New deal for second-hand car buyers

Press, Volume CXVI, Issue 34104, 17 March 1976, Page 1

New deal for second-hand car buyers

Buying a second-hand car. once a task fraught with peril, should be considerably easier from July 1, when provisions of a new act take effect.

From that date, the Motor Vehicle Dealers’ Act, 1975, will require that a card be displayed on all second-hand cars. This will show the make and model, year of registration, speedo reading, engine capacity, registration number, the number of previous owners, and whether the car had previously been a rental car or taxi.

As well, the cars will be placed in categories by the [ dealer. Category A cars, which are less than four years old and have travelled less than 50,000 km, must be sold with a four-month or 5000 km warranty. Cars between four and six years old which have travelled less than 75,000 km must have a two-month or 3000 km warranty, and cars less than eight years old which are not in either of the other categories are C cars and require a one-month or ■ 1500 km warranty.

Defects that occur during

the warranty period must be corrected by the dealer, but the warranty dqes not cover batteries, tyres, upholstery, paint or panels. Nor does it hold the dealer liable to correct defects caused by abuse or neglect by the new owner.

Rebuilt cars and those which have been used overseas are excluded from warranty, the dealer being obliged to furnish this information to the buyer. Both the dealer and purchaser can agree to waive their warranty’ rights, but must sign a card affirming this. Re-

possessed' cars are also soldi without warranty. This pan. of the act was unlikely to affect the new: car market, said the chairman of the newly formed Canterbury branch of the Motor Vehicle Dealers’ Institute (Mr John Hay). What it was likely to do was to remove much of the business of buyring and selling from the priy’ate sector, which accounts for 50 per cent of sales at present, and make it more attractive to buy from a car dealer, because of the information and warranty given.

A similar act in Australia-' about three years ago hadgiven dealers about 85 peri cent of the business in a short time. The warranty is likely to increase the price of secondhand cars, and comes after moves by the Government to restrict the sale of new cars by demanding cash payment. Dealers are likely to pay less for trade-ins in an attempt to retain their present profit i margin. i Other provisions of the act

(introduced as a private members’ bill in 1974 by Dr M.

E. R. Bassett, require dealers, to apply to the Magistrate’s; Court for licences. New deal-; ers must sit examinations, and prove that they have the s required experience. They; must advertise their application for a licence twice, and; members of the public mays object to the application if I they lodge notice of inten-| tion. These provisions will I come into force on April 1. The new institute, modelled' on the Real Estate Institute,; jhas the power to regulate its 'members, and has established; ia fidelity fund initially of 1 I $250,000.

The demise of t.he dealer! twho sells “bombs” is pre;dieted by Mr Hay. He will; J not be able to provide a wariranty on such cars, and will jbe able to sell them only in i agreement with the buyer. As' well, the dealer’s premises will now be required to comjply with the zoning requireIments as demanded by the iTown and Countrv Planning ,lAct, 1953. 11 Almost every dealer in Christchurch supported the in the act, said Mr 11 Hay. He had not seen any : l licence applications to which Ihe would object, he said.