Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Commerce Commission cautions car dealers

Media Release
Issued 16 January 2003-04/086

Commerce Commission cautions car dealers: Interest-free deals must be just that

The Commerce Commission is cautioning car dealers that interest-free deals that are not truly interest-free risk breaching the Fair Trading Act, an offence which can attract fines of up to $200,000.

Director of Fair Trading Deborah Battell said that if an offer is advertised as being interest-free, then there must be no extra cost to the customer built into the price.

The caution follows a recent settlement between the Commission and Christchurch-based car dealer, Laurie Payne Motors Limited, in relation to what the Commission believed to be misleading advertising of interest-free prices.

The company's website promoted a number of vehicles available for sale at prices described as '36 months, 0% interest free, conditions apply'. If a customer chose to pay cash rather than enter into an interest free deal, however, the cars were offered for sale at reduced prices.

"A 1994 Mazda Lantis Sedan, for example, was available under the interest-free deal for $9,995, but a cash buyer would only have to pay $8,200 for the same car," said Ms Battell.

Ms Battell said that it was now well established through a number of cases taken by the Commission that to offer a product at a particular price on an 'interest-free' basis but at a lower price for cash was a breach of the Fair Trading Act.

"The price difference is effectively the cost of the interest," she said.

An additional concern was a $300 booking fee which applied but was not disclosed in the website advertising.

"Price is a fundamental element of competition and is an important basis of most consumer purchasing decisions. People need to be able to rely on pricing information provided by companies in order to make informed choices, and the Commission will not hesitate in taking action against car dealers who persist with these misleading offers," Ms Battell added.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Onetai Station: Overseas Investment Office Puts Ceol & Muir On Notice

The Overseas Investment Office (OIO) has issued a formal warning to Ceol & Muir and its owners, Argentinian brothers Rafael and Federico Grozovsky, for failing to provide complete and accurate information when they applied to buy Onetai Station in 2013. More>>


Tomorrow, The UN: Feds President Takes Reins At World Farming Body

Federated Farmers president Dr William Rolleston has been appointed acting president of the World Farmers’ Organisation (WFO) at a meeting in Geneva overnight. More>>


I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>


Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>


Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>


Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news