Car fair traders face tougher legislation

Car fair operators will have to guarantee details of each vehicle being sold if legislation being considered by a parliamentary committee is passed.

The Motor Vehicle Sales Bill proposes compulsory registration for "all persons carrying on the business of motor vehicle trading to be registered".

That includes car market operators, importers, wholesalers and car auctioneers.

Warren Kyd, a member of Parliament's commerce select committee, said yesterday that car fair traders would be unable to comply with many of the legislation's requirements, such as guaranteeing odometer readings.

"Those guys are in no position to check," he said.

"Isn't the effect of this bill to put all car fairs out of operation?"

But Motor Vehicle Dealers Institute executive director Steve Downes said it simply meant that traders would have to take due diligence to ensure information in car window displays was correct.

Exceptions from trading rules had been made in the past but that should not be allowed as it meant the consumer was not protected, Mr Downes told the committee.

Independent Motor Vehicle Dealers Association chief executive David Lynn said the legislation should go further and include reference to what were commonly known as "park and sell operators".

Automobile Association public affairs director George Fairbairn supported the inclusion of car fair operators as consumers wanted protection when buying a vehicle.

"You're either going to have everybody in or you're going to have those exceptions. We consider, for the consumer's interest, it should be everybody," he said.

"Car fairs have become a significant part of the business, particularly in Auckland."

However, the AA was concerned at the proposal to remove the Fidelity Guarantee Fund as it was a way consumers could receive some redress when a trader went out of business, disappeared or became insolvent.

Often the consumer with the problem was on a low income and having access to the fidelity fund for reimbursement meant he or she could buy another vehicle if a trader was found to have been unscrupulous, he said.

"Without the fund they would be left with nothing."

The AA was also concerned the bill proposed having only one person, a lawyer, on the motor vehicle disputes tribunal.

Mr Fairbairn felt a technical person should be added to the tribunal "to provide the technical knowledge and skill that is necessary to hear these hearings when the vehicle is under question".

Mr Kyd said he believed the legislation had not intended to make car fair operators liable for misleading information and it was likely to be clarified.

- NZPA