How to Buy Safe by Team WCD

• Why you need to organise your own full mechanical check.

  This is a large reason why Wholesale Cars Direct operates. The Director once worked for a yard that had all cars appraised by a very reputable company. The dealer received two copies of the Appraisals, a clean copy and a real copy with the faults. The faults never got fixed so customers purchased the cars having no idea that it had faults. In our opinion the appraisals are just a glorified warrant of fitness check list that do not show the true state of a vehicle. Many dealers will have these done so that you feel confident not to organise your own full mechanical check.

  We personally recommend you organising your own full independent AA, VINZ or VTNZ mechanical report. For the sake of $209 you can stop a bad experience and clearly understand what you are buying. If you organise your own check you will get the report, not the dealer.

  Also be aware the higher the kilometres on a car the higher the risk of multiple issues.
  A dealer advertising that the vehicle has passed the NZ standard compliance check really doesn’t mean much. We have learnt from our own experiences that what one NZ compliance inspector may pass in compliance, another may fail. This is also why in our opinion appraisals are not worth the paper the checks are written on. We wouldn’t accept a report from a dealers own in-house inspection team, always insist on your own choice of un-biased and independent operator.

• Rust - What to look for, look under the bonnet and especially under the vehicle.

  There are 3 main categories of vehicles in the country. NZ New, Japanese Import and UK Import. New Zealand being very coastal makes rust a very high risk.
  In certain areas of Japan and the UK they salt the roads to remove ice/snow, rust would be one of the largest risks on freshly imported vehicles from these countries. Every week the Director/Buyer for Wholesale Cars Direct turns down hundreds of cars due to rust. It is really surprising seeing how many of these cars end up for sale in Auckland and around New Zealand. It is even more surprising to the extent rust gets let through the vehicle compliance stage on entry to the New Zealand car market. Even a Japanese auction grade 4.5 vehicle can fail badly for rust. Please look underneath the car you are looking at and if buying out of town simply request under body pictures.

• Tyres - What should you look for?

  If the vehicle has been imported from Japan make sure the vehicle has not been fitted with Japanese snow tyres. These are extremely dangerous when used on New Zealand roads and in our opinion should be illegal.

  Check for age related cracking and perishing on the side walls of any tyres. It is unbelievable what some compliance shops will pass. You cannot trust the New Zealand standards here. Some compliance shops have fixed price compliance including tyres which means the dealer doesn’t have to pay for them if they fail. Compliance shops are a business, they need to make money and some make money by supplying the cheapest parts to be competitive at the cost of quality and sometimes safety of the public. Our Director once queried an inspector at a compliance shop that passed a set of tyres that three other workshops failed. The Director asked the inspector if he would drive around in this car with his own family in it on these tyres, the inspector replied - “NO”.

  Cars are cheap for a reason, especially in Auckland. It doesn’t take a rocket scientist to look at the price variants throughout New Zealand to see quality has been sacrificed so much to put out the cheapest car for sale. Cracked tyres pass warrants. So if you are buying out of town please cover yourself, ask this question and if you are physically able to look at the car, look closely at the side walls of the tyres.

• Stereos – What to look for?

  Check that the stereo actually works if this is important to you. If buying a freshly imported vehicle from Japan, please note that Japanese stereos do not receive New Zealand radio stations. If this is important to you; stipulate that you would want a band expander in the car at the time of purchase and to be installed upon delivery. The dealer may want to charge you for this. Be careful here as to the quality as generally the cost starts at fifty dollars, quality does matter here. But for example a late model European car it can get very expensive.
  Should the car have stereo controls on the steering wheel and it is important to you that they work you have to make sure that they do, especially if the stereo is or has been replaced. If it is an aftermarket stereo unit, quite often this feature is lost.

• Are two keys important to you?

