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Govt Moving On Illegal Car Sales

1 April 2001

Concerns expressed by independent motor vehicle dealers over the sale of imported used cars through an illegal black market have some validity, Acting Customs Minister Jim Anderton says.

He says the Government is already moving on the problem. A discussion document has been prepared outlining proposals to replace the Motor Vehicle Dealers Act with a new Act. It will focus more generally on all motor vehicle sales other than private sales.

Jim Anderton says it's clear the current Act no longer adequately addresses 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," he said.

But Jim Anderton is warning that licensed dealers are not blameless.

"Customs is currently intercepting about ten dodgy cars a week. The majority of importers in those interceptions are licensed dealers. Dealers should be careful about blaming everyone but themselves for what they call 'rip-offs and shady practices'."

Jim Anderton says the discussion document proposed by Commerce Minister Paul Swain and the Consumer Affairs Minister proposes extending the coverage of the Act to car auctions and car fairs.

"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.

"People operating as a motor vehicle dealer would have to 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 applications.

"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."

A copy of the discussion document will be available today from the Ministry of Economic Development web site:


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