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Buying And Selling A Second Hand Motor Vehicle (Part II)

Buying And Selling A Second Hand Motor Vehicle (Part II)
fijisun.com.fj
April 18
10:39 2016

 

This week we continue with the issues relating to buying and selling of a second hand motor vehicle in Fiji.

This week’s article focuses on important issues such as mechanical components that should be covered under the warranty, advertising for sale a second hand motor vehicle, use of “As Is Where Is” during the sales transactions and availability for facilities for repairs and spares.

 

What is covered under Mechanical Warranty?

 

Under Section 31 of the Land Transport (Vehicle Registration and Construction) Regulations 2000, the operator of a vehicle dealing business MUST PROVIDE on all vehicles sold, including by auction or tender a mechanical warranty of not less than 3 months or 6,000 kilometres, whichever occurs first, complying with the appropriate code of practice.

In recognition of the above requirement, the Code of Practice has been developed by the Land Transport Authority as required under Section 38 of the Land Transport Act 1998.

The code of practice lists the following mechanical components that should be covered under warranty which includes the removal and replacement of these mechanical components:

 

 Engine – engine block, cylinder head, crankshaft, camshaft, pistons & pins, bearings and rings, conrod, rocker assembly, valve lifters, valves, valve springs, gears, timing chains or timing belts, bell pensioners and guides, oil pump and oil sump.

 

 Transmission or Gear Box – torque converter, gears, shafts, bearings. Synchros, hubs, valve unit, servos, valve body, bands and casing (all components inside casing).

 

 Differential or the Final Drive – Crown wheel, pinion, carrier bearings, pinion bearings and planetary gears.

 

 Transaxle – differential unit, gears, bearings, shafts, synchros, servos and hubs.

 

 4×4 Front Differential unit and hub/ differential carrier (excluding free wheel hubs).

 

 Propeller Shaft (excluding lube and balancing).

 

 Braking System – master cylinders, wheel cylinders, callipers (excluding rubber dust cover, piping and friction surfaces).

 

 Steering – power steering pumps, all internal parts of steering box/ rack and pinion (excluding rubber dust covers and piping).
 Fuel System – fuel pump, air flow meter, fuel accumulator, fuel distributor and warm up regulator (excluding fuel injectors, glow plugs, throttle bodies, carburettor assemblies and failure attributable to fuel).

 

 Cooling System – Radiator, water pump, thermostat, viscous coupling and engine cooling fan assembly.

 

 Driveshaft – all components including CV joints (excluding rubber dust covers).

 

 Suspension – wishbones, bushes and ball joints.

 

 Clutch – Release bearings, master cylinders and slave cylinder (excluding friction surfaces and cable).

 

 Wheel Bearings- all sealed wheel bearings only.

 

 Casing – Engine block, gear box casing and differential housing.

 

The trader must ensure that the warranty document is given to the customer in writing.

 

Advertising for sale a second hand motor vehicle?

 

A trader of the motor vehicle must ensure must ensure that the any advertisement (either print, air, television, billboards, brochures, online, social media, etc) comply with the requirements under the Commerce Commission Decree 2010 or any other relevant laws and regulations.

 

CCD2010 does not restrict a trader from engaging in creative and innovative marketing and advertising techniques. However, it restricts advertisements which are misleading, deceptive, false or used as bait.

 

Some of the key statement of fact that a second hand dealer should include in advertisements to ensure compliance with CCD2010 are:

 

Vat Inclusive Prices;

Full disclosure on all other fees and charges to be paid by the buyer;

True Year, Make and Model ;

True Mileage;

Must not use the word from a particular price (E.g. From $19000). In any case the word from is issued, the trader must state how many units are available at the lowest advertised price (from price), the colours for which the price is/are applicable, features (year, make, Model, Transmission type, etc).

For a trader with multiple outlets, if the vehicles are not available in all branches, the advertisement must clearly state either in which branches are the vehicles or which branches does not have the stock.

Simply putting conditions apply or the stock may not be available in all branches etc is not sufficient;

No more than the advertised price should be charged;

             Must not publish any advertisement containing a false or misleading statement of fact;

Represent that the vehicles are new or unused, if they are not or are reconditioned or reclaim.

Falsely represent that vehicles  are of a particular standard, quality, style or model or have had a particular history or particular previous use which they do not have;

Make representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy that person does not have; and

Any other relevant information that may affect the consumer’s decision.

 

What to Know about ‘As is where is’ Basis

 

“As is where is” is a term commonly used in the sale of second hand motor vehicle where the seller offers it for sale in its existing state and condition.

The motor vehicle dealer bears the sole responsibility in consideration of fairness to disclose via advertisement or other means all relevant information about the vehicle to consumers in accordance with the Commission’s required checklist, should at least include the following:

Any defects in the vehicle whether mechanical or structural;

The vehicle’s previous accident or insurance write off history;

Any discrepancies in the mileage or service history of the vehicle;

Vehicle ownership history for all pre-registered vehicles in Fiji;

Whether and if the motor vehicle is certified by LTA for road worthiness (‘fitness test”)or not;

Reserved price/sale price;

The previous use of the vehicle, for instance, business, family or any other;

Any other important records known to the trader to be available with LTA or police or insurance company about the vehicle;

Whether and if the vehicle has explicit or perceived damages through natural disasters like flood or cyclone; and

Terms and conditions of the Warranty.

 

A motor vehicle dealer should not rely solely on the term ‘as is where is’ basis as a ground to evade any cause of investigation into their negligence or intentional failure to disclose what is reasonably required above. It may be deemed a breach of the Commerce Commission Decree 2010 (CCD2010) not to observe any of the requirements set out above.

 

All the relevant information disclosed during the sale of a motor vehicle on “as is where is basis”, must be documented, signed by all relevant parties in duplicate and the original given to the consumer.

A trader must ensure that all information likely to affect the customers decision must be disclosed to the customer and then the customer be asked to make an independent decision whether he/she still intends to be buy the vehicle on the  “As Is Where Is “ basis.

 

Supply of facilities for repair or parts (Section 118 of CCD2010)

 

A motor vehicle dealer must disclose in writing to the consumer the availability of facilities for repairs or parts before the sale of such vehicles.

The dealer should also ensure that supply of facilities for repair or parts including the consumable parts (filters, fluids, batteries for hybrid vehicles) must be readily available and provided to the consumer upon request within a reasonable time.

The dealer should provide details of the location where the facilities are located and the conditions and scope of the back-up services provided.

A motor vehicle trader who sells a vehicle with a particular specification/model, which is not imported by the authorized dealer in Fiji, must ensure that all consumable parts for the subject vehicle are readily available locally. If the consumable parts are not available with the authorized dealer then the trader is liable to provide them at the market price, if the parts are supplied outside the warranty period.


Bobby Maharaj is the chief executive of the Fiji Commerce Commission. This is a regular column from the Commission in the Fiji Sun.

 

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