  If so ask if the vehicle has two working keys at the time of purchase or inquiry. Keys can be very expensive and the dealer may not have the margin to supply two keys if it only has one, but it is better to know from the outset so you can factor this into your purchase budget or negotiation. They are second hand cars, it is a bit of a lucky dip if they have come with two keys. A lot of cars now have keys that are called proximity keys. They are not cheap so make sure they work. For a lot of late model Japanese and European cars a key replacement will be around $500, some $1000.

• It is the little things that make the difference.

  If you are buying a hatch back, SUV or station wagon and a rear parcel tray is important to you, check if it has one prior to purchase. These start at $300 to buy and some can be up to $2000 for the likes of a Mercedes.

• A spare wheel can be a very contentious issue for Kiwi’s, the newer the car the more likely it is that there are different options to spare wheels. Make sure you understand what is offered with the car you are buying and how it works.

• Auction sheets from Japan.

  We love Japanese Imports. We think buying the right Japanese vehicle from the right dealer you can buy very safe. The Japanese are leaders in the world with regard to vehicle quality. They record when the vehicle has been in an accident and are very stringent with their auction house grading’s. So, our advice if buying a Japanese Import is to request an auction sheet for the car you are looking at. Any reputable dealer will be able to provide you this very quickly. If a dealer can’t supply, I would question the dealer’s transparency. There are so many accident grade Japanese vehicles for sale in New Zealand. We believe there should be a standard here where the consumer is told. There is no requirement to make the consumer aware, so accident grade vehicles are rife in the New Zealand market sold as quality. Accident grade cars from Japan are cheaper to buy, if you don’t ask for an auction sheet, you will not know what you are buying. If the Auction sheet has A, R or RA as the grading, you are not buying a car comparable to what is being sold at Wholesale Cars Direct. We predominantly buy grade 4.5 and above from Japan, the highest standard you can buy. But because an auction sheet is grade 4.5, do not trust that it is not rusty, or smell of cigarettes. Grade 4.5 is the external quality of the car, the interior will be graded as A, B or C.

• Never, under any circumstances buy any imported vehicle without a certified odometer certificate. Replaced odometers and odometer tampering can still happen.

• Buying from out of town.

  This is something you should only contemplate from a trusted dealer and if you follow the Buy Safe guidelines the risk will be largely minimized. There is nothing worse than receiving a vehicle that is not what you expected. Make sure the dealer emails you or sends in writing the exact condition of the vehicle. There is also nothing worse than purchasing out of town and having a vehicle turn up with stone chips, scratched panels, curbed alloy wheels, smelling of cigarettes or a lot of rust. Its way to easy to photo shop a car and make an average car look immaculate. Organise a full independent mechanical inspection, request under the vehicle pictures, auction sheet and speedo report.

• In transit purchasing, be careful here and check what the dealer is advertising.

  In almost all cases the dealer has not seen the car physically, very few dealers travel to Japan or the UK now. Unless the car is new, our experience of UK cars hasn’t been great, the spec level is substandard to Japanese cars and the risk of rust even on a one year old car is too great.
  If you do decide to purchase using this unseen method, make sure you follow our Buy Safe guidelines and ensure you add conditions to the purchase. i.e. a satisfactory independent mechanical check and sighting the auction sheet.
  If you don’t follow this guideline and don’t add conditions to the purchase when you sign a Vehicle Offer and Sale agreement (VOSA) with the dealer, should you exit the sale because you are not happy when the vehicle arrives the dealer has the right to keep the deposit you have paid.
  Our Director/Buyer turns down so many vehicles daily and unsurprisingly they end up at all around New Zealand on less transparent yards. It’s even more embarrassing to see some dealers list these cars with an instant was price and an instant now price when the vehicle is advertised in transit. To us that is just desperate marketing.

• Vehicle Offer and Sale Agreement:

  When purchasing a vehicle from a dealer, you will have to sign a 'Vehicle Offer and Sale Agreement.' This is where you should Buy Safe and write the things we have discussed in this guide into the agreement; make sure you write, 'subject to your conditions' on this piece of paper. This will allow your deposit to be refunded if the dealer does not fulfil their obligations and such things like an independent mechanical check is not to your satisfaction.

