Buying second-hand
Debtfix loves second-hand shopping to help keep finances in check, but how can you protect yourself when buying higher value second-hand goods?
Your rights depend on who is selling the item. If you buy from a private seller your rights are different compared to buying from a dealer, trader or business.
Buying from a private seller
Everyone loves the idea of getting a bargain, but when you buy from someone privately, you don’t have much protection if something goes wrong.
Generally, private sales aren’t covered by the Fair-Trading Act (FTA) and the Consumer Guarantees Act (CGA), but you may have some cover if the item you’re buying has a current manufacturer’s warranty you can take over.
There are a few instances where there may be an option to claim damages under the Contract and Commercial Law Act. These include if:
• the seller misled you
• the seller didn’t own the goods
• there was money owing on them.
Be aware that sellers can ‘opt out’ of these provisions, but if they do this they’re supposed to tell you first.
If something goes wrong when you buy privately, try and resolve it with the seller first, but if this doesn’t work, you can go to the Disputes Tribunal. Take the seller's name, phone number and address at the time of purchase, so you can make a claim against them if this happens.
Before you buy an item:
• check if there’s a current manufacturer’s warranty you can take over
• ask for information about the item’s age, any wear and tear or faults — keep a copy of the seller's answers
• ask for a copy of the original receipt
• get an independent expert to check any big-ticket items like a vehicle
Buying from a dealer
You’ve got stronger protection when you buy goods from second-hand dealers and traders.
If you discover what you’ve bought from a trader or dealer is faulty, you have rights under the CGA, which says goods must be of acceptable quality. If they’re not, you can take them back.
Acceptable quality is what you’d reasonably expect depending on an item’s price, age, condition and what you were told about it at the time of purchase.
For example, it would be reasonable to expect that a $50 washing machine would be older or in worse condition than a $500 washing machine that has been overhauled.
Second-hand products should be fit for purpose, safe, free from defects, look acceptable and last a reasonable amount of time, but you can’t expect them to be the same as new products.
Always take time to check second-hand items for hidden defects before you buy, and make sure you get a receipt from the dealer.
If a preloved item has minor defects, the second-hand dealer you bought it from should repair or replace the item or refund your money. For major defects, you can choose to accept a refund or ask for a replacement.
Things to know about buying from second hand dealers:
• Second-hand dealers who sell on behalf of private sellers must meet their CGA obligations. If they sell faulty goods, the dealer is responsible.
• Under the Second-hand Dealers and Pawnbrokers Act, dealers (including scrap-metal merchants) must be licensed.
• Charity shops selling donated goods don’t need a licence.
• Licensed second-hand dealers and pawnbrokers must keep a register of goods and the person who sold or pawned them as protection against buying stolen items.
• When buying online, check the seller’s trading history and pay by credit card if you can then you can reverse the transaction if the goods don't turn up. Never pay in cash and don’t deposit money into overseas bank accounts if you are at all uncertain.
Buying online
Buyer beware! If you’re buying from a business or dealer on a website like Facebook Marketplace or TradeMe, you’ll be covered by the CGA and FTA, but if you’re buying from a private seller, you’ll have limited protection. If you run into a problem after you make a purchase, try using the site's disputes process and leave feedback on the seller.
When buying second-hand goes bad
So you know what to look out for, here are some examples of how things can go wrong when buying second-hand:
You buy a used car for $5,000 from a second-hand dealer who is selling it on behalf of the private owner. The Consumer Information Notice shows no money is owing on the car, but a month later it’s repossessed. It turns out a finance company has a registered interest over the car – in other words someone owes them money for a loan that was used to buy the car previously. The Consumer Information Notice was incorrect. In this case, you can get your money back as it’s the the second-hand car dealer’s legal responsibility to check the Consumer Information Notice is correct.
You buy a smartphone on social media that was described as a popular and expensive brand. You pay $300 for the phone, but find out later that it’s a fake. You have been misled, so you can cancel the sale and ask for a refund from the seller. If you have no success and you have the sellers contact details, you can make a claim to the Disputes Tribunal.
A final word
There are plenty of benefits when it comes to buying second-hand especially when money is tight, but like any purchase it pays to do your homework first so you don’t run into problems later. If you get into trouble with a dud second-hand purchase, check out your local citizens advice or community law centre for help.
And remember: ‘buyer beware’ - if the deal sounds too good to be true, it probably is!