INDEPENDENT NEWS

Car Dealers Increase Prices For "Sales"

Published: Thu 3 Feb 2000 09:51 AM
Media Release 2000/7
Commission believes many car dealers increase prices for "sales" and trade-in promotions
As part of the Commerce Commission’s action against false or misleading claims about cars, the Commission is highlighting what it believes is a common practice among car dealers—increasing prices for "sale" and trade-in promotions, and making false or misleading claims about reductions.
The Fair Trading Act prohibits false or misleading claims about prices. Commission Chair John Belgrave said that information from car dealers about each other and from consumers suggests that prices are frequently inflated for such promotions.
"Inflating prices for a promotion is an unacceptable practice," Mr Belgrave said. "If we find it in our surveillance of car dealers, then prosecutions are likely."
In a precedent case, the Christchurch District Court fined an appliance retailer $63,000 for several breaches of the Act, including making misleading claims about savings on sale goods.
As an example involving vehicles, a car might be offered for sale at $15,000, reduced by $3,000 with a trade-in. If, however, the car was available for $12,000 before the promotion, the claim that the car is reduced by $3,000 with a trade-in would be false or misleading.
A settlement concluded with Wellington car dealer Avery Motors a few days ago is illustrative of claims about sale prices.
Avery Motors advertised a Suzuki Vitara as "was $19,990, reduced to $16,930", but the car had been available from the same company for $14,990. The claimed "reduced" price was $1,940 more than the price at which the car had previously been offered for sale.
Avery Motors had the car available in its Johnsonville yard at "was $16,990 reduced to $14,990". It transferred the car to its Wellington city yard for what it called a clearance sale and increased the car’s price.
Mr Belgrave said that Avery Motors responded immediately to the Commission’s concerns and co-operated with the investigation.
In the settlement, Avery Motors has given signed undertakings: acknowledging that the claimed reduction was incorrect and misleading that it will ensure all its future advertising and other representations will be accurate to review its compliance and training programmes and to report back to the Commission on the review.
The Commission follows up all settlements and may take court action if a settlement is not honoured.

Next in Business, Science, and Tech

Government accounts show strong economy
By: New Zealand Government
OceanaGold cleared to buy land for Waihi tailings expansion
By: BusinessDesk
Fletcher sued for $7.5m over Christchurch justice precinct
By: BusinessDesk
PHARMAC signs bundle deal for more cancer medicines
By: PHARMAC
Government levels electricity playing field for consumers
By: New Zealand Government
NZ dollar rises on better-than-expected govt surplus
By: BusinessDesk
Rail revaluation bolsters Crown 2019 accounts
By: BusinessDesk
Shane Jones' PGF quietly made tax-exempt
By: BusinessDesk
Robertson’s pockets bulge as everyday Kiwis struggle
By: New Zealand National Party
DHB deficits out of control, health services at risk
By: New Zealand National Party
Green Party responds to Government surplus announcement
By: Green Party
Nearly $2 of every $5 swallowed by the Government
By: ACT New Zealand
NZEI Te Riu Roa welcomes Government's education spending sig
By: NZEI
Give the money back, Grant
By: New Zealand Taxpayers' Union
Surplus should be spent on housing, health and services
By: Public Service Association
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media