Feature article
What to know when buying a car from a dealer
When buying a car from a dealer, there are a few things to consider. This experience can differ from buying privately.
Last updated: 2 October 2024
When buying a car from a dealer, there are a few things to be aware of. The experience can be quite different to buying privately.
Buying your car from a dealer means you’re covered by the laws that dealers must abide by. They must comply with the Consumer Guarantees Act and the Fair Trading Act, which give the buyer added protection compared with buying privately.
Dealers need to be registered and have to display a Consumer Information Notice (CIN) for used cars they are selling. This gives all the info on the car’s history, including whether it has a security interest, if it has been re-registered, whether it has been imported or whether road user charges apply, among other things.
Dealers also have to display a Vehicle Emissions and Energy Economy Label. The label layouts a vehicle’s estimated emissions and energy efficiency information.
If the dealer is a member of the Motor Trade Association, you can access a free mediation service if there’s a dispute.
If the car you buy has debts owing, the dealer will be liable (unless it was specifically pointed out to you in writing prior to the sale).
Some cars purchased through a dealer come with a guarantee or warranty, which means the dealer is liable if anything goes wrong with the car within a certain period of time.
More top tips
- Do your research
It’s good to know the history of a car before you buy. Obtaining a Vehicle Information Report (VIR) will allow you to find out the car's legal status and registered history.
It’s also worth checking out the reputation of the dealer. Do a few online checks to see if they have good reviews from previous customers.
Know your finance options
Most dealers will have finance options available, but are they the best on offer? You can get a quick online quote from a provider like Harmony. With a pre-approved loan, you can avoid being pressured into a higher interest rate at the dealership.
Always get a mechanical inspection
Even when buying from a car dealer, you should get an independent inspection. Use a company such as VTNZ. These typically cost around $200, but they can save you thousands in the long run if problems are detected, and can help when negotiating the price.
Avoid dealer add ons
Dealers will try to sell you a mechanical warranty, but caution is advised here. You can end up paying too much for a warranty that might not cover you fully in the case of an issue. Read Consumer NZ’s article on this topic. Also, it’s good to have your own insurance sorted before driving the car away. You can do this easily online from a provider like Trade Me.
Negotiate the price
It’s good to have an idea of the market value of a car, to make sure you are not paying too much. Using Trade Me’s free car valuation tool will help you out there.
It can be advantageous to buy a car from a dealer at the end of the month, as sales staff have targets to meet and might be more willing to strike a deal.
These are the important things to be aware of when preparing to buy your car from a dealer, but what if you’re travelling a different path and looking to purchase your next car from a private seller? Our tips on what to expect when buying from a private seller is the place to look.
Read to shop? Check out all dealer listings on Trade Me Motors.
Author
Kyle has been reviewing cars since starting at NZ Autocar magazine in 2003 and has been editor since 2009. In that time he’s become an expert on what makes for a good vehicle while also gaining insights into the local automotive industry.
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