Selling the consumer guarantees act as warranty?

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CamH

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#191091 23-Jan-2016 11:16

Had an interesting experience at a car dealership yesterday - we found a car via TradeMe and went in to take a look. The car was in an OK condition and the fact it came with a "6 month mechanical warranty" was what made us very interested in the car.

We got right down to the getting a sale agreement/quote drawn up, at which point they told us the "6 month mechanical warranty" didn't actually apply to us because it was a business purchase. Turns out they're selling the CGA as a warranty to people who simply do not know better!

Does anyone know what the legalities around this are? Very sneaky sales tactic that's for sure...

PeterReader

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#1477211 23-Jan-2016 11:16

Hmmmm. Here we go.

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gzt

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#1477227 23-Jan-2016 11:25

Offering a warranty that does not exist? Well no, if they say it then they have to provide it, so it kind of does exist.

If they do not offer the same warranty terms on a business purchase, well I think it is legal to have different warranty terms for commercial use. There may be a problem if they are not clear about that.

gregmcc

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#1477275 23-Jan-2016 12:37

CamH:

Had an interesting experience at a car dealership yesterday - we found a car via TradeMe and went in to take a look. The car was in an OK condition and the fact it came with a "6 month mechanical warranty" was what made us very interested in the car.

We got right down to the getting a sale agreement/quote drawn up, at which point they told us the "6 month mechanical warranty" didn't actually apply to us because it was a business purchase. Turns out they're selling the CGA as a warranty to people who simply do not know better!

Does anyone know what the legalities around this are? Very sneaky sales tactic that's for sure...

Depends how you are paying for it, personal funds or business funds?, are you registering it to a business?

The CGA does not apply to business users, but the fair trading act does

itxtme

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#1477348 23-Jan-2016 14:38

Gregg I think he is more questioning the validity of using the CGA as a "warranty" for the purposes of giving sellers peice of mind as opposed to whether or not it should cover him as a business.

I think this practice would highly likely be in breach of the fear trading act. The car does not come with a warranty, it is merely covered by the same legislation as any other goods or service obtained in NZ. This means the car yard is misleading consumers and would be in breach.

gzt

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#1477394 23-Jan-2016 15:53

A six month warranty is clearly part of the offer. I would expect them to at least write 'six month warranty' on the sale docs. The fact they want to withdraw that for business use is probably up to them.

CGA in many circumstances will add to that six months for consumer anyway.

NonprayingMantis

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#1477405 23-Jan-2016 16:50

It's very common for warranties not to apply when a product is used for commercial purposes.

Makes sense, because commercial use is typically far more intensive than consumer use e.g. Cars would rack up far more kms, TVs stay on all day, ovens cook hundreds of meals per week etc etc.

Any warranty the dealers advertises does not replace CGA - generally a warranty means it is just easier to get something fixed rather than having to take them to small claims court.

Wade

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#1477432 23-Jan-2016 17:55

I was under the impression there is little scope for CGA action on used cars?

I'm sure the warranty being offered is a mechanical warranty which covers aspects that you would be lucky to correct under CGA action

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gzt

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#1477464 23-Jan-2016 19:55

Who knows, not enough in the FP.

CGA applies to cars like anything else.

http://www.consumeraffairs.govt.nz/for-business/compliance/selling-cars-motor-vehicles/consumer-guarantees-act-for-motor-vehicle-traders/consumer-guarantees-act-what-you-need-to-know

Op might negotiate a fixed km warranty but

CamH

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#1477466 23-Jan-2016 20:00

Sorry, maybe I didn't make it clear enough. I'm well aware that the CGA (under most circumstances) does not apply to business purchases, but they are claiming that they are giving a 6 month warranty to the purchaser of the vehicles, but it's not a warranty at all - when you get down to the fine print, this warranty they're offering you is actually the CGA - they're selling an act, which is required by law under the guise of a warranty. Very dodgy sales tactic I thought.

gzt

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#1477548 23-Jan-2016 20:47

It is hard to know because you did not get to that part. All they need to do is write six month warranty on the sale documents and that is done.

But yeah taking literally what they told you would happen in a retail sale is - no formal warranty catch us with CGA if you can - that would be bad indeed.