Second-hand car warranty in NZ: What are you legally covered for?

There’s nothing quite like the feeling of driving away in a ‘new’ used car. But that excitement can turn into a headache pretty quickly if a warning light starts flashing on the dashboard a week later.

For many Kiwis, the immediate panic is about the cost. Who pays for the repairs? Did you sign a warranty? Does it even matter if you didn’t?

Luckily for us, New Zealand has some of the strongest consumer protections in the world. In this guide, we’ll break down exactly what you’re covered for, the legal rights that dealers can’t wiggle out of, and how to avoid the pitfalls of buying a lemon.

Consumer rights when buying from a dealer

If you buy a vehicle from an officially registered motor vehicle trader, you have a safety net that exists whether you signed a specific warranty document or not.

This protection comes from the Consumer Guarantees Act (CGA). It overrides any "as is, where is" signs the dealer might have put up. In fact, dealers cannot contract out of the CGA for personal purchases.

What is "acceptable quality"?

Under the CGA, a car must be of "acceptable quality." This means a reasonable person would regard the vehicle as:

• Safe to drive: It must be fit for its normal purpose.
• In good technical condition: It should be durable and last for a reasonable time.
• Free from significant defects: Minor issues might be okay on an older, cheap car, but major failures aren’t.
• Clearly documented: It must match the description given in advertising or by the salesperson.
• Properly repaired: If it was involved in previous incidents, repairs must be up to standard.

Common exclusions and limitations

The CGA is powerful, but it doesn't cover everything. You generally aren't protected by the Act if:

• You bought from a private seller (someone not in trade).
• You bought the vehicle for business use and agreed in writing to contract out of the CGA.
• You bought the car for resale or to supply in trade.
• The fault was specifically pointed out to you before you bought the car.

What if the car doesn’t meet the CGA requirements?

If your car doesn’t meet the mark, it’s the seller who has the responsibility to fix it.

For minor faults, the dealer must repair the vehicle – and within a reasonable time. If they refuse or start dragging their feet, you can go and get it fixed elsewhere and claim the costs back.

For serious faults, like if the car is actually unsafe or has issues that mean a reasonable person wouldn't have bought it if they knew about them, you have the right to reject the vehicle. That equates to a full refund, a replacement of similar value, or the option to keep the car and claim compensation for any losses in the value.

It’s very important in these situations that you never try to repair the car or modify it in any way before you contact the dealer. By attempting to change it by yourself you may end up voiding your chance to claim later on.

How does the Motor Vehicle Sales Act protect consumers?

While the CGA covers the product, the Motor Vehicle Sales Act (MVSA) covers the trader.

This Act requires anyone selling more than six vehicles a year (or importing more than three) to register as a motor vehicle trader. They must display a Consumer Information Notice (CIN) on every used vehicle. This card details the price, year, mileage, and whether there is any money owing (security interest) on the car.

What is (and isn’t) typically covered in a used car warranty

It’s important to distinguish between your statutory rights (CGA) and a mechanical warranty. The CGA is the law: a used car warranty in NZ is an insurance contract you or the dealer pays for.

While the CGA covers any fault that makes the car "unacceptable," warranties have specific lists of what is in and what is out.

Typically covered:

• Engine: Internal parts like pistons, crankshafts, and oil pumps.
• Transmission: Gearbox internals and torque converters.
• Electrical: Alternator, starter motor, and central locking.
• Steering and suspension: Steering racks and control arms.
• Brakes: Master cylinders and ABS modules.

Typically excluded:

• Wear and tear: Brake pads, tyres, wiper blades, and batteries.
• Cosmetic damage: Paint, upholstery, or trim.
• Pre-existing faults: Issues present before the warranty started.

Duration and cost of used car warranties

Many dealers include a standard 3 month warranty on used cars NZ (which is often capped at 5,000km), which is intended to give buyers some peace of mind.

However, you can purchase extended coverage. When researching the 3 year mechanical warranty NZ cost, prices are going to vary – and it’ll all come down to what vehicle you’re looking at, as well as the provider (like Autosure or Provident).

• Standard cost: Typically between $300 and $600 for one year.
• Long-term cost: Up to $1,000–$2,000 for four years.

The price is going to hinge heavily on the car’s make, model, age, and mileage (odometer reading).

What can void a used car warranty?

