Enterprise cars fined $33,000: warning to all consumers, dealers not disclosing key information and trade-in claims
Published29 Sep 2000
The Auckland High Court today fined Enterprise Motor Group Limited and one of its subsidiaries, Enterprise Motor Group (Panmure) Limited trading as Enterprise Nissan, a total of $33,000 highlighting two nation-wide problems: car dealers not disclosing key information and making misleading claims about the availability of trade-ins.
Commission Chair John Belgrave said that Enterprise Nissan's "guaranteed minimum buy back" on new Nissan's was not an offer to buy back cars, but was a final payment that consumers would have to make to the company. Rather than getting money back, customers had to pay Enterprise Nissan an additional $7,500 to $12,000 depending on the model.
In addition, the advertising did not disclose that customers did not sign a purchase agreement, but instead signed a lease agreement. Enterprise Nissan's Chief Executive was interviewed in the presence of his solicitor by Commission staff. The solicitor stated that the lease agreement signed by customers did not include an option for customers to buy their vehicle. However, he also stated that it was the company's practice to transfer ownership of cars to customers after they made the additional final payment.
Meanwhile, many consumers responding to Enterprise Motor Group's "$4,000 minimum trade-in, regardless of condition" offer were offered less than $4,000 for trade-ins. The offer applied to only a selection of cars in the yard.
The misleading claims about trade-ins were made in television advertising between November 1998 and February 1999 and again between November 1999 and March this year. They were also made in the company's Lower Hutt yard on flags, on cars and by salesmen.
Mr Belgrave said that the charges against the two Enterprise companies were representative of those companies' extensive promotions in Auckland and Wellington, and, unfortunately, were common examples of misleading tactics used by many new and used car dealers throughout the country.
The prosecutions were part of the Commission's crack down on car dealers following hundreds of complaints from consumers.
Mr Belgrave warned consumers to check all offers thoroughly before committing themselves to buying a new or used car.
