The Advertising Standards Authority (ASA) has rejected a complaint from the Scottish Motor Trade Association (SMTA) which contested Cazoo’s claims that the vehicles it offers for subscription were “new cars”.
Online car retailer Cazoo started offering vehicle subscription – including insurance, maintenance, servicing and tax – following its acquisition of Drover and Cluno ahead of its planned expansion into Europe.
But the SMTA claimed that the offer of “new cars for subscription” offered on its website represented misleading advertising as the vehicles delivered to customer were actually subject to pre-registration.
The ASA rejected the complaint and decided to take no action, however, after Cazoo argued that pre-registration had no detrimental effect on its customers under the scope of the vehicle subscription offering.
Reporting on Cazoo’s response to the complaint, the ASA said: “Cazoo said that if consumers purchased a pre-registered car, the consumer’s name would be second on the registration document (which would have a detrimental effect on the car’s asset value) and there were circumstances in which additional products like warranty, insurance and breakdown cover would be affected.
“Cazoo believed none of that detriment existed for their subscription service. The consumer never owned the subscription car so the impact of pre-registration on the asset value of the car was irrelevant to them.
“Similarly, the subscription service included additional services such as insurance and breakdown recovery so the pre-registered status of Cazoo’s subscription cars was immaterial to the consumer.”
Cazoo told the ASA that pre-registration was also a legal necessity for its subscription service.
It said that it remained the owner of each car made available for subscription on its website throughout the term of the customer agreement.
Detailing more of Cazoo’s response, the ASA said: “Cazoo believed subscription consumers understood the label ‘new’ to correspond to the car being high quality and having very low usage before they got it.
“The new cars offered as part of the Cazoo subscription service