Dealers say they will no longer be able to sell cheap cars through online auctions because of changes to consumer laws.
Currently any car that is purchased through a genuine competitive online auction has no protection under the Consumer Guarantees Act.
But under the new proposal, a vehicle purchased from a registered trader will have have full protection.
The body representing traders says the proposals are not affordable when selling cheaper cars.
"There won't be enough margin in a $2000-$3000 car anymore to provide that sort of back up," said Ian Stronach from the Motor Trade Association.
"Repairs are very expensive, they can sometimes cost thousands of dollars. On a low price vehicle they will just have to say to the customer 'I'm sorry I can't offer you a reasonable trade'."
Stronach says as a result, buyers will miss out on cheaper options.
But Consumer NZ chief executive Sue Chetwin disagrees, saying greater protection is necessary.
"It means when people buy online from traders they can do it safely," she said.
"The Motor Trade Association are really trying to protect something that's gone on for many years where they can sell vehicles without having to give the guarantees that consumers should have."
Submissions on the consumer law reform bill are set to be heard by a select committee next month.
It reports back to the Government in August.