The New Zealand Transport Agency (NZTA) will investigate after Sheree MacGillivray (29) and partner Tony Burns (28), of Mosgiel, laid a complaint about the car being issued a warrant just before they bought it.
Ms MacGillivray said they discovered the damage only when the 1983 Hondamatic they bought in a roadside sale last September failed a warrant inspection this month.
They knew at $450 the car was cheap, but it had been given a warrant a month before they bought it so were confident it was safe, Ms MacGillivray said.
The car failed a warrant inspection this month when the inspector noticed a patch of welding on the outside of one of the rear seat pillars.
Looking under the panel, he discovered almost the entire structure, from the roof to the area around the top seatbelt anchor, had rusted away.
"When he showed me it I was like `Oh my God, I've been driving my kids around in that'. If there was an accident, the seatbelt would just ripped out.
''I expected some rust - it's a pretty old car - but not something that put my kids' lives at risk," Ms MacGillivray said.
After the inspector failed the car and advised them not to drive home with 9-month-old Lexia or 3-year-old Nixon in the back seat, the Burns family questioned how the car could have been issued a warrant six months earlier.
The family approached the company that issued that warrant, but were not satisfied with the response and lodged a complaint with the NZTA.
The NZTA this week indicated its vehicle inspection unit would investigate the couple's complaint.
When contacted, the manager of the company that issued the warrant said the inspector saw the welding on the pillar, but maintained, as he had to the family, that rust damage was not noticeable during a visual inspection of the car.
The inspector who this month failed the car said he investigated further because welding usually indicated bigger problems underneath, but agreed he had not been lawfully required to look further.
NZTA requires vehicle inspectors to check a car's seatbelt anchorage is "structurally sound and free of corrosion" and "not damaged or distorted", and tick a box to that effect on the warrant check sheet.
They are not required to lift carpets or remove panels to inspect seatbelt anchors, which are often concealed, as a matter of course.
They are required to investigate any outward signs of damage or rust.
Spokesman Andy Knackstedt said the NZTA did not require vehicle inspectors to dismantle components to inspect seatbelt anchors more closely, because that would require more time and therefore more cost to the motorist.
Warrant of fitness inspections were, by definition, subjective, given few things had a specified measurement, he said.
