Buyer beware: New rules likely on Aussie write-off car imports

New regulations will mean written-off vehicles would need to be specified as such by a dealer. Photo / Greg Bowker

Used car buyers are likely to soon get clearer information from dealers – including whether the vehicle was once declared a write-off.

The Ministry of Business, Innovation and Employment (Mbie) has confirmed a review of disclosure regulations is likely this year.

There has been long-running concern about vehicles that have been declared statutory write-offs in Australia being imported to New Zealand, repaired and on-sold.

Some customers have said they were unaware a car had been a write-off before they bought it, and Mbie is now moving to amend the Consumer Information Notice (CIN), which must be attached to all used motor vehicles offered for sale by a trader.

The notice requires traders to disclose if a vehicle was recorded as damaged at the time of its importation and officials will now look at whether dealers should also specify if a vehicle was imported after being declared a write-off.
A statutory write-off could mean anything from crash damage to hail or water damage.

In September 2016 the NZ Transport Agency (NZTA) introduced new rules requiring electronic safety components such as airbags, sensors and wiring be replaced in water-damaged light vehicles. Previously, only items below the water line had to be replaced.

The changes applied to vehicles damaged in New Zealand as well as imported vehicles. NZTA said there had been concerns about the quality of repairs, and cases where people had masked or misrepresented water damage levels.

MTA dealer and mediation specialist Tony Everett said those tougher standards would make it much more uneconomical for dealers to bring in write-offs from Australia to sell.

"I guess that is what it was trying to do – set in place a barrier. With a low value car, you just wouldn't bother."

Everett said the MTA welcomed the review of information disclosure requirements, having previously raised the issue with the former Government.

However, data was still lacking about damaged vehicles coming from countries other than Australia. The NZ Transport Agency has previously tried to get similar information from Japan, where most imports come from, but a write-off register does not exist there.

In May 2016 Trade Me announced it was requiring disclosure of write-off status for all motor vehicles listed on its website, saying it was concerned about safety.

"Consumers need to know the accurate history of a vehicle," Trade Me said.

"We're aware of cases where consumers have paid the same price for vehicles that have been through the statutory write-off process as they would for vehicles that have not suffered significant damage."