William owns a 2002 high-mileage used VW Beetle cabriolet import which is starting to run up unwanted repair bills.
One of the electric rear side windows developed a problem, which also meant the electric soft top roof could no longer be operated.
The cost to repair this, including parts and labour, was around $1200.
On top of that, the automatic transmission lost drive temporarily and would work only in manual mode. While the transmission seems to have made a miraculous recovery all on its own, a transmission specialist has carried out a service, including clearing a fault code from the computer.
The transmission is operating at the moment, but the specialist would give no guarantees the fault would not reappear, and estimated the cost to strip and recondition the transmission would be around $4500.
Question is: where does William stand legally if he sells the car privately, knowing it could have an expensive transmission repair looming.
It's a case of buyer beware when purchasing privately, but the seller should not deliberately misrepresent the vehicle.
For example, a seller cannot advertise that a vehicle has a fully reconditioned engine if the only recent work done was a full service (don't laugh, it has happened).
If it can be proven a buyer was deliberately misled, they can take legal action against the seller.
If the claim is for $15,000 or less and is disputed, then it may be heard by the Disputes Tribunal rather than in a formal court process.
Any verbal comments made between the two parties are obviously the hardest to prove later as often assumptions are made and some comments can be taken out of context.
The golden rule should be for the buyer to assume very little, try to ask specific questions and get an independent mechanical inspection made, especially if they have limited mechanical knowledge and are in any doubt about the mechanical condition of the vehicle.
In William's case, he is under no legal obligation to say the transmission may fail soon. It might not.
But he shouldn't claim the transmission is bullet-proof because it has just been serviced.
It's best to have a policy (within reason) of letting any prospective buyer check the vehicle out thoroughly and simply answer any questions as truthfully as you can.
There must be hundreds of cars sold each year because potential expensive repairs are looming for owners.
As the seller, you can ensure the car has a warrant of fitness less than one month old, as a gesture of goodwill to satisfy the buyer there are no obvious mechanical or safety related defects before the sale.
Buying privately is a risk people have to weigh up in comparison to purchasing from a registered dealer.
Vehicles sold by a dealer and acquired for personal or domestic purposes, must be fit for purpose and are covered under the Consumer Guarantees Act and the Fair Trading Act.
All information displayed, including the must-have consumer information notice, must be correct and in no way misleading.
Both acts cover car-yard traders, importers and wholesalers selling to the public.
They also include unregistered motor vehicle traders.
So if, for example, a transmission developed a problem a short time after sale and was sold by any of the people covered by the two acts, the buyer can return the vehicle and ask for it to be repaired free of charge.
The grey area, however, can be how long and after what distance was travelled after the sale that the fault appeared.
The buyer can seek independent support and advice if they felt they were treated unfairly by the trader.
Private, auction or competitive tender sales are not covered by the the Consumer Guarantees Act or the Fair Trading Act.
Cars sold at auction are covered under the Sale of Goods Act, which says the vehicle must be of merchantable quality, fit for its purpose, reasonably roadworthy and in a good enough condition to be sold.
But auctioneers can contract out of the Sale of Goods Act at the time of sale.
They can do this by making a statement at the auction or posting a notice in the auction rooms saying the Sale of Goods Act does not apply.
So, as with purchasing privately, it always pays to do the checks, be aware of the risks and set a price limit on what you are prepared to pay.
In general, a vehicle should always be cheaper buying privately or through an auction because there is more risk for the buyer.
Your other option is to trade the vehicle in with a dealer.
They are street-wise and may send the car straight to auction if they don't want to keep it on their yard.
But don't get upset if you get beaten up on the trade-in price. The dealer is inheriting the seller's problems, and needs to have a built- in profit margin when negotiating the trade.