Mechanical Breakdown Insurance (Warranties).

• We would only buy a car from a dealer that can offer these. The chances of your car suffering mechanical or electrical failure are many, many times greater than you needing to claim on your car insurance for accident or theft.
• Warranties offer protection over and above what dealers legal obligations are.
  They also provide a quick remedy for a customer, even when an issue is covered by the law.
  A quality MBI (Mechanical Breakdown Insurance) from a reputable, recognised brand will enable the warranty company to deal with issues quicker and more smoothly than can be achieved by most vehicle dealers. Especially if the breakdown is a large distance from home, as they so often are.
• A Warranty ensures the customer does not have to rely on a vehicle trader who may not be as happy to see them back as they were when they first purchased the car! If there are any issues later with the required repairs, the warranty company is in the best position to remedy this.
• The repairer will not wish to fall short of the expectations of a company who provides them so much work.
• A quality warranty provides extra things such as rental cars, accommodation and roadside service, which provide superior protection and for a period of time far exceeding the Consumer Guarantees Act.
• Also, what happens if the trader is now out of business? The CGA won't help you then!
• The current costs are escalating, you can now be paying $150 per hour for franchise service fees, $100 per scan. Just in October 2020 we did an 02 sensor (Oxygen sensor) on a Mazda Atenza at a cost of $800 and that’s at our trade price.
• The technology in vehicles now comes at a really high cost for diagnostic and skilled labour to work on cars, let alone parts prices and availability. Then there is the case of being covered for incorrect diagnosis. In July 2020 we had a BMW Hybrid with an issue, BMW franchise quoted $28000 saying the vehicle required a new engine, the BMW was a 2016 travelled 40,000 kms. We pulled the car from them and took it to a specialist Auto Electrician to find out it just needed a new seal in the hybrid connection at a cost of $2000.
• In this day and age we believe Mechanical Breakdown Insurance is so important, the cost of labour, parts, specialist technicians, as well as piece of mind.
• It is not a legal requirement for a dealer to provide a loan car if something goes wrong. At a franchise you will get charged for a loan car. At WCD we provide customers loan cars for free for those that have warranties and will facilitate the work for you.

Checkpoints when selecting a Warranty

• Check your warranty is the best. When is the first service required? Some companies make you have your car serviced within the first 5,000 km or 3 months after purchase. This sometimes results in claim difficulties as it is easy to travel over 5,000 km when you have just purchased your nice new car! This will invalidate some warranties if there is a claim and it has not been serviced yet. Other companies do not ask for a service until 10,000 or even 15,000 km or 12 months which is when most manufacturers recommend a service.
• Check the Claim Limit. Some have claim limits on late model petrol vehicles and others do not. Some have modest almost unrealistically low claim limits, especially on Electric / Hybrid, special category and European vehicles that will not actually cover a large repair, while others are far more generous with their claim limits.
• If you are purchasing an EV or Hybrid vehicle. Check that the policy being offered covers the electric drive system and has adequate cover for the battery. Many warranties have little if any cover for the batteries in an EV or Hybrid.
• Check if you can use your own agent to service the vehicle and check who the approved repairers are, a reputable warranty company will have a large network of approved repairers
• Check if the warranty covers diagnostics and if it has a clause that excludes wear and tear as these warranties will use this to avoid paying claims where they can.
• Check that the warranty has a cool off period where you can think about the warranty you have purchased and change your mind if you want to. (Normally 5 working days).

Consumer guarantees Act & Motor Vehicle Disputes Tribunal.
What they mean for your risk ahead.

For people coming into New Zealand or anyone unsure of your rights buying a vehicle, we have listed a website address to the Consumer Guarantees Act below for your awareness.

We will discuss, in our opinion, the Consumer Guarantees Act and inform you of the Motor Vehicle Dispute Tribunal process in New Zealand.

