The Consumer Guarantees Act 1993 (CGA) applies to every repair and service you perform for a private customer. This guide explains what it means for automotive workshops, what you owe a customer when a job goes wrong, and how to keep the paperwork that keeps you out of the Disputes Tribunal.
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
$60k
Disputes Tribunal (from 24 Jan 2026)
Key Guarantees
4
for services under CGA
Applies To
All
repair work for private customers
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 with consumers. 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. For business or fleet customers buying for business purposes, you can contract out of the CGA, but only if both parties agree to it in writing and it’s fair and reasonable to do so. Without a written contracting-out clause, the CGA still applies.
The Four Service Guarantees
Under the CGA, services must meet four guarantees. These come from Sections 28 to 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. an 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
Authorising extra work: the call and the record
Most workshop disputes start with extra work the customer says they never agreed to. The fix is a two-minute routine. When you find more work on the hoist, stop and ring the customer. Say what you found, what it costs to fix, what happens if they leave it, and ask a yes-or-no question: “Do you want us to go ahead with the rear pads at $X plus GST?” Then write the answer down while it’s fresh: the time of the call, who you spoke to, what was approved and the price. In Hoist that’s a job note on the card, or better, an updated estimate the customer approves from a link so the approval is time-stamped in their name. If you can’t reach them, don’t proceed; send a text and an email with the same yes-or-no question and wait for the answer.
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
Illustrative example: if putting right a failed repair would cost, say, $4,000 on 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
Disputes Tribunal
If you cannot resolve a dispute directly, customers can take a CGA claim about your repair or service work to the Disputes Tribunal, which from 24 January 2026 handles claims up to $60,000. The tribunal can order you to:
- Pay reasonable repair costs
- Pay damages for losses
- Refund the service cost
Best Practices for Compliance
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.
Keep the paper trail in one place
Workshop management software like Hoist keeps the documentation trail for CGA compliance together: quotes, link-based approvals, job notes, photos and the communication history all sit on the job card.
When Customers Are at Fault
You’re generally not liable under the CGA where:
- The problem was caused by the customer (e.g. they ignored your warnings)
- You warned them of potential issues and they insisted on proceeding
- The problem existed before you worked on the vehicle
- The complaint is normal wear and tear rather than a fault in your work
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 |
Official Resources
- Consumer Protection NZ: Consumer Guarantees Act
- Motor Vehicle Disputes Tribunal (for vehicle purchases from registered traders)
- Consumer Guarantees Act 1993 (Full Legislation)