Ministry of Justice)

More than half of the 390 disputes heard were filed at the Auckland MVDT.

Of the 390 disputes, 336 or 86% of claims raised quality issues, 8% (33) were disputes concerning both quality and misrepresentation; 4% (16) misrepresentation; and 1% (5) other issues.

Of the 336 claims regarding vehicle quality, 274 claimed mechanical fault, 62 others ranges from structural fault, mechanical and structural, alleged incorrect odometer reading, rust, wrongly issued Warrant of Fitness, wrong registration details and undisclosed security interest.

3. Registered Motor Vehicle Traders (RMVT)

Motor Vehicle Traders' Registry

Prior to the Motor Vehicle Sales Act 2003 taking effect, it was estimated that around 3,000 motor vehicle traders operated in New Zealand. About 2,250 registered under the Motor Vehicle Dealers Act (MVDA). Other traders (i.e. car market operators, importers, car auctioneers and car consultants) were not required to register under the previous legislation (MVDA 1975).

All motor vehicle traders were given a transition period to register until 15 March 2004. At that date, of the total 3,372 applications 1,652 had completed the registration process. Motor vehicle traders have the option of registering online through the Motor Vehicle Traders Register [link to MVTR website]. As of June 2005, 70% of registrants had taken advantage of this option.

Dealers that completed registration reached 3,166 in October 2004. On 31 March 2005, this figure dropped to 2,523; in addition 555 were in the process of renewing their registration. This translates to 54% of 5,745 applications received by the end of March. As of end of June 2005, there are 3,044 (48% or total registrations) completed their registration, 101 are in the process of renewal, and 37 are pending expiry or cancellation.

Eighty-one percent of motor vehicle traders registered as a company and 19% registered as individuals. Approximately 79% of applications received in the first half of 2005 are motor vehicle dealers or retailers. The first half of 2005 shows an increase of 211 completed registrations over the same period in 2004. (Succeeding tables provide more detailed information obtained from the Registrar of Motor Vehicle Traders.)

(Source: Registrar of Motor Vehicle Traders)

Table 3.2 details the principal business type of registered motor vehicle traders.

(Source: Companies Office, MED)

Table 3.3 shows the geographical spread of registered traders

(Source: Companies Office, MED)

Enforcement and Compliance

Registration

Compliance is a key component of the successful implementation of the Act. Compliance with the Act is monitored by the National Compliance Unit of the Ministry of Economic Development. Carrying on the business of motor vehicle trading without being registered carries a penalty of up to $50,000 for an individual and up to $200,000 for a company, per offence.

The process used by the Registrar is as follows:

• Contact is made with the identified party inviting registration as a trader and reminding them of their obligation to register.
• If no response is received by a prescribed date, a follow-up letter is sent.
• The matter is referred to the National Enforcement Unit (NEU) for further action should non-registration continue.

Pursuant to section 120 of the Act, the Registrar may seek disclosure of information from Customs to identify persons importing more than 3 motor vehicles within a specified period. Using this power the Registrar identified154 motor vehicle traders unregistered at December 2004, follow up action by the Registrar resulted in:

• 16 registered after receiving a warning letter;
• 33 were registered under different names;
• 41 advised that they do not meet the definition of a motor vehicle trader and are therefore not required to register;
• 25 did not respond; and
• 39 were referred to the National Enforcement Unit for further action. Of these, 20 registered, 4 are in the process of registering, 14 have ceased trading and 1[5] was prosecuted.

In April 2005, a further 41 unregistered importers were sent warning letters. Their status at June 2005 is as follows:

• 1 had completed registration;
• 1 was registered under a different name;
• 7 are in the process of registering;
• 6 advised that they did not meet the definition of a motor vehicle trader and were therefore not required to register. Investigation has resulted in 2 importers being notified that they were traders within the meaning of the Act; and
• 26 have not responded.

Investigators from NEU also visited 67 car yards throughout the country in response to referrals from the Compliance Section of the Companies Office and during the course of conducting general enquiries. Car yards and car fairs[6] were visited and illegal traders were identified and are now either registered or in the process of registering.

Complaint Investigation Received from the Public

The Registrar received complaints from registered traders and the public regarding breaches of the Act. Since 15 December 2003 until March 2005, MED received 82 complaints. The result has been:

• 29 traders were required to register;
• 15 complaints were referred to the Ministry's Legal Unit;
• 16 complaints were referred to National Enforcement Unit; and
• 22 cases are awaiting investigation.

As at 30 June 2005, MED has received 159[7] complaints.

