What makes you a Motor Vehicle Trader, why should you care

Buying and selling motor vehicles on Trade Me is as popular as ever.

We thought it would be a good time to remind sellers out there about the importance of knowing whether you’re a Motor Vehicle Trader or simply a private seller who only sells motor vehicles from time to time.

What you auto know

The motor vehicle industry in NZ is governed by the Motor Vehicle Sales Act 2003 (MVSA).

If you are deemed to be a Motor Vehicle Trader (MVT) under this Act, you will also have obligations under the Consumer Guarantees Act 1993 (CGA) and the Fair Trading Act 1986 (FTA).

Section 8 of the MVSA outlines how you could be considered a motor vehicle trader. The two most common ways are:

• if you sell more than six motor vehicles within a 12-month period and you do this for the primary purpose of gain
• if, when selling vehicles, you behave in a way that would lead a buyer to believe you are a motor vehicle trader.

It is pretty easy to work out whether you have sold more than six cars in a year, but it can be a little trickier to determine whether you are behaving in a way that would lead a buyer to believe you are a motor vehicle trader.

An example of behaving this way could be if you are a lover of cars and you only sell six cars a year, however you do this to make a bit of spare cash on the side.

You also know a reasonable bit about cars so you advertise them pretty well.

In this instance it could be argued that you are behaving in a way that is similar to a motor vehicle trader.

In this instance you might be deemed a MVT even if you have no intention of being a one.

Pump the brakes

If you are deemed to be a MVT then you cannot sell cars under a private Trade Me membership.

In order to comply with the FTA and CGA, if you are a MVT then you will need to make it clear on your Trade Me membership that you are “in trade”.

You will also need to become registered as an MVT with the Motor Vehicle Traders Register.

If you say you are a private seller when you’re actually a MVT, this could be considered misleading and deceptive conduct under the FTA.

All this may seem a bit heavy, but Trade Me really cares about making sure the site is a great place for members to trade together, and that our members are well-informed about their rights and obligations.

Plus, it’s always good to know where you stand so that you don’t get caught in an exhausting position.

So now you know if you are a MVT, here's your obligations when you sell on the Trade Me site.

Creative Commons image used courtesy Garry Knight on Flickr.