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Buying a new-to-you car is equal parts fun and stressful - awesome when you find something you love for a good price, but scary if hidden problems make the deal too good to be true. But did you know that in New Zealand, you’re protected by ‘lemon laws’ that provide remedies for defective vehicles?
Here’s how they help keep you and your money safe.
We’re not talking about the fruit! A ‘lemon’ is a vehicle that has a major problem that can’t be fixed after a reasonable number of repair attempts (think around 3 or so), including both new and used cars. This defect must affect the vehicle's safety, value, or usability.
Examples of defects that could make a vehicle a lemon include:
Basically, if a car you buy has a major problem with it that makes it difficult (or impossible) to drive it, it can be considered a lemon.
Lemon laws are laws that protect consumers who have purchased a defective vehicle. In New Zealand, these laws are found in the Consumer Guarantees Act (CGA) and the Fair Trading Act (FTA).
These laws protect you against shady practices in all the things you buy. If you get tricked, lied to, or otherwise manipulated into buying something - including a car - then the CGA and FTA have your back by forcing dealerships to give you a repair, refund or other remedy.
If you buy a vehicle that turns out to be a lemon, the first step is to contact the seller or dealer. Under the Consumer Guarantees Act, you have the right to ask for a remedy, such as a repair, replacement, or refund. If the seller or dealer refuses to provide a remedy, you can file a complaint with the Motor Vehicle Disputes Tribunal or the Commerce Commission.
If the vehicle is still under warranty, you can also contact the manufacturer. The manufacturer may be able to provide a remedy or offer compensation. If the vehicle isn’t under warranty, you may need to seek legal advice.
You can also claim ‘consequential damages’, which are costs that you have to pay as a result of the vehicle being a lemon. A good example is if you had to hire a car to replace the lemon you bought. You may be able to get the dealer to pay for the hire costs too.
Lastly, if you bought the car on finance, you may be able to claim back your loan payments too, if the vehicle was proven to be a lemon.
It’s important to remember that cars bought through a private sale rather than a dealership - like buying a new set of wheels from a bloke on TradeMe - don’t have these protections. The Contract and Commercial Law Act does still apply in these cases though. Consumer can tell you more.
Lemon laws are an important protection for consumers who purchase defective vehicles in New Zealand. By understanding your rights under these laws and taking steps to protect yourself, you can make sure that you get a fair deal when purchasing a vehicle and keep spending your money wisely!
This was originally posted as an education article on the Money Sweetspot customer portal. If you read this as one of our customers, you would've earned some money off your loan! Do the mahi, get the treats. Find out more.
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