The Transport Agency says up to 60 percent of used cars imported from Australia might not be allowed on New Zealand roads.
The agency (NZTA) said most of those cars had been declared statutory write-offs by Australian insurance companies. A statutory write-off could mean anything from hail damage to structural damage from a crash.
The agency's spokesperson, Leigh Mitchell, said about 250 imported Australian cars a month were being flagged as damaged.
However she said they could be repaired and as long as they subsequently passed an inspection by a specialist repair certifier, they could be registered here.
Ms Mitchell said Australia was currently the only country that had accessible information about a car's history.
The Transport Agency has tried to get information from Japan, where most of New Zealand's used car imports originate, but had been told that information was not available.
Any vehicle that is identified as damaged or written off in Australia is listed on the agency's website for buyers to check.
Australian rules tougher - IMVAI
But the Imported Motor Vehicle Association Incorporated chief executive David Vinsen said someone buying an imported vehicle had more security than if they bought a car from within New Zealand.
He said there was no requirement to have a New Zealand car certified after it had been repaired and before it was put back on the road.
Transport Minister Simon Bridges said New Zealand's systems worked well.
"I'm certainly satisfied that in New Zealand we have a regime through Warrant of Fitness, registration and a variety of other quality assurance systems that means that the cars on the road legally are safe and are fit for purpose."