What you need to know about Australian write-offs

Should we be selling Australia’s written-off and flood-damaged cars in New Zealand?

MTA says no, and goes further to say the country needs a new, simple and transparent system that consumers and traders can use to check the damage history of a vehicle.

“Whether the car is an import or not, would-be buyers should be able to easily find out whether it has been repaired after a serious accident, storm or fire. We are lobbying the government and NZTA for a complete review of the process, and how this information is recorded,” says MTA Chief Executive Craig Pomare.

The lack of transparency in the New Zealand system has become obvious in recent years following the sudden rise in imports of statutorily written-off cars from Australia. In the past four years, just over 7,000 write-offs have been brought in, including 2,400 flood-damaged vehicles.

How can you tell if a car has been written off?

Only the most savvy consumers are aware they can check the NZTA website to see if a car they are interested in was once a statutory write-off in Australia.

Flood damage is particularly insidious as faults and rust may not emerge for many months, or even years after the flood.

MTA Repair Sector Specialist Graeme Swan says “Flood damage is difficult to repair and difficult to detect. To repair, the vehicle needs to be thoroughly cleaned out and the entire wiring loom and critical electronic components such as air bags and safety belt pre-tensioners replaced. Even then, there may be ongoing problems – it takes just one missed damp component to cause ongoing issues for owners.”

Recently the details of these written-off vehicles were added to the NZTA Landata system so their status as a ‘damaged import’ could be recorded as they crossed the border. However, damage flags can also be removed by entry certifiers if they consider the damage identified at the border is minor or insignificant. If the flag has been removed, the trader’s CIN (Consumer Information Notice) will not show the vehicle was a damaged import even if it was once a statutory write off.

The Tribunal has dealt with over a dozen cases relating to imported damaged cars in recent years, many of them soaked in Australian floods. In most cases, the consumer was not aware of the vehicle history.

Tribunal Adjudicator, barrister Christopher Cornwell is critical of the system that allows damaged flags to be removed after repair.

He said in one dispute hearing, “I consider that such a flagging should never be removed for vehicles like this one which have been previously written off, otherwise the New Zealand used vehicle-buying public will be perpetually ‘in the dark’ over the history of such vehicles and New Zealand will continue to be a dumping ground for Australian written off vehicles which are subsequently resold to unsuspecting buyers.”

What’s behind the rapid rise in write-offs?

Back in 2008 just 750 used vehicles were imported from Australia. This all changed in late January 2013 when huge swathes of Queensland were flooded. Tens of thousands of cars were submerged to varying depths and 1,763 of them were brought into New Zealand during the year after being written-off by insurance companies.

Figures from NZTA show since then almost 4,700 write offs have been imported from Australia – over 600 of them logged as water damaged. It can be hard for a buyer to uncover the history of these vehicles particularly once they enter private hands, because private sellers are not required to provide CIN cards. MTA advises buyers to purchase vehicle information reports through several independent suppliers, and check the NZTA list for statutory write-offs from Australia.

TradeMe is also concerned by the potential for buyers to be stung. It recently added a requirement for vehicle traders to disclose if a vehicle was an Australian statutory write-off. This followed increasing complaints from buyers who were misled by traders and private sellers. MTA supports TradeMe’s action and would like to see the Minister of Commerce Paul Goldsmith follow up on his recent suggestion there be a review of CIN card information.

“MTA first raised this issue with government in 2015 but we think the industry can go further and do better,” says MTA Chief Executive Craig Pomare.

There is a lack of data about damaged vehicles coming from countries other than Australia. MTA believes a review is needed of the system for tracking all damaged vehicles – not just recent Australian imports.

“We want to see a full review of the sale, repair, and re-registration of all damaged vehicles in New Zealand, regardless of origin. Ideally, there should be full disclosure about the history of all cars made freely available on one well publicised, easily accessible database so customers can quickly find out its damage history – whether or not it was an import or a statutory write-off.”

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