The van was listed at a starting price of $1 and Hooker placed the winning bid of $5,310.
Shortly after he bought the vehicle, Hooker found its cylinder head was cracked and the head gasket damaged.
Hooker took his dispute to the Motor Vehicles Disputes Tribunal, claiming the van needed a replacement cylinder head and other work estimated to cost about $3000.
The tribunal appointed an expert assessor and concluded that Warren's claims in the Trade Me ad were false and misleading.
"The Tribunal is satisfied that Mr Hooker was misled and that Mr Warren's conduct was the effective cause of Mr Hooker's loss or damage.
"Instead of receiving a reliable vehicle as Mr Warren promised the vehicle was in three statements in the advertisement, Mr Hooker received a vehicle which had a blown head gasket and a cracked cylinder head."
Hooker would not have bought the van if he had known that its engine was so badly damaged, the tribunal said.
Warren was ordered to pay Hooker $2,163 for the cost of repairing the vehicle.
Hooker had to make two trips from Hamilton to Auckland to attend the hearings and pay parking costs in Auckland City, amounting to $226. Warren was also told to pay this amount.