An Auckland car dealer has been ordered to pay nearly $8,000 for engaging in misleading conduct over the history of a vehicle that had previously been written off in an accident.
Shore European Consulting Group Ltd (SECG) was ordered to pay Maxwell Flaws $7,970.75 by the Motor Vehicle Dispute Tribunal.
Flaws bought the 2003 BMW M5 in November 2016, from Vance Hibberd, a director of SECG.
While Hibberd sold the vehicle independently, SECG was integrally involved in the sale.
Flaws claimed that he was misled by Hibberd, as discussions prior to purchasing the vehicle never revealed the true history of the BMW.
Flaws claimed that he had asked Hibberd if the vehicle had previously suffered accident damage. Hibberd allegedly advised Flaws that the vehicle showed no sign of an accident, but that it had been deregistered in 2006 because of legal proceedings resulting from a family inheritance dispute.
However, after purchasing the vehicle, Flaws discovered that the BMW was in fact deregistered in 2008 as a result of an accident that left the car requiring extensive structural repairs.
In its determination, the tribunal said it was satisfied that the representation of the vehicle was misleading to Flaws.
"I am satisfied that the representation that the vehicle had no sign of accident damage and was deregistered because of a family feud would give a reasonable consumer the impression that this vehicle was not written off because of accident damage," the tribunal said.
"This representation was misleading. The vehicle was not deregistered because of a family feud. It was deregistered in 2008 because it had been written off following an accident. Flaws provided photographs taken while the vehicle was being repaired. It is evident that the vehicle suffered significant structural and panel damage, particularly to the front and driver side rear of the vehicle."
The tribunal ruled that Flaws had suffered loss as a result of being misled, and that the vehicle is now worth less than the $38,350 he paid for it because of its history.
This was further emphasised by three valuations from Calais Motor Court Ltd, A Motor Company Ltd and Cooke Howlison BMW obtained by Flaws.
"A stigma attaches to vehicles that have previously been written off, which affects the resale value of those vehicles. I have seen evidence of this stigma in many similar cases heard by the Tribunal, particularly in relation to written off vehicles imported from Australia. That stigma is evident in the valuations from Calais Motor Court Ltd and A Motor Company Ltd obtained by Flaws, which both note that the vehicle's value is affected by the fact that the vehicle has previously been written off," the tribunal said.
The valuations put a value on the vehicle at $23,000, $24,500 and $26,000 respectively. Hibberd, who has some experience previously selling written off vehicles, said the car is worth in the "low $30,000s".
The tribunal considered $28,500 – an approximate midpoint between the valuations – to be the vehicle's current retail value, therefore Flaws had suffered a loss of $9,850.
A further $2,000 was taken off that total as Flaws had driven the vehicle for roughly 6,000kms over the 16 months he had owned it.
The Herald has contacted Hibberd for comment.
- NZ Herald