Online car-buying hurdles

Europe's embryonic car e-selling industry faces ruin, while New Zealand's has barely got off the ground.

Europe’s embryonic car e-selling industry faces ruin, while New Zealand's has barely got off the ground.

Ford UK's chairman Ian McAllister says the threat comes from new European Union directives on Internet trade.

It contains a measure giving the buyers of cars and other goods the right to return them for a full refund within seven days.

However, new car-buying legislation being planned in New Zealand will not have a similar refunds policy.

McAllister says the EU directive will put a stop to Internet car sales because of the high costs of such a policy.

Ford UK had launched a "no quibble, bring your vehicle back" policy in the past, but he says it had to be abandoned due to high costs.

If someone bought a car, drove 2000kms, and returned it, they could claim their money back, despite the car's value dropping significantly.

Ford and other car manufacturers plan to lobby EU governments on the issue and a decision is not expected until the end of the year.

In New Zealand, the Ministry of Consumer Affairs reports most Web sites by car sellers are databases of cars for sale, rather than offering cars for sale over the Net.

The ministry knows of a licensed car dealer in Hamilton that arranges delivery of cars over the Net, but is unsure where the actual sales take place.

The Motor Vehicle Dealers Act says with the exception of private sales, second-hand cars can only be bought from licensed premises.

New cars were only recently exempt from this requirement to allow Korean car manufacturer Daewoo to sell its cars via an 0800 number.

The ministry spokesperson says car buyers receive statutory warranties under the Motor Vehicle Dealers Act and the Consumer Guarantees Act.

"It doesn't make a difference if the cars were sold online or not," she says.

The Motor Vehicle Dealers Bill is before the Commerce Select Committee, which is due to report on June 30.

Nothing specific is said about online car sales, but the spokesperson says any reform of the MVDA should help online car sales, without specifying how.

"Consumers will be given the same rights they have now. No right of cancellation is proposed, nor is it likely," she says.

A spokesperson for Ford New Zealand confirmed their Web site is simply a virtual showroom that puts potential buyers in touch with Ford dealers. They are also unaware of any other manufacturers selling cars online in New Zealand.

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Tags e-commerceMotor Vehicle Dealers Billcarse-business

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