Ministers Release Discussion Document On Reform Of Motor Vehicle Dealers Act

Commerce Minister Paul Swain and Consumer Affairs Minister Phillida Bunkle have released a discussion document outlining proposals for the reform of the Motor Vehicle Dealers Act.

"After 25 years in force it is high time this piece of legislation was replaced," Paul Swain and Phillida Bunkle said.

"In 1998 the previous National government introduced proposals to change the law for this industry, but it all got too hard for them. We are now looking to move the debate forward.

"What the discussion document proposes is to replace the Motor Vehicle Dealers Act with a new Act focussing more generally on all motor vehicle sales other than private sales.

"This will extend the coverage of the regime to car auctions and car fairs which are currently not covered by the legislaton.

"If we do this we will need to simplify the requirements for consumer protection. A Consumer Information Standard is proposed under the Fair Trading Act to replace the current window notice requirements.

"Consumers who purchase from a registered dealer will continue to be guaranteed ownership and will not face repossession if money is still owing on the vehicle by previous owners.

"The position of financiers who lend on the security of vehicles will be protected through either insurance, performance bonds or a modified fidelity guarantee fund. This will ensure finance remains readily available for vehicle sales.

"We also propose a new motor vehicle dealer disputes tribunal made up of a Chairperson lawyer, a consumer representative and a technical expert. The jurisdiction of the tribunal will be expanded to include disputes under the Consumer Guarantees Act and Fair Trading Act and will not be limited to vehicles sold by licensed dealers only.

"We propose that people operating as a motor vehicle dealer must obtain registration. Applicants would have to pay a fee and meet certain criteria – most importantly the absence of certain convictions within five years preceeding the applicatons.

"The sorts of convictions relate to certain crimes of dishonesty, including fraud and odometer tampering.

"The discussion document also proposes establishing a list of people who would be banned from any involvement in the motor vehicle dealers trade.

"The purpose of this discussion document is to assess the feasibility and relative costs of the proposals. We intend reporting back to Cabinet in June and to introduce legislation soon after.

"It is clear the current Act no longer adequately adresses the needs of consumers or the industry. It's been a political football which has been kicked about over the last decade, it's time to have a good look at the legislation and bring it into this century," the ministers said.

A copy of the discussion document will be available today from the Ministry of Economic Development web site: http://www.med.govt.nz/buslt/bus_pol/media20010116.html

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