Buying a Used Car in New Zealand


Red Car

Dodgy Odometers, New Zealand Cars and Imports

Used cars in New Zealand fall into two categories – Imports and “New Zealand New”.

“New Zealand New” cars are vehicles that were originally sold brand new in New Zealand. Their odometers have been regularly checked in New Zealand and the yearly readings can be found on the vehicle’s VIR or AA Lemoncheck. (See below)

In addition to “New Zealand New” cars, there are imports. Most imports are purchased at auctions in Japan and brought into New Zealand by car dealers. Odometer readings on imports cannot be verified using a VIR/Lemoncheck and should be treated with caution. Some car dealers will guarantee the odometer readings of their imports. There are stiff penalties for dealers who guarantee odometers falsely. Car dealers are under a legal obligation to explain the odometer reading to you when you purchase a car.

You will find that the odometer readings on many Japanese cars are lower than you would expect of vehicles in other countries. In Japan’s major cities car use is very restricted – many people commute using public transport – and cars are used less frequently than elsewhere.

If the vehicle you want to buy is a Japanese import, make sure the dealer/seller has re-tuned the radio to New Zealand’s broadcasting frequencies. If this hasn’t been done, you’ll find that you won’t be able to listen to some radio stations in New Zealand.

Whatever the source of the new car, make sure you get two copies of the transponder key – this is the electronic key that operates the central locking and switches off the car alarm if it’s triggered.

The vast majority of modern cars use transponder keys.

If the dealer can only provide one transponder key, duplicates (these are a must!) cost NZ$100 – $200. Get the dealer to have a duplicate made at no cost to you before you agree to buy a car.

What’s Available?

Many of the vehicles that you’re familiar with in your own country will also be available in New Zealand. A number of American cars aren’t available because cars in New Zealand are driven on the left side of the road – like Australia, the UK and Japan.

Japanese and (to a lesser extent) British/European and Australian models predominate in New Zealand’s used car market.

Migrants often find that a car available in their home markets is available in New Zealand under a different name. For example, the American/Australian Toyota 4Runner is called the Toyota Hilux Surf in New Zealand.

Where to Buy a Used Car in New Zealand?

Used cars for sale can be found on the Internet at autotrader.co.nz and trademe.co.nz.

Trademe is an auction site (it’s the New Zealand equivalent of ebay). Most of the cars for sale on Trademe are offered by used car dealers at a fixed price. Some cars are auctioned or offered at fixed prices by private sellers.

Private individuals and dealers also advertise in Trade and Exchange, a weekly newspaper published in each of New Zealand’s main cities with local listings.

You can also buy used cars at auctions in New Zealand, the largest of which are run by Turners. Looking at individual cars here is quite useful because Turners place estimates on the price each car will sell for.

Whoever you are buying from, you could take along a mechanic to inspect on your behalf, or arrange for the vehicle to be inspected at an AA testing centre prior to handing over your money.

Checking a Used Car’s History

You can check the history of used cars by purchasing a VIR (NZ$30) or an AA Lemoncheck (NZ$25). These checks enable you to check the odometer history and to discover whether the person selling the car is the actual owner. You can also find out whether the seller has an outstanding loan on the vehicle. This is especially important if you are buying from a private seller rather than from an accredited dealer. If there is outstanding finance on a vehicle, the finance company will remain the legal owner of the vehicle until the loan is paid off. Make sure you run the check on the same day as you purchase the vehicle.

Examples of a VIR and a Lemoncheck are shown here and here.

Warranty – Any Guarantees?

All cars sold by licensed motor vehicle dealers (LMVD) in New Zealand are covered by the consumer guarantees act for motor vehicles.

You should read through this yourself, but basically it says that if the car doesn’t do what a reasonable consumer would expect it to do, you are entitled to a full cash refund.

Vehicles sold by dealers must be:

• fit for the purposes goods of that type are normally used – e.g., a 4-wheel drive should be suitable for off-road travel
• acceptable in finish and appearance – e.g., a new vehicle should be free from scratches
• free from minor defects – e.g., the dashboard clock should be functional
• safe
• durable – i.e., the vehicle can be used for its normal purposes for a reasonable time after purchase

There is a test for deciding whether goods meet acceptable quality. It is called the “reasonable consumer” test:

“Would the reasonable consumer find the vehicle acceptable?” taking into account:

• the nature of the vehicle – e.g., new or second-hand, the type of vehicle
• the price paid
• any information on the vehicle (including vehicle details on the Supplier Information Notice)
• any statement the dealer made about the vehicle

In addition to the statutory guarantee, some dealers will also provide purchasers with a further 3 months / 5,000 kilometre mechanical warranty – if it’s not offered, ask for it to be included in the sale price.

Different levels of protection are offered by law, depending on whom you buy the vehicle from and your intended use for the vehicle. These levels of protection and further advice are outlined here by the Department of Consumer Affairs on buying vehicles.

The Paperwork – Registration, Warrant of Fitness (WOF)

When you buy a car in New Zealand, both you and the seller are required by law to notify NZ Transport Agency of the change of ownership within seven days of the sale.

If you buy a car from a dealer, they may complete some or all of the change of ownership process on your behalf. If they are doing your paperwork for you, check with them that they have actually done it.

A warrant of fitness (a safety inspection certificate) is a legal requirement for vehicles in New Zealand.

• Vehicles first registered less than six years ago must have an annual WOF inspection.
• All other vehicles must renew their WOF every six months.

All cars for sale should have a newly issued WOF (issued within the last month). Buyers can insist on the WOF being less than one month old.

More information is available from the NZ Transport Agency

Negotiating the Price – Buying Cheaper

People with good negotiating skills will get a better deal than people who don’t bother to negotiate over their car purchase.
You will often be able to negotiate ten percent off the price of used cars with dealers – but if you have researched the market carefully, you will find these dealers have often inflated their prices expecting to ultimately give the discount.

Solid research is the key to knowing prices and is also the basis of effective negotiation.
The ultimate key to pushing a dealer to the best price he’ll give you is to walk away from a negotiation, saying you’ll think about things and might come back another time.

Car dealers know that you very well might not come back and many will lower their price (if they have any room left to) if they think you are genuinely walking away.


Comments

  1. G’day cobbers, is there any stamp duty or other taxes on cars in NZ?

    • Hi Ozzie,

      Unlike in Australia there is no luxury car tax or stamp duty on car purchases. In general, the advertised price you see is the price you pay.

  2. Hi
    After we purchased our car we were told there was only one transponder key for it as one had been lost. Is the dealer obliged to provide us with a replacement responder key? They have offered a manual key but the car is a 2010 model and still under warranty.
    Kath

  3. Eric Shinn says:

    Hello,

    Great advice here, but you may want to update the name from Land Transport Authority to their new name the NZ Transport Agency (www.nzta.govt.nz).

    Cheers – Eric

  4. Deborah Brown says:

    Hi. The vehicle im buying does have money owing to a finance company. However, the seller wasbup front about it, but needs the payment from me to pay off his loan.
    Its a catch 22 because ive been told not to hand over the money until the car is paid off.
    What do i do????

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