Consumers will be better protected when they buy or sell a used vehicle, Consumer Affairs Minister Yvonne Henderson announced today.
"A range of amendments to legislation dealing with motor vehicles has been approved by Cabinet," Mrs Henderson said.
"Buyers of used cars, for instance, will have a cooling-off period during which they can change their minds.
"And a fidelity fund will be established to protect vehicle buyers should a dealer default."
Other amendments include:
· A standard form of contract will be required and a copy of the contract must be given to the buyer;
· penalties for unlicensed dealing will be increased from a maximum of $3,000 to a maximum of $10,000, plus forfeiture of profits; and other penalties under the Act will be doubled;
· the Motor Vehicle Dealers Licensing Board will be able to prescribe codes of conduct for dealers, yard managers and sales people; impose fines for breaches of these codes, and suspend their licences;
· introduction of an infringement notice system, where dealers can pay on-the-spot fines for a range of offences. This will save red tape and time;
· vehicle registration numbers will now have to be included in all vehicles sales advertisements, including private individuals', to help detect unlicensed dealing.
Mrs Henderson said a 24-hour cooling-off period would become a standard condition of the sales contract.
"The cooling-off period will not apply to private sales, public auctions, new vehicles, and buyers who are car dealers or businesses.
"Country consumers and others who face hardship due to distance will be able to seek a waiver from the cooling-off period.
"The fidelity fund will recompense consumers for loss in a range of situations where a dealer becomes insolvent," she said.
"It will apply if, for instance, a dealer goes out of business and fails to comply with the Motor Vehicle Dealers Act by not satisfying the warranty requirements.
"It will also apply if the dealer fails to comply with a consignment agreement; fails to transfer absolute title; or fails to comply with an agreement with a buyer to pay off finance on a trade-in.
"The fidelity fund will be financed mainly by annual contributions from the industry.
"I am confident that these changes will provide a clear framework for both consumers and dealers, which will allow all parties to be better informed about their rights and obligations."