The Office of Fair Trading is aiming to offer guidance to used car dealers following its market study into the sale of second-hand cars.
It is consulting on draft guidance that sets out the legal obligations of second-hand car dealers under two key pieces of consumer law: the Consumer Protection from Unfair Trading Regulations 2008 and the Sale of Goods Act 1979.
As part of its market study, the OFT surveyed buyers, dealers, local Trading Standards services and commissioned a mystery shopping exercise.
Among buyers purchasing from dealers and auctions, almost a fifth (19%) had experienced problems with their used car after the sale.
Almost half half of those who made contact with the dealer about the problem said it was completely rectified (47%), while nearly 30% said the problem had not been rectified at all by the dealer.
Consumers buying from independent dealers were more likely to believe that the problem had not been rectified at all compared to consumers buying from franchised dealers.
The mystery shop research found that one quarter of shoppers felt the information they received about the target vehicle and services available at the dealership was insufficient.
The OFT launched its market study in May 2009 following concerns about the large number of consumer complaints relating to second hand car sales.
Last year, the OFT-managed advice service Consumer Direct received 68,000 complaints about issues with second hand car sales.
The purpose of the market study is to understand the causes of such a high level of consumer complaints and to consider whether existing consumer protection legislation is sufficient and effective.
Heather Clayton, OFT senior director of infrastructure, said: "The second hand car market has consistently attracted a high number of consumer complaints. Our research throws light on the specific problems that consumers experience so remedies and, where appropriate, consumer enforcement, can be targeted.
"Our guidance on relevant legal obligations, out for consultation today, will assist both the industry and our Trading Standards enforcement partners."