A garage boss has admitted breaking the rules of the Supply of New Cars Order 2000 to claim bonuses from manufacturers for new vehicle registrations without complying with the legislation.
He claimed it was “common practice” across the industry and in court named two other main dealers he said were involved.
Michael Beavis, managing director of Northern Motors, a main Vauxhall dealer with sites in Watford, Harrow and Ruislip also said its “paymasters” GMUK (General Motors UK) were aware of the activity.
Beavis, who has been at the helm of Northern Motors for 18 years made the startling admissions while successfully defending a case for unfair dismissal being brought by sacked sales director Darren Barratt.
At the three-day Watford County Court employment tribunal Beavis explained how cars were ‘bought and sold’ with the use of the company’s handyman to get around the law.
Despite Judge Richard Baty saying before the hearing the case “isn’t about whether the company broke the rules in the motor trade, it is about whether [Barratt] was unfairly dismissed” Beavis was content to explain what had been going on.
Under the Order a newly registered car must not be sold within three months if the garage has received a bonus from the manufacturer for taking it.
Barratt, who was representing himself, put it to Beavis that handyman Geoffrey Payne agreed to ‘buy’ the cars and register them in his name before ‘selling’ them back to the garage.
Northern Motors could then receive a bonus from the manufacturer on the new registration and still sell the car from day one without having to comply with the three-month rule.
“Did he ever put his hands in his pockets and pay you for the stock?” Barratt asked.
No money changed hands, instead one purchase invoice and a sales invoice were produced simultaneously for each car, said Beavis.
A bemused member of the tribunal panel asked: “Why would you do that?”
Beavis said: “If I registered them in my own name it’s wrong to do that. I cannot claim a bonus on that from Vauxhall.”
“Did they [Vauxhall] know what was going on?” asked Barratt.
“Yes, because they audited the files,” said Beavis.
Beavis said it was a common practice in the industry with regional dealers involved.
Asked to explain the purpose of the Order, Beavis said: “At the time in 2000 it was an important thing. The government was fed up with manufacturers having cars in fields to fit targets.”
He added: “But I never read or saw it.”
Barratt was sacked from his job in October last year.
The judge rejected Barratt’s claim on Wednesday, September 14 and ordered he pay £6,000 of Beavis’ costs.
AM has asked Vauxhall for comment on the case and allegations made but it has declined.