Used-car dealers are putting new parts into overseas vehicles to bring them into New Zealand - then putting the worn-out parts back in before sale, an industry watchdog says.
The Auckland Motor Vehicle Disputes Tribunal has urged the Government to close the dangerous loophole after dealing with three examples in one year.
It says the cases - including worn brake pads being illegally put into imported cars - could be the "tip of the iceberg".
Auckland adjudicator Christopher Cornwell says in his annual report that the tribunal has no way of knowing how widespread the practice is, but notes, "it is clearly profitable for a trader importing a number of the same type of vehicles".
The NZ Transport Agency is investigating the practice.
But the accused traders and the Imported Motor Vehicle Industry Association say swapping parts makes little financial sense.
Automobile Association policy analyst Mark Stockdale agreed but said that even if isolated, the practice endangered motorists.
"Few motorists would expect those parts to wear out within a month or two ... it's a very dangerous trend, which we hope is isolated."
This year about 75,000 used vehicles will be imported.
Each must have a safety check, and often worn or damaged parts will have to be replaced before the car is rechecked and allowed to be sold.
Mr Cornwell's report detailed three cases in which the tribunal believed that after the recheck, the old parts had been put back into vehicles.
Both traders involved in the three cases have denied the accusation.
In one case, Palmerston North woman Jennifer Millan bought a BMW for $10,800 from a trader which imports European vehicles.
The trader had been made to replace the front and rear brake pads and rotors on the vehicle.
But within four months and 2140km of use Ms Millan was told her front brake pads were worn out.
A tribunal assessor found photographs clearly showed the front brake pads had been used for much more than the distance driven by Ms Millan, and noted extensive rust on the rotors.
In another case, a trader sold a Mazda after receiving approval when headlight adjusters were fixed.
But when the purchaser found the lights fixed on high-beam she was told by a mechanic that the headlight adjusters were damaged.
The same trader sold another Mazda to Ronald Chandra for $13,000, after replacing the rear brake pads and rotors during compliance.
Five months later an angry Mr Chandra was told his brake pads were worn out and the left hand rotor damaged. "Not only was I endangering my life, but the people travelling with me and other motorists."
But the trader told the Herald the tribunal's accusations were "Disneyland stuff".
He said new rear brake pads cost him only $22 and in the other case the headlights were thrown out of alignment by work done after the sale. "The problem is you've only got to drive 5km with the handbrake on, and you've got an issue with brakepads."
In Ms Millan's case, the trader said for the sake of about $200 he couldn't justify the labour involved nor risk the company's reputation.
He had tracked down the invoice for the parts, and there were records for the thousands of other brake pads and rotors he had bought. The trader had not seen the photographs referred to by the tribunal, but said it had previously erroneously ruled without seeing physical evidence.
The Auckland Motor Vehicle Disputes Tribunal has recommended that invoices be supplied at compliance testing, and that old parts be handed over to be destroyed.
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