Angry car owner gets key justice

Toyota New Zealand has been found to have broken consumer rights laws when it charged an Auckland man $525 to replace a lost vehicle remote.

Damian Funnell, who owns Choice Technology, decided to take action after dealership Armstrongs Auckland charged him $475 plus a $50 programming fee to replace the lost Estima remote.

Funnell said the components that made up the key could be bought and assembled for about $33. By comparison, keys for American-brand vehicles are available from third-party suppliers for between $30 and $100.

He said the fact Toyota’s charge was so high proved it was taking advantage of its customers.

It was a claim Toyota strongly denied. It said it reviewed its pricing of parts regularly and set prices with reference to cost, competitive pressure and other factors. The cost of the remote was determined as a result of the price from Toyota Japan.

At the hearing, Funnell offered to drop his claim if Toyota would reveal the cost of the remote to its business. The carmaker chose to reveal, in private, the margin made by the dealership and Toyota New Zealand.

Tribunal referee Clayton Luke said Toyota’s claim was misleading. ‘‘It did not disclose that a significant portion of the price charged is a healthy margin added by Armstrongs.

‘‘Any statement of how the price is comprised needs to at least reference the fact that Toyota New Zealand and Armstrongs are adding significant margins to the price charged by Toyota Japan.’’

Luke said that under the Consumer Guarantees Act, a manufacturer must guarantee reasonable availability of spare parts. Toyota had breached that.

‘‘I am satisfied that the price charged by Armstrongs was not a price whereby Toyota New Zealand could say the keys as spare parts are reasonably available.

‘‘The part is simply not reasonably available when what is being charged is more than 10 times its manufacturing cost and that cost is likely to grow to some 10 per cent to 20 per cent of the value of the vehicle within the reasonable lifetime of the vehicle.’’

Luke said it was ‘‘reasonably obvious’’ the cost was largely governed by the fact Toyota was a monopoly supplier of the part.

He said the upper price the key might be reasonably expected to be supplied for was $200. Toyota was to pay the difference of $325.62.

Funnell said he had not yet received that money.

‘‘I don’t think it’s unreasonable to expect Toyota and its dealers to display a bit of integrity when dealing with customers like me.’’

He said he hoped his case would mean other car owners would not be charged such large amounts.

The Commerce Commission said the decision raised some interesting issues that it would consider.