Having a warranty doesn't stop the need for maintenance. There are still certain expectations you need to meet. The warranty coverage might be voided if you:

• Miss a service: There’s usually a service at every 15,000km for petrol cars which needs to be seen to.
• Use the wrong fluids: It's a bit of a no-brainer, but putting the wrong oil or coolant in the engine is a voidable offence.
• Modify the vehicle: Although performance chips and dropping the suspension can seem cool, it has an effect on the warranty.
• Misuse: Forget about off-roading in a sedan, and be careful about overloading, like towing loads heavier than the rated limit.

What to do if a dealership sells you a faulty car in New Zealand?

Number one is don't panic (of course!). If it turns what you got actually is faulty, simply go through these steps and work out the issue legally and effectively.

1. 1.Check the fault: Confirm the fault is there (not just a flat tyre or empty petrol tank.)

2. 2.Stop driving: If you feel the car is unsafe or driving it will cause more damage, pull over.

3. 3.Contact the dealer immediately: Do this in writing (email is best) so there is a paper trail.

4. 4.Present the vehicle: Once the dealer arrives, give them a chance to inspect and repair.

5. 5.Negotiate a remedy: Agree on a repair, refund, or replacement based on the severity of the fault.

Tips for going back to a dealer

• Bring proof: Have your sale agreement, the original ad (if possible), and photos of the fault.
• Be specific: State clearly if you want a repair or a refund.
• Bring support: Having a witness can help keep the conversation professional.
• Stay calm: Getting angry rarely speeds up the process. Stick to the facts.

What to do if the dealer disagrees or won’t cooperate

If the dealer ignores you or refuses to fix a genuine CGA issue, you have backup.

• Motor Trade Association (MTA): Provided the dealer is part of the MTA, they could step in and offer to act as a go-between. This is a bridge to help find the solution without having to go to court.
• Motor Vehicle Disputes Tribunal (MVDT): This is the heavy hitter. The MVDT handles complaints against traders. It is efficient, with 97% of matters resolved within six months.
• Official Reports: You can also report dodgy dealers to the Motor Vehicle Traders Register or the Commerce Commission. While they might not get your money back directly, your report helps enforce the law and protects other Kiwis.

What if you bought a car on finance?

This is a critical area where many people make mistakes. If your car breaks down, do not stop your finance payments.

Stopping payments can wreck your credit score and lead to the car being repossessed, leaving you with no car and a debt to pay.

Instead, contact your finance company immediately.

• If the dealer arranged the finance, the finance company shares responsibility under the CGA.
• This means they must help provide a remedy, which is a lifesaver if the dealer has closed down or gone bust.

What to know when buying from a private seller

Buying from a private seller is a different ball game. You have no CGA protection and usually no warranty. It is strictly "buyer beware."

To protect yourself, you must do your homework:

• Get a mechanical inspection: A WoF is just a safety check, not a mechanical guarantee.
• Ask for service history: See if the car has been looked after.
• Run a car history check: Ensure that money isn't owed, and the odometer is real.

Check the car’s history with carVertical before buying

This is where carVertical’s history check can really pay for itself. The vehicle history report can take a deep dive into what’s behind the car's past, and goes a long way to uncovering any secrets that a private seller (or a dishonest dealer) might be trying to hide.

Mileage is key, with the report carefully tuned to focus on odometer readings – a serious issue in NZ lately. Accurate mileage is really important because it can reveal so much about the car's true value, its wear and tear, and how much life it has left.

What you might not know is that, in New Zealand, many mechanical warranties have limits based on the odometer (as in, coverage could end once the clock hits 150,000km). If you buy a car with a rolled-back odometer, you might end up thinking you are covered, when in fact you find out later that your warranty is bitterly void and you're on the hook for expensive repairs.

Can you always rely on a dealer’s word?

Unfortunately, not always. Even with strict laws, there are going to be bad actors somewhere.

Take the case of Seven Seas Motors, when a buyer purchased a Jaguar XJ with an odometer reading of 25,000km. Later, when the engine failed, the checks made by qualified mechanics showed the car had, in fact, over 188,000km on the clock, with a massive rollback of 163,000km.

In another case, there was a scammer on Trade Me known as "Kar Guru". In this case, they ended up taking deposits from at least 16 buyers, promising them Japanese imports that, unfortunately, never arrived.

These aren't isolated incidents. In order to combat these and similar types of issues, New Zealand continues to maintain a Banned Persons List, which contains individuals who are no longer allowed to trade cars. It’s always worth checking this list and running your own independent history checks. It doesn't matter how nice the dealer seems – trust the facts, not the sales pitch.

Checking the history first is the best defence to save you from financial disaster and legal battles.