Auckland dealer must pay $16k after failing to disclose car had been written off

Thursday, 7 April 2022

These are the industries the Commerce Commission received most Fair Trading Act complaints about in the 12 months to the end of June, 2018. (Video first published November, 2018).

An Auckland car dealership has been ordered to refund a customer $16,500 after failing to inform her a vehicle she purchased had been written off.

A recently released Motor Vehicles Disputes Tribunal decision said Chenchen Wang bought a 2015 Nissan Juke for $21,500 from Mt Roskill’s R K Cars Ltd in April 2016.

The Juke had been written off in Australia due to water damage the year prior.

The tribunal said the vehicle was imported into New Zealand in October 2015, and was inspected by Auto Compliance as part of the importation compliance process.

Chenchen Wang bought a Nissan Juke which had been written off in Australia the year before. (File photo)

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The car’s electrical components, including airbags, had not been affected by water. (File photo)

A record of certification from November 19, 2015 found there was “very minor” water contamination to some plugs and “minor evidence” of water entry on the driver’s side of the vehicle.

Wang argued R K Cars had engaged in misleading conduct concerning the vehicle’s history and had thus breached the Fair Trading Act.

She claimed R K Cars did not tell her the vehicle had been written off due to water damage.

R K Cars denied those allegations.

The tribunal heard Auto Compliance had replaced a part of the driver’s seat belt when the vehicle was imported, as it was concerned it had been assembled in water, but no other repairs were made.

The vehicle was also assessed by automotive electricians as part of the compliance process.

“Jay Bee Auto Electrical considered that none of the vehicle electrical components, including wiring, control modules, and airbags, had been affected by water ingress,” the decision said.

The tribunal said both R K Cars’ director and sales manager accepted they did not tell Wang the vehicle was a statutory write-off.

That was important information to have as a “stigma attaches” to cars that had been written off, the tribunal said in its decision.

“This stigma significantly affects the resale value of those vehicles – irrespective of the nature of the damage that caused the vehicle to be written off.”

R K Cars had therefore breached the Fair Trading Act, the tribunal found.

It ruled the agreement between Wang and the car dealership to purchase the car would be void from the date of its decision.

It also ordered R K Cars to pay Wang a refund of $16,500 within 10 working days.

That was discounted $5000 from the original purchase price to reflect the fact Wang had owned the car for nearly six years, and had driven more than 14,000km in that time.

Wang also claimed the car’s odometer had been tampered with or was faulty, but the tribunal said that was “highly unlikely” and a discrepancy in recorded odometer readings was probably due to human error.