Repossession protection for car buyers

Press, 4 May 1988, Page 2

Repossession protection for car buyers

Political reporter

Car buyers have been promised protection from repossession rights arising from former owners’ debts by the Motor-Vehicle Securities Bill, introduced in Parliament yesterday.

The bill would protect purchasers by setting up a central register of security interests over vehicles.

The Minister of Justice, Mr Palmer, said problems had arisen because hirepurchase agreements over motor-vehicles did not need to be registered anywhere. Yet they were laid against subsequent buyers, even if the buyers did not know the agreements existed. Other security interests, such as mortgages, had to be registered, but not in one central place. “This means that a purchaser may have to check chattels registries in at least the 11 ‘chief town’ High Court registries, which are spread through-

out New Zealand.”

The bill provided the elegal framework for the establishment of a computerised central register of securities over motorvehicles, he said. The Oposition yesterday applauded the introduction of the bill.

“The problems that arise from people in innocence purchasing vehicles only to find that a month or two later there is a knock at the door and a repossession agent arrives and takes the car away is legend in this land,” said the Opposition associate spokesman on trade and industry, Mr Doug Graham.

At present people people who buy from a licensed dealer have pro-

tections through the Motor-Vehicle Dealers’ Fidelity Fund, but those buying privately have no protection.

Once a security interest was registered, potential buyers would be deemed to have notice of it, and could apply for a certificate showing the state of the register for that vehicle, Mr Palmer said. Purchasers could also make verbal inquiries, he said.

If a party failed to register a security interest, and the new buyer had no notice of it, the new buyer would not be liable or the debt, but secured parties would retain their rights of recovery against debtors.