Motor Vehicle Sales Act 2003

Motor vehicle trading - Other requirements

19: Duty of motor vehicle trader with respect to money received from sales on consignment of used motor vehicles

You could also call this:

"Rules for car sellers when selling someone else's used car"

Illustration for Motor Vehicle Sales Act 2003

If you are a motor vehicle trader and you sell a used car on behalf of someone else, you have to follow some rules. You must pay the money you receive from the sale to the person who owns the car, minus any fee you are allowed to charge. You have to pay the money to the owner immediately if they ask for it, or within 5 working days if they do not ask. If you cannot find the owner, you must pay the money as soon as you find out where they are. The money you receive from the sale is not yours to use, and you cannot use it to pay your debts. It is also protected from being taken by your creditors or being included in your bankruptcy. When selling a car on behalf of someone else, you are acting as their agent, and you must follow the rules in section 20 as well. You should understand that a sale on consignment means someone gives you their used car to sell for them. But it does not include selling the car at an auction. As a motor vehicle trader, you have a duty to follow these rules when selling cars on behalf of others, and this duty is affected by any instructions the owner gives you.

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This page was last updated on 9 November 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM188561.

Topics:

Money and consumer rights > Consumer protectionBusiness > Industry rules

18: No contracting out of requirements of section 16, or

"You can't agree to ignore the rules in section 16."

20: Motor vehicle trader must provide account, or

"Traders must give you a written account of your car sale money"

Part 2Motor vehicle trading
Other requirements

19Duty of motor vehicle trader with respect to money received from sales on consignment of used motor vehicles

This section and section 20 apply if a motor vehicle trader acts as an agent for another person (the principal) in the sale on consignment of a used motor vehicle.
If this section applies, the motor vehicle trader must pay to the principal all money received by the motor vehicle trader for the sale on consignment of the motor vehicle (less any fee or commission that the motor vehicle trader may lawfully charge for the sale)—
immediately on demand by the principal; or
if no demand is made, within 5 working days after the receipt of the money.

If, after reasonable inquiry, the principal cannot be found, the motor vehicle trader must pay the money to the principal as soon as the motor vehicle trader becomes aware of the principal's whereabouts.
The duty of a motor vehicle trader under subsection (2) is subject to any written authority or instruction given to the motor vehicle trader by the principal.
The money referred to in this section—
is not available for payment of the debts of the motor vehicle trader; and
is not liable to be attached or taken in execution under the order or process of any court at the instance of any creditor; and
must not pass on the bankruptcy of the motor vehicle trader,—
1. in the case of a motor vehicle trader who is an individual, to the Official Assignee; or
2. in the case of a motor vehicle trader that is a company, to the liquidator of that company.

In this section and section 20, sale on consignment—
means the sale of a used motor vehicle that has been delivered into the custody of a motor vehicle trader for the purpose of sale; but
does not include a sale by auction of that motor vehicle.