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Used car dealers warned over misleading odometers

Used car dealers warned over misleading odometer claims

The Commerce Commission has warned ten used car dealers that their advertising may be in breach of the Fair Trading Act, and that it will prosecute those dealers who continue to mislead customers.

Director of Fair Trading Deborah Battell said the Commission was concerned about representations made guaranteeing mileage, when no such guarantee was available from the dealers.

“Claims such as ‘mileage guaranteed’, ‘speedo guaranteed’, ‘guaranteed mileage certificate’ were made by the dealers in recent print and website advertising,” Ms Battell said.

“The dealers were, however, requiring purchasers to sign the standard MVDI Sale agreement form which contains clauses waiving the dealer’s liability if the odometer reading is incorrect.”

“Many dealers were also displaying window cards which, in small text at the bottom of the card, described the terms and conditions of a Category D Warranty, which specified that there was no warranty in respect of the distance travelled for ex overseas cars.”

Ms Battell said that dealers needed to be aware of their responsibilities under the Fair Trading Act.

“The conditions detailed and in the sale agreement forms and on the window cards clearly contradicted the advertisements guaranteeing mileage, which, in the Commission’s view, effectively attracted customers to the car yard on false or misleading grounds.

“The Commission regards this practice as misleading, and will take action if it continues,” she added.
Background Under the Motor Vehicle Sales Bill, currently before Parliament, the Commission will have a role enforcing, under the Fair Trading Act, the proposed Consumer Information Standard for the sale of used motor vehicles. This will require all trade sellers and sellers at car fairs (including private sellers) to display a notice with specified information about the car, including the distance travelled.

This will replace the window card currently required under the Motor Vehicle Dealers Act.

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