The Consumer Guarantees Act 1993 (CGA) applies to every repair and service you perform. Understanding your obligations isn't optional — it's the law. This guide explains what the CGA means for automotive workshops, how to stay compliant, and how to handle disputes professionally.
Important: This guide provides general information about the CGA. For specific legal advice about your situation, consult a lawyer or contact Consumer Protection NZ.
Tribunal Limit
$100k
Motor Vehicle Disputes
Key Guarantees
4
for services under CGA
Applies To
All
trade repair work
↓ In this guide
📜 What is the Consumer Guarantees Act?
The Consumer Guarantees Act 1993 is New Zealand legislation that protects consumers when they buy goods or services. It sets minimum standards that businesses must meet, regardless of any warranties or terms you might have in your own policies.
⚠️ Key Point
You cannot contract out of the CGA. Any terms in your invoices or agreements that try to limit CGA rights are unenforceable. Phrases like "no warranty on used parts" or "no refunds" don't override consumer rights under the Act.
Who Does the CGA Apply To?
The CGA applies when:
- You are "in trade" (running a business, not a private sale)
- The customer is a "consumer" (acquiring goods/services for personal use, not business)
For workshops: The CGA applies to almost all your retail customers. It does NOT apply when you're servicing commercial fleet vehicles or trade customers buying for business purposes.
✓ The Four Service Guarantees
Under the CGA, services must meet four guarantees. These come from Sections 28-31 of the Act:
Reasonable Care and Skill (Section 28)
Services must be carried out with reasonable care and skill. This means working to the standard a competent mechanic would achieve.
What this means in practice:
- Diagnosing problems correctly
- Using appropriate tools and techniques
- Not causing additional damage
- Following manufacturer procedures where applicable
Fit for Purpose (Section 29)
If a customer tells you what result they need, and you accept the job, the service must achieve that result.
Example scenarios:
- Customer says "fix the noise when braking" — the noise must be gone
- Customer says "make the car pass WoF" — it must pass (for items you addressed)
- Customer wants "the air conditioning working" — it must work properly
Important: If you cannot guarantee the outcome (e.g., old vehicle where repair success is uncertain), you must tell the customer before starting work. Document this clearly.
Completed Within Reasonable Time (Section 30)
If no timeframe is agreed, work must be completed within a "reasonable time" — what a competent professional in the field would take.
Best practice:
- Always give an estimated completion time
- Communicate proactively if delays occur
- Document any agreed timeframes
- Parts delays should be communicated immediately
Reasonable Price (Section 31)
If no price is agreed beforehand, the customer only needs to pay a "reasonable price" — comparable to what other local providers charge for similar work.
Protect yourself:
- Always provide a written quote before starting work
- Get customer approval for the quoted amount
- If additional work is needed, get approval before proceeding
- Keep quotes on file with customer signature or email approval
⚠️ When Services Don't Meet Guarantees
If your work doesn't meet the CGA guarantees, you must provide a remedy. The type of remedy depends on whether the failure is "minor" or "substantial".
Minor Failures
For minor failures, you choose the remedy. Options include:
- Fixing the problem at no charge
- Refunding the customer for the cost of getting it fixed elsewhere
The remedy must be provided within a reasonable time.
Substantial Failures
For substantial failures, the customer can choose to:
- Have you remedy the problem
- Cancel the contract and receive a refund
- Claim damages for any loss suffered
🚨 What Makes a Failure "Substantial"?
A failure is substantial if:
- The problem cannot be remedied (or can't be remedied within reasonable time)
- The cost to remedy is disproportionate to the service cost
- The service is substantially unfit for its normal purpose and cannot easily be made fit
Example: If repair costs $4,000 to fix a $5,000 vehicle — that's likely substantial.
Consequential Losses
You may also be liable for "consequential losses" — reasonably foreseeable losses caused by the failure. Examples include:
- Towing costs if the vehicle breaks down due to faulty repair
- Rental car costs while the vehicle is being re-repaired
- Cost of independent inspection reports
Motor Vehicle Disputes Tribunal
If you cannot resolve a dispute directly, customers can take claims to the Motor Vehicle Disputes Tribunal (for disputes up to $100,000). The tribunal can order you to:
- Pay reasonable repair costs
- Pay damages for losses
- Refund the service cost
💡 Best Practices for Compliance
Following these practices will help you stay compliant and minimise disputes:
Documentation
- ✓ Get written approval for all quotes
- ✓ Document customer requests clearly
- ✓ Keep detailed job notes
- ✓ Take before/after photos for major work
- ✓ Record any warnings given to customer
- ✓ Keep all invoices and quotes on file
Communication
- ✓ Explain what work involves before starting
- ✓ Advise of any risks or limitations
- ✓ Call before doing extra work
- ✓ Provide clear completion timeframes
- ✓ Follow up after complex repairs
- ✓ Respond promptly to complaints
Warranty vs CGA Rights
You can offer your own warranty (e.g., "12 month warranty on parts and labour"), but this is in addition to CGA rights, not instead of them. A warranty can provide better coverage but cannot limit CGA rights.
💡 Pro Tip
Using workshop management software like Hoist helps you maintain the documentation trail needed for CGA compliance — quotes, approvals, job notes, and communication history are all in one place.
When Customers Are at Fault
The CGA does not apply when:
- The problem was caused by the customer (e.g., ignored your warnings)
- You warned them of potential issues and they insisted on proceeding
- The problem existed before you worked on the vehicle
- Normal wear and tear
Critical: If a customer insists on a repair despite your warning that it may not work, document this clearly. Get their acknowledgment in writing.
📋 Quick Reference: Your CGA Obligations
| Situation | Your Obligation |
|---|---|
| Repair doesn't fix the problem | Re-do the work at no charge or refund |
| Work takes longer than reasonable | Customer may be entitled to compensation |
| Work causes additional damage | Repair the damage at no charge + compensation |
| No price agreed beforehand | Customer only pays "reasonable" price |
| Customer gave specific requirements | Work must achieve those requirements |