4. Supplier Information Notice (SIN)

Compliance

The Commerce Commission is responsible for ensuring that Motor Vehicle Traders comply with the consumer information standard prescribed by regulation under the Fair Trading Act. The Regulation sets out the information that must be contained in a Supplier Information Notice.

As a result of inspections of 89 premises in the Auckland, Wellington and Christchurch areas, in July 2004, the Commission reported significant non-compliance with the requirements under the Fair Trading Act.[8] Although the Commission has undertaken further inspections since that time, the data is not available for the purposes of this report.

5. Odometer Tampering[9]

The National Enforcement Unit (NEU) is responsible for ensuring that the requirement of section 13 (Tampering of odometers prohibited -) is met. Since 15 December 2003, NEU has received 2 complaints alleging odometer tampering.

The cases involve second-hand imported motor vehicles and therefore require coordination of any investigation with overseas agencies used to establish whether an offence was committed in New Zealand or overseas. The investigations are continuing.

As of June 2005,[10] MED's National Enforcement Unit obtained the first conviction for odometer tampering under the new Act. The provisions enforced by the National Enforcement Unit are sections 95-119, which relate in part to unregistered traders and odometer tampering. Mark Gregory was convicted in the Hamilton District Court under section 99[11] of the Motor Vehicle Sales Act 2003 - the section prohibiting Odometer tampering. He was ordered to pay a fine of $2000 plus $130 court costs as well as the $2000 the MVT estimated it had lost due to tampering. As a result of the conviction, Mark Gregory is recorded on the Banned Persons list and is unable to register as a motor vehicle trader for 5 years from his conviction date.

Further files are currently under investigation with allegations on Odometer Tampering.

6. Other Motor Vehicle Related Statistics

The statistics reported in this section provide further contextual information relevant to the motor vehicle trade in New Zealand. This section also reports on consumer information received from the New Zealand Association of Citizens Advice Bureaux, and an analysis of MVSA related calls to Ministry of Consumer Affairs' call centre captured by the Ministry's "iHEAT" database.

Consumer Expenditures[12] on Motor Vehicles

Statistics New Zealand reported that the average household weekly expenditure on motor vehicles increased to $49.20 in 2003/2004 compared to $37.40 in 2000/2001. The $49.20 includes $44.40 for the purchase of motor vehicles and $4.80 on credit costs, which relate to the purchase of the motor vehicle.

Motor Vehicle Retail and Wholesale Industry

Seasonally adjusted motor vehicle retail sales generated an estimated $8,276 million in 2004. In January to March 2005, motor vehicle retail sales posted $2,111 million. This is a slight 0.5% increase compared to $1,911 million for the same period in 2004.

Motor vehicle wholesale trade posted a 4.5% increase in 2004 ($6,849 million) compared to 2003 ($6,551 million). During the first quarter of 2005 there was a slight increase in trade of 1.9% over the same quarter in 2004.

Car Registrations

Table 4.1 is a monthly comparative count of first-time car registration data from Land Transport New Zealand from 2004 to June 2005. In 2004, first-time car registrations totalled 228,797.

(Source: Land Transport New Zealand)

LTNZ car registrations for the first half of 2005 (114,908) registered a negligible -0.2% drop to 114,908 compared to same period in 2004.

(Source: New Zealand Customs)

Importation of Motor Vehicles

Motor vehicles remain the top commodity imported to New Zealand.[14]

In 2004,[15] New Zealand Customs reported 236,096 imported motor vehicles to New Zealand, where 67% are used cars and 33% are new. The 2004 import posted a 10.6% increase compared to 213,465 imported cars in 2003. Eight of every ten cars imported were from Japan.

Total number of motor vehicles imported to New Zealand increased by 31.5% during the first half of 2005 (167,116) compared to the same period in 2004 (127,104).

Car Licensing[16]

In June 2004, there were 2,118,240 cars licensed in New Zealand. An increase of 4% compared to 2,036,804 in 2003 and 7.5 % increase compared to June 2002 (1,970,403 licensed cars). That is, an estimate of 6 for every 10 New Zealander aged 15 years and older has a car in 2004.[17]

In 2004, 815,252 cars were sold, wherein 28.35% were purchased from the motor vehicle trader (or 7 of every 100 New Zealand estimated population aged 15 years and older purchased their car from a motor vehicle trader).

