Commerce Commission warns Mosgiel car dealer over false odometer allegation

Taireri Motor Court Ltd has been warned by the Commerce Commission after a complaint was made over an odometer reading. Photo / 123RF

The Commerce Commission has issued a warning to Taireri Motor Court Ltd, a Mosgiel-based car dear with a branch in Auckland, after a complaint was made over an odometer reading.

The commission said following an enquiry it concluded TMC's conduct was likely to have breached the Fair Trading Act (FTA) by making misleading representations about the distance a vehicle had travelled and about selling vehicles on a private basis.

The company also failed to comply with the Consumer Information Standards (Used Motor Vehicles) Regulations 2008, the commission said.

The complaint alleged TMC advertised on its Facebook page a 2001 Subaru Impreza with an odometer reading of 160,000kms.

The Subaru's odometer reading was actually 166,000kms, the commission said in a statement.

In response to the Commission's enquiries, TMC said the Subaru was sold privately and without TMC displaying or providing to the purchaser a Consumer Information Notice (CIN).

"We have warned TMC that, in our view, its odometer representation and its failure to display a CIN likely breached the FTA. Traders must display a CIN in the vehicle and in the online advertisement if selling online, and they must not misrepresent the history of a vehicle, including information such as the distance it has travelled," said commissioner Anna Rawlings.

The commission subsequently identified another vehicle on TMC's Facebook page (a 2013 Mercedes AMG) being advertised as a private sale. The commission established that at the time of advertisement, both the Mercedes and the Subaru were registered to TMC.

"Different rights and obligations apply when consumers buy from a person in trade as opposed to a private seller, so telling consumers that they are buying privately has the potential to mislead them about their rights if something goes wrong," said Rawlings.

The commission has also written to TMC over its response to the Commission's enquiry that the Subaru was offered for sale on an "as is, where is" basis, "because it was not yet ready for sale". In the Commission's view, this is a possible breach of the FTA and TMC was provided with advice to assist its future compliance.

"Using a term like 'as is where is' can suggest that the Consumer Guarantees Act (CGA) does not apply to the vehicle and the consumer has no recourse against the seller if those guarantees are breached. However, this is not the case. Traders are prohibited from contracting out of the CGA when they sell to individuals. Recent court decisions have confirmed this," said Rawlings.