The Consumer Guarantees Act to us is a very grey area, as it comes down to what is deemed 'fair and reasonable’.
This is why we believe following our Buy Safe guidelines can eliminate a lot of issues from the start. There is no phone number to call when you have an issue if the dealer is not acting reasonably and of good faith unless they are a member of the New Zealand Motor Trade Association.

Even then the process is very time consuming and to many, very stressful. If you do end up in a situation where you haven’t bought safe or just want to understand where a bad purchase in New Zealand can end up, here are some interesting things to know.

How long does it take to get a hearing?

It all depends on where in NZ the applicant is, in Wellington it takes on average 5-6 weeks to get a hearing, then a decision is not usually for another 2-3 weeks after the hearing. If the vehicle is rejected the customer will then have to wait another 10 days after the decision to get their money back.
In Auckland it takes much longer to get a hearing due to the volume of claims (average 66% of claims in NZ are in Auckland).

How many Tribunals are there in NZ?

The Tribunals can be held at a court anywhere in NZ, the Adjudicators travel to the court, due to this the timeframes for smaller towns can really drag out.

Is there a price cap on their decision?

The Motor Vehicle Disputes Tribunal can award up to a maximum of $100,000, a normal Disputes Tribunal can only do up to a maximum $30,000.

Is there a timeframe the applicant has to make a claim? I.E drives around with check engine light on for 1 month before applying?

As with most things it is a ‘reasonable time’ which is determined by the adjudicator.

Who are the people that make the decisions? Paid full time employees?

There are only 2 Adjudicators for the entire of NZ. One handles from the top of the North Island down to Taupo, the other from Taupo down to Stewart island. So they have a very busy work load.

The Assessors that give technical information to the Adjudicators are paid, but it is not full-time employment.

What team WCD thinks:
Buy safe is why WCD exists. To be a true service focused, quality, documented, transparent dealer that does things right. Over the years we have resorted to our own standards, purely because the car market in New Zealand is unregulated so has no real standards. The market has become so price competitive at a very real cost to quality and transparency.

The process of returning a car or getting certain faults fixed under the Consumer Guarantees Act isn’t as simple as a lot of people think. Especially when buying a used motor vehicle in transit or out of town (you have no coverage under the Consumer Guarantees Act (CGA) if you choose to purchase through a private sale). There are many things including the age of the vehicle, kilometres travelled and overall condition that are taken into consideration. So, many people will mention the CGA when purchasing a vehicle or after purchasing a vehicle. They do not take into consideration that the CGA is there to protect the seller also. Car dealers are very well aware of what is fair and reasonable.
We actually advise, when issues arise, to go to the dealer and be calm and not to mention the CGA as most dealers will react to how you approach them.

If you have purchased from an MTA dealer you will have more support on your side and a safer process if the dealer you are dealing with proves to be difficult after they have taken your money. But understand that even though dealers are a member of something, that they are meant to stand by a code of conduct or ethics, the number that get audited are very few and far between in New Zealand.
In most cases at the start of an issue the dealer must have the opportunity to put things right under the Consumer Guarantees Act. If the dealer refuses to help or doesn’t help to the level you feel they should be, you should check your rights with the MTA. From there depending on your rights you would need to lodge a claim at the Motor Vehicle Dispute Tribunal. We can only wish you good luck if you haven’t bought safe at this point. Please note that if you have an issue and you get it fixed, the dealer does not have to pay your bill. The dealer has to get the opportunity to asses and fix the issue. If you don’t notify the dealer prior, you will be on your own.

For more information on the New Zealand Consumer Guarantees Act (CGA) you can visit https://www.consumerprotection.govt.nz/general-help/consumer-laws/consumer-guarantees-act/

To understand the MVDT here is an address where you can view outcomes of disputes to help understand your chances in a dispute and the process https://www.justice.govt.nz/tribunals/motor-vehicle-dealer-disputes/

New Zealand Consumer Guarantees Act general overview of the topics covered. This is not intended to be relied upon as legal. Please refer to the above websites for independent advice.