Citizens Advice Bureaux

Nature of MVSA 2003 Enquiries Lodged at Citizens Advice Bureaux

The national Association of Citizens Advice Bureaux and the Ministry of Consumer Affairs initiated a limited monitoring exercise of enquiries related to the Motor Vehicle Sales Act 2003 in September 2004 to March 2005. During the monitoring period, CAB received a total of 150 enquiries. Of these:

• 43% (64) of enquiries were made through the North Region CAB;[18]
• 75% (113) were phoned by callers;
• 89% (133) vehicles were purchased from motor vehicle retailers or dealers and 6% (9) from car fairs or through auctions;
• 64% (109) of enquiries were related to mechanical problems or faulty vehicles that were purchased;
• 65% (97)of clients called on CAB to seek advice on problems encountered;

With respect to the Supplier Information Notice, the following are the results:

• 59% (89) said that SIN were displayed in cars, 21% (31) had no SIN at time of purchase and the remaining 20% (30) were not aware whether there was a SIN displayed or not;
• Of 89 cars believed to be purchased with SIN, 66% (59) were considered compliant and 13% (12) were non-compliant;
• 13% (12) of the non-compliant said that the misleading information include; odometer reading (2), country last registered (1), WoF details (2), re-registration details (1), cash price (1) and others (6).
• 52% (78) said that they received a copy of the SIN when they purchased the vehicle, 23% (35) did not receive a copy and 25% (37) were not aware whether a copy was given or not.
• Of the 35 (23%) who did not receive a copy of the SIN, 18 addressed the issue with the motor vehicle trader, 15 did not and 2 were ambivalent;
• Also, of the 35 (23%) who did not receive a copy of the SIN, 4 brought the non-compliance issue with the Commerce Commission and 22 did not.

Motor Vehicle Disputes Tribunal:

• 82% (123) of the 150 motor vehicle-related enquiries were able to be referred to the Motor Vehicle Disputes Tribunal.
• Of the 123 enquiries that could have been referred to MVDT, 15 were referred and the remaining 105 were not.
• Of the 105 enquiries that were not referred to MVDT, 73 were referred back to the motor vehicle trader.

Information and options provided by CAB to clients with motor vehicle enquiries:

• 48% (72) advised to go back to the motor vehicle trader and settle case with them;
• 43% (64) advised to file case with the Motor Vehicle Disputes Tribunal;
• 35% (52) given pamphlets and brochures related to the Consumer Guarantees Act and/or Motor Vehicle Sales Act;
• 3% (4) advised to seek further advice from MTA, AA or an independent mechanic; and
• 3% (5) advised to seek advice of a lawyer.

Ministry of Consumer Affairs' Call Centre

The Ministry's Call Centre received a total of 587 MVSA 2003-related calls (or 2 calls a day) from April 2004 to June 2005. Quarterly log as follows:

(Source: Ministry of Consumer Affairs' iHEAT Database)

7. Issues

During the course of the monitoring exercise, a number of issues were raised about the operation of the Act. Documenting them here has the purpose of ensuring that they are not overlooked during the consultation process and enables Ministry of Consumer Affairs to detail the response of relevant agencies to date.

Issue No. 1: Registration

In November 2004, an industry member queried why statutory declarations are required as part of the annual renewal of motor vehicle trader registration. To illustrate how onerous such a requirement is, an example is used of 12 companies operated by the same parent company. In such a case there are multiple directors, each of whom is required to provide a statutory declaration. If some are non-resident, it is argued that obtaining the declaration is made significantly more difficult and costly.

Ministry's Response

The Ministry of Consumer Affairs has responded by stating that the statutory declaration requirement is an important element in ensuring the accuracy and truthfulness of registration applications. The Ministry goes on to confirm that one of the purposes of the planned review is to identify areas where unnecessary costs can be eliminated.

Case 1

A registered motor vehicle trader, Tim Whittle, was recently convicted and sentenced to imprisonment after admitting to false pretences and obtaining by deception charges. MED and Ministry of Consumer Affairs were required to respond to criticism in the media and from industry as to why Mr Whittle was able to register as a Motor Vehicle Trader despite a previous conviction. Industry also noted that Mr Whittle was declined a licence when he applied for one under the previous legislation (Motor Vehicle Dealers Act 1975).

There has been much discussion about this case in the media over the past year. In summary, MED has responded by stating that the registration process is not able to guarantee that a trader is ethical or honest. That Mr Whittle now has convictions, which effectively ban him from motor vehicle trading, is proof that the Act and its enforcement provisions do work. Ministry of Consumer Affairs has noted that despite Mr Whittle being refused a licence under the previous law he had continued unlicensed trading without impediment.

Case 2

A motor vehicle trader has raised a concern that as they sell motorcycles, they are required to register under the MVSA and under the Second Hand Dealers and Pawnbrokers Act 2004.

