As complex as the modern legal system may seem as first glance, the The Consumer Rights Act of 2015 has actually made it an easier place for car dealers to do business, whilst also protecting the interests of a consumer.
Not only does this make the marketplace a fairer environment for all parties, but it also benefits motor traders that are transparent and honest in their sales process.
For example, the Consumer Rights Act only applies to contracts between a consumer – defined as someone acting outside their business interests – and a trader.
This means that if a vehicle is sold to another trader, then this legislation would not apply. However, the Sale of Goods Act will still be applicable to business-to-business transactions providing protection to any purchaser.
If selling to a consumer, then the Consumer Rights Act would come into play. When purchasing a product, a consumer has several rights that protect them in the eyes of the law. These are statutory and can therefore not be avoided or contracted out of, in any instance.
So, what are a consumer’s rights?
A consumer can expect to receive goods that are of satisfactory quality, fit for purpose and as described. On the face of it, this might seem simple, but there can sometimes be disputes over what constitutes this potentially subjective definition.
In terms of satisfactory quality, for example, the vehicle must be safe, durable and free from minor defects at the point of sale.
If a customer bought a brand new, premium vehicle, they would be right to assume everything should be in perfect working order — from the wiper blades through to the Bluetooth technology.
However, if they bought a 10-year old vehicle, with 150,000 miles on the clock, it would be fair to expect the vehicle to require more maintenance.
Whether a vehicle is of satisfactory quality is a difficult test, and if in doubt, it is advisable to obtain an independent report. This will confirm if the faults with the vehicle were present at the point of sale and if (bearing in mind age and condition of vehicle) to render it of unsatisfactory quality.
When judging if something is fit for purpose, a dealer must take a common-sense approach. If the consumer made clear when purchasing the vehicle that they had a specific need, then that should be fulfilled. For example, if they stated that they needed hands-free to make calls when on the road, and the dealer guaranteed that the buyer’s mobile phone was compatible with the technology, then that purpose should also be satisfied.
Of course, the vehicle supplied must also match the description given to the customer, or any models or samples that were shown to them at the time of purchase.
Digital content is also now covered under the act, meaning that any digital apps or add-ons, such as satnav must be of satisfactory quality and fit for purpose.
Short-term right to reject
As with any product, things can sometimes go wrong. But, if a fault occurs with a vehicle within 30 days of purchase, rendering the vehicle not of satisfactory quality, then the consumer has a new short-term right to reject it. They must receive a full refund, within 14 days and in the same method that they paid for it.
This can become complicated when a car was bought as a part-exchange.
The Act confirms the customer would be entitled to the return of their original vehicle. However, in practice this is often not possible, as the vehicle may have been sold at auction.
In this situation, the customer will be entitled to reclaim the value of the car.
In some circumstances, money may have been spent on preparing the part-exchange for sale, in which case the dealer can try to come to an agreement with the customer to recover any investment.
Finally, the customer has a duty to make the vehicle available for collection, without delay.
And after 30 days...
If the fault occurs after the 30-day period, but within six months, then the customer must give the retailer one opportunity to replace or repair the vehicle. This should be at no cost to the consumer, within a reasonable timeframe and without causing significant inconvenience.
In this scenario, the fault must be fixed the first time around, so it is important that the problem is diagnosed and repaired properly. If the issue isn’t rectified, or a new issue occurs the customer can reject the vehicle or be entitled to an appropriate price reduction.
If the problem arises after six months, then the burden is put on the customer to prove that the product was faulty at the time of delivery.
So, where does this leave dealers that work hard to create and retain a great reputation in the market?
We suggest that a dealer undertakes a thorough pre-delivery inspection and to ensure any faults are fixed before delivery.
Consider asking the customer to sign a detailed damage report when purchasing the vehicle, to acknowledge any current wear and tear issues. This is something that a remarketer such as G3 Remarketing will be able to provide if a vehicle is purchased at auction.
Staff training is crucial, to ensure that the sales and customer service employees are always honest about what the customer can expect from a vehicle
Dealers should also consider placing a six-month warranty on all cars, to cover the period where the burden of proof is placed on them.
But more importantly, it’s essential that when selling a vehicle or rectifying problems, a dealer is fair and takes a ‘common-sense’ approach. This will not only help to avoid legal disputes, but also to keep the customer happy and promote word-of-mouth recommendations. After all, a retailer’s best sales person is often a happy customer.
Author: Scott Cooper, sales director of G3 Remarketing, and Melanie Chell, partner at Shoosmiths