THE CONSUMER GUARANTEES ACT 1993

The Consumer Guarantees Act 1993 places obligations on retailers, manufacturers and service providers. In many cases the obligations also fall on importers and distributors
The Consumer Guarantees Act (CGA) sits alongside the Fair Trading Act and the Commerce Act. It displaced the elderly Sale of Goods Act for consumer transactions and sets out a number of guarantees which are to be implied into transactions involving the supply of goods or services.

The Guarantees

A cornerstone of the CGA is the notion of acceptable quality. To be of acceptable quality goods must be:

• Fit for their common purpose;
• Of acceptable appearance and finish;
• Free from minor defects;
• Safe;
• Durable.

There are further guarantees that:

• The supplier has the right to sell;
• Goods are free from undisclosed securities;
• The consumer will get undisturbed possession;
• The goods comply with any description given to them;
• The goods correspond with any sample;
• The price is reasonable;
• Spares and repairs are available for a reasonable period;
• Express guarantees will be honoured.

Services is widely defined. For example, it includes professional, financial, insurance and accommodation businesses, as well as the usual trades and other services such as plumbing or vehicle repair. Services must be:

• Given with due care and skill;
• Given within a reasonable time fit for their purpose;
• Provided for a reasonable price.

The reasonable price guarantee for both goods and services applies, unless price is set out specifically or by formula in the contract.

Application

The key to application of the CGA is the definition of consumer, which means any person who acquires goods or services ordinarily acquired for personal, domestic or household use. Consumer does not include somebody acquiring either goods or services to re-supply, manufacture or repair in the course of trade.

It is not possible to exclude the CGA from true consumer transactions and there are potentially heavy penalties under the Fair Trading Act for businesses which attempt to do so.

However, it is possible to exclude the CGA if a consumer is in fact acquiring the goods or service for the purposes of a business, and the contracting out is acknowledged in writing. For the supplier, this is a very important provision.

The CGA requires a business to be accurate in disclosing the true nature and limitations of goods and services.

Remedies & damages

The CGA emphasises resolving complaints quickly, directly and without involving the Court. Initial remedies against suppliers or manufacturers are:

• Fix or replace;
• Reject and refund or cancel and refund;
• Have someone else fix.

If initial remedies fail, the Courts or the Disputes Tribunal can award damages which can compensate not only for the reduction in value of the goods or services, but also for any consequential loss which was foreseeable.

Reducing the risk

Although it is basically not possible to contract out of the Consumer Guarantees Act, there are steps which all suppliers should take in order to reduce the risk of claims. These include:

• Separate contract documents for consumer and non-consumer transactions;
• Written acknowledgements from consumers who purchase for business purposes and contract out of the CGA for such transactions;
• Specific prices;
• Clear statements if spares and repairs are not available;
• Ensuring that retention of tile clauses are orally drawn to the customer’s attention, and acknowledged in writing;
• Reviewing the adequacy of insurance;
• Reviewing retailers’ rights of redress against manufacturers, importers, wholesalers and distributors.

Most important of all, disclosing to consumers the true nature of goods or services.

A final suggestion from our team

When you enter a dealership look at the place you are visiting, the premises, the people and their website.

If a dealer cannot supply transparent information easily, ask yourself what they will be like when an issue arises. Ask the right questions and be confident with topics in Buy Safe. They are very real.

Compare that with your expectations of quality and assurances and ask yourself how comfortable you are?

Would you be able to go back there and ask for assistance after your purchase?

Do you feel like there is a quality that flows from the photos of the cars on the website, their descriptions, the service and knowledge of the people you deal with, and the actual cars when you finally get to inspect them?

Are you comfortable that every aspect is transparent and every question has been answered quickly and without guile?

We think people should check dealers own testimonial pages against their Google reviews to see if they match up. What a dealer may write themselves or have on their own website can be very different to google review experiences.

Whether it is from Wholesale Cars Direct or another dealer, we really hope we have helped you buy safe.