Issue No. 2: Road-Side Selling

An Industry body has raised this issue with MED and the Minister of Consumer Affairs. The issue appears to be that local RMVT believe that an uneven playing field is being created by other RMVT selling vehicles from a community area without having to face the same costs as local traders, and without displaying SIN as required by the Act. There were also concerns that other individuals were in effect, operating as unlicensed dealers from the same community area.

The final area of concern was that the local Council, as owner of the community area, should be required to register as a MVT.

Ministry's Response

MED undertook an investigation of the illegal trading concern, as a result one person was identified and the Ministry accepted that they were not operating illegally. Currently, the MVSA does not prevent registered traders from selling vehicles at any site.

The issue of non-compliance with the Fair Trading Act requirements regarding the SIN have been passed onto the Commerce Commission for investigation.

Crown legal advice is that the Council concerned is not a "motor vehicle trader" as currently defined by the MVSA. The issue of whether Council or community property can be used for road-side vehicle sales is outside the ambit of the MVSA.

8. Appendix: Glossary

Address for service

Means the address of a place in New Zealand at which notices or documents that are required to be served under this Act may be served on the person giving the address

Adjudicator

Means an adjudicator of a Disputes Tribunal appointed under section 83

Banned person

Means a person banned from participating in the business of motor vehicle trading under section 68 or section 69

Car auctioneer

Means a person who conducts sales by auction of motor vehicles

Car consultant

Means a person who, for rent, fee, commission, or other valuable consideration, is engaged by any other person (except by a motor vehicle trader) to act as an agent for that other person on any matter that -

1. a) relates to the sale or purchase of any motor vehicle by that other person; and
2. b) does not relate solely to the structural, material, or mechanical condition of the motor vehicle

Car market operator

1. a) means a person -
   1. i) who carries on the business of providing any premises or place for a market for the sale by other persons of used motor vehicles (whether or not the vehicles are subject to a bailment to the operator); and
   2. ii) who operates any facility (for example, an internet web page) for the primary purpose of facilitating the sale of used motor vehicles (which sale is completed through, or by means of, that facility); and
2. b) includes a person who is commonly referred to in the motor vehicle trading industry as a car fair operator or a display for sale operator.

Company

Has the meaning given to it by section 2 (1) of the Companies Act 1993

Disputes Tribunal

Means a Motor Vehicle Disputes Tribunal established under section 82 (1)

Finance company

Includes any person who carries on a business (except the business of motor vehicle trading) and who, in the course of that person's ordinary business, -

1. a) buys, exchanges, or takes by way of assignment any motor vehicle for any of the following purposes:
   1. i) letting or hiring it to any other person under a hire purchase agreement:
   2. ii) taking or enforcing a security over it:
   3. iii) leasing it to any other person without conferring on that person the right to buy the motor vehicle; or
2. b) sells any motor vehicle bought, exchanged, or taken by way of assignment for any of the purposes specified in paragraph (a); or
3. c) sells any motor vehicle under a right of sale conferred by a security interest (within the meaning of section 17(1)(a) of the Personal Property Securities Act 1999)

Former Act

Means the Motor Vehicle Dealers Act 1975

Importer

Means a person who carries on the business of importing motor vehicles into New Zealand

Motor vehicle

1. a) means of the following:
   1. i) a road vehicle that is drawn or propelled by mechanical power and is of a kind ordinarily acquired by consumers for personal, domestic, or household use:
   2. ii) a vehicle of any other class or description declared by the Governor - General, by Order in Council, to be a motor vehicle for the purposes of this Act; but
2. b) does not include any of the following:
   1. i) an invalid carriage:
   2. ii) a moped:
   3. iii) a motor cycle, the total cylinder capacity of which does not exceed 60 cubic centimetres:
   4. iv) a tractor of farm machinery:
   5. v) a trailer:
   6. vi) a vehicle of any other class or description declared by the Governor - General, by Order in Council, not to be a motor vehicle for the purposes of this Act

Motor vehicle trader

In this Act, "motor vehicle trader" (section 7)-

1. a) means any person who carries on the business of motor vehicle trading (whether or not that person carries on any other business); and
2. b) includes -
   1. i) a car market operator;
   2. ii) an importer;
   3. iii) a wholesaler;
   4. iv) a car auctioneer;
   5. v) a car consultant.

