Trust & Safety

Trade Me's blog on Trust and Safety issues.

Disclosure of Australian Statutory motor vehicle 'write offs' now required

Volvo

We’re concerned that there is an unquantified number of vehicles in the New Zealand fleet that have been through the statutory write-off process in Australia* and then on-sold to New Zealand buyers and dealers, who are not aware of the history of the vehicle.

So we’re doing something about it.

We’ve made a new policy around the information that must be disclosed by Motor Vehicle Traders listing these vehicles.

All motor vehicle traders listing vehicles on Trade Me must disclose in the listing body if a vehicle imported from Australia was a statutory write off.

This applies to vehicles imported from 1 January 2011

We’ve outlined this requirement in our banned and restricted list, and this policy comes into effect on 1 July 2016.

Suggested wording:

"This vehicle was imported from Australia as a statutory write off. Buyers should ensure they fully understand the history of the vehicle before purchase."

Why is this an issue?

Vehicles which have been written off in Australia may have suffered significant damage, including flood or fire.

Although they may have been cleaned, the damage may only have been repaired cosmetically to get the vehicle past border compliance, and there could be underlying safety issues (particularly with regards to electrical componentry).

We‘re concerned about the safety of our members and we believe consumers need to know the accurate history of a vehicle so they have the opportunity to have the vehicle inspected for specific types of damage or repair.

We understand that vehicles are meant to entry certification before vehicles are able to be driven on NZ roads, but there are ways to ‘work around’ this regulatory requirement.

We’re aware of cases where consumers have paid the same price for vehicles that have been through the statutory write-off process as they would for vehicles that have not suffered significant damage.

This means consumers are paying an inflated price for these vehicles based on a misleading impression of the vehicle’s history. And that’s just not cool.

Trade Me is not protesting against vehicles being appropriately repaired and then on-sold in New Zealand, but we believe consumers need to have an accurate picture of the true state of the vehicle to assess the vehicle’s worth with full information.

We believe that motor vehicle dealers who fail to disclose this information are making a misrepresentation by omission and this could amount to a breach of the Fair Trading Act.

We are aware the Commerce Commission is investigating this issue. 

How can motor vehicle traders comply with this policy?

New Zealand importers will be fully aware of the history of vehicles they import from Australia. This is always recorded on the documentation accompanying the vehicle as it enters New Zealand.

Other motor vehicle traders may use NZTA or MotorWeb to check the status of the vehicle.

We recognise that the NZTA’s database is a starting point and not a comprehensive data set.

If there is any doubt as to a vehicle’s status, traders may wish to consider exploring the vehicle’s repair certification status as a lead. 

We expect traders to make best endeavours to determine the vehicle’s status and disclose if the vehicle was a statutory write-off, particularly if the vehicle was imported into NZ on or after 1 January 2011.

Why is Trade Me taking this action and not the Government?

We look out for our members and where the Government has not yet taken action, we often get stuck in because it is the right thing to do.

While we are making this change for the benefit of Trade Me’s members, it is our view that this information should be a regulatory requirement for all vehicles statutorily written off for both Australian and the rest of the world.

Trade Me believes this information should be a mandatory requirement on the Consumer Information Notice. Further, to ensure the greater provision of information to consumers, we believe the CIN should be displayed on all online classified advertising. 

Commerce and Consumer Affairs Minister Paul Goldsmith responds:

“It is important that consumers have easy access to key information when making purchasing decisions. If you buy a second-hand car from a dealer, consumers do have rights under the Fair Trading Act.

“Under this Act, it’s unlawful for these businesses to mislead or deceive you, or to give you false information about vehicles they’re selling.

“I wholeheartedly agree with Trade Me’s sentiment that taking steps to mislead or deceive a purchaser at the point of sale about a motor vehicle’s history is unacceptable.

“I understand information regarding statutory write-offs from Australia has been available on the NZ Transport Agency website for some time. The Government recognises that this information needs to be more readily accessible to consumers, and is making changes. I am actively considering whether regulatory change to the current Consumer Information Notice (CIN) requirements is necessary or whether consumers can be provided with this information through other mechanisms.

“I will be watching the developments closely and have asked officials to report back to me on progress.”

* Statutory write offs are vehicles that are written off for insurance purposes because they’ve suffered significant damage. This damage could be from a crash, flood, fire or other accident. Once a vehicle is written off in Australia, it's never allowed back on the road - hence the export market to NZ.

Image credit courtesy Creative Commons licence by The NMRA