A Kiwi citizen has been left shocked after being called a terrorist by a West Auckland mechanic, who then refused to fix his car after a dispute over the cost of the repair.

Riverhead WOF & Service Centre owner Lee Wallace admitted calling the customer – who is a real estate agent - a terrorist last month because he was a "dark, swarthy guy" with a beard, but said it was meant to be a joke.

Wallace then said he wouldn't fix the man's car because he haggled over the $45 price and "wasted" his time during the busy Christmas period.

The man – a Coptic Christian, who moved to New Zealand from Egypt almost 25 years ago - said he had never experienced such treatment in his life.

He had gone to the Riverhead service centre on December 19 to get a bulb changed in his car's front headlight, but as soon as he pulled up, Wallace came over saying: "Why are you here, are you a terrorist?"

The man claimed Wallace then swore at him when given advice on how to fix the bulb.

"[He] said to me, 'F*** you, get the f*** out of my shop and don't come here anymore."

The incident left him shocked, the man said.

"I have been living in New Zealand for almost 25 years, my kids are born here, and I have loyalty to this country as much as anyone - but I never came across such a sad and horrible situation like this before," he said.

Wallace denied abusing the man, and said he simply told him to go to another mechanic, who was willing to do the job cheaper.

The man said he had only grown his beard for fun. But straight after the incident, he shaved it off.

"I started to get frightened about people thinking that way."

Wallace said he was having a laugh when he called the man a terrorist.

"I said, oh you look like a bit of a terrorist, just like that, joking around," he said.

"No harm meant in it at all. Maybe I shouldn't have said it. But it was just a bit of banter – he never seemed the least bit offended by it at the time."

Wallace said he only became annoyed when the man asked him to fix the headlight bulb for $20, saying another mechanic had done it for that price in the past, he said.

The man also brought in his own bulb, denying Wallace the chance to sell him the part.

Wallace told the man he charged $90 per hour plus GST and that the job would take a minimum half an hour because he had to put it up on the hoist and then pull off the wheel and inner guard before changing the bulb.

He eventually agreed to do the job for $20, but asked the man not to come into his workshop because it was dangerous, he said.

"So anyway, he wanders in, stands behind me and when I start taking the wheel off he tells me you don't have to do that," he said.

Wallace immediately pulled the car down from the hoist and gave it back to the man, telling him to go away.

"I thought for 20 bucks, I don't need it – it wasn't even worth my while putting it up on the hoist for $20."

Wallace said he had run a successful business for more than 16 years and was an immigrant from England himself – and so had nothing against other people.

"I don't just get customers come in and abuse them and tell them to go to hell – that is not how you run a business and that is not how I run my business," he said.

"He just got my weights up – trying to get a job done for free basically."

The man said he took his car to another garage who did the job for $10 in less than five minutes without removing the wheel.

He said he had initially tried to let the "terrorist" comment go and had only politely offered advice to Wallace about not removing the wheel.

"Then he blew up, and I thought this is not normal," the man said.