Used motor vehicle dealer, 2 Cheap Cars Ltd has been fined $438,000 by the Auckland District Court for its use of “warranty waiver” documents and for its “liquidation sale” and “84% off” advertising claims.
The charges relate to the offers made for the sale of used motor vehicles between 1st Jan 2014 and 31 Dec 2017.
2 Cheap Car dealer was asking used car buyers to sign a “warranty waiver” document if they chose not to purchase an extended warranty.
In his judgement, Judge Robert Ronayne said the waiver “is blatantly untrue and misleading”and that “(b)y means of misinformation and untruths” the waiver creates an impression that unless an extended warranty is purchased the purchaser had no rights.
The “waiver” included terms such as: “The vehicle you are purchasing does not include a warranty of any kind; ” “I do understand that 2 Cheap Cars will comply with the Consumer Guarantees Act. I also understand that I am, and would prefer to be, solely responsible for any repair bills;” “if any repairs are carried out it will be done by 2 Cheap Cars [L]imited at a time of their convenience and that there are no courtesy cars provided.”
In fact, consumers had the protections of the Consumer Guarantees Act (CGA), which applies to used and new goods, including vehicles.
In advertising for its 30 September and 1 October 2017 sales, 2 Cheap Cars made statements including, “Japanese imported vehicles liquidation sale,” “2 Cheap Cars is in hot water, it must liquidate immediately,” “A massive price drop this weekend!”
Judge Ronayne said this advertising was “deliberately misleading.” In fact, most of the 710 vehicles then for sale nationwide were not discounted at all or had discounts of as little as $5, and 2 Cheap Cars was not in, or going into, liquidation.
Similarly, the the 2 Cheap Cars’ newspaper advertising “84% off” was “misleading.” The discount was not off the price of a vehicle but off the price of a $300 GrabOne voucher that could then be used towards purchasing a vehicle.
2 Cheap Cars had earlier pleaded guilty to 10 charges under the Fair Trading Act 1986, following a Commerce Commission investigation opened in November 2017.
Click to read our earlier story of employment breaches by 2 Cheap Cars: https://www.newsviews.co.nz/car-dealer-penalised-for-employment-law-breaches/