Who is treated as motor vehicle trader (section 8)-

1. 1) A person is treated as carrying on the business of motor vehicle trading for the purposes of this Act if -
   1. a) the person holds out that the person is carrying on the business of motor vehicle trading; or
   2. b) in any specified period, the person sells more than 6 motor vehicles, unless that person proves that those motor vehicles were not sold for the primary purpose of gain; or
   3. c) in any specified period, the person imports more than 3 motor vehicles, unless that person proves that those motor vehicles were not imported to be sold for the primary purpose of gain,
2. 2) for the purposes of subsection (1)(a), a person holds out that the person is carrying on the business of motor vehicle trading if that person -
   1. a) advertises or notifies or states that the person carries on the business of motor vehicle trading; or
   2. b) in any way represents that the person in ready to carry, or is carrying, on the business of motor vehicle trading.
3. 3) Subsection (1)(b) does not apply to any trustee corporation (within the meaning of subsection 2(1) of the Trustee Act 1956) acting in the capacity of executor, administrator, trustee, guardian, committee, manager, agent, attorney, or liquidator, or in any fiduciary capacity, unless the trustee corporation is acting on behalf of the same person or estate.

Who is not treated as motor vehicle trader (section 9) -

1. 1) A person is not treated as carrying on the business of motor vehicle trading for the purposes of this Act only because that person is -
   1. a) an employee or an agent of a motor vehicle trader; or
   2. b) under a contract for services with a motor vehicle trader; or
   3. c) a solicitor who acts in that capacity as an agent for selling any motor vehicle unless that person is remunerated by commission in addition to, or instead of, that person's professional charges; or
   4. d) a liquidator of a company that is a motor vehicle trader registered under this Act; or
   5. e) a manufacturer who sells any motor vehicle to -
      1. i) the Crown; or
      2. ii) a motor vehicle trader registered under this Act; or
      3. iii) any person who is or has been employed by the manufacturer; or
   6. f) the holder of a second hand dealer's licence granted under the Second Hand Dealers Act 1963 who buys, in the course of that person's business as a second hand dealer, any motor vehicle for wrecking, dismantling by that person; or
   7. g) a finance company selling any motor vehicle under a transaction in which a motor vehicle trader acts as an intermediary between the finance company and any the buyer (whether or not the motor vehicle trader acts as an agent of the finance company); or
   8. h) a finance company, an insurance company, a rental car company, a storage provider (within the meaning of section 2 (1) of the Land Transport Act 1998), or any other person, that sells any motor vehicle as an incidental part of the person's ordinary business; or
   9. i) carrying on any other business besides carrying on the business of motor vehicle trading and who, in the course of that other business, -
      1. i) buys any motor vehicle for use in connection with that business, with or without the intention of reselling it after such use; or
      2. ii) resells the vehicle after using it in connection with that business.
2. 2) Subsection (1)(d), (h), and (i) applies only if the person sells motor vehicles through a motor vehicle trader registered under this Act who is not a car market operator.

Motor vehicle trading

Means the sale of motor vehicles by a person (whether or not the person is a principal or agent)

New motor vehicle

Means a motor vehicle that is not a used motor vehicle

Register

Means the register of motor vehicle traders established and maintained under section 52

Registrar

Means the officer appointed under section 60 who is responsible for the register

Sale

In relation to any motor vehicle, -

1. a) means the sale or lease or exchange or any other disposition of that motor vehicle or of any interest in that motor vehicle (for example, under a hire purchase agreement); and
2. b) includes the display for sale or offer for sale or offer for lease or offer for exchange of that motor vehicle; but
3. c) does not include a lease or offer for lease of a motor vehicle for a term not exceeding 4 months

Sales by auction

Has the meaning given to it by section 2 of the Auctioneers Act 1928

Statutory declaration

Means a declaration made before a person authorised under the Oaths and Declarations Act 1957 to take declarations

Used motor vehicle

1. a) Means a motor vehicle that has, at any time before being offered or displayed for sale, -
   1. i) been registered under -
      1. A) the Transport Act 1962; or
      2. B) the Transport (Vehicle and Driver Registration and Licensing) Act 1986; or
      3. C) any corresponding enactment of another country:
   2. ii) been used for a purpose not connected with its manufacture or sale; and
2. b) includes a motor vehicle that has been used for the purpose of demonstration in connection with the sale of another motor vehicle

Vehicle registration information

1. a) means information about any person whom the Secretary for Transport believes has sold more than 6 motor vehicles during a specified period; and
2. b) may include, -
   1. i) in the case of an individual, the person's full name, residential address, date of birth, and occupation:
   2. ii) in the case of a company, the company's name and the address of the company's registered office:
   3. iii) any other particulars that the Secretary of Transport considers relevant to the purpose set out in section 122

Wholesaler

Means a person who carries on the business of -

1. a) selling new motor vehicles to motor vehicle traders, or to other persons who carry on that business; or
2. b) selling used motor vehicles to motor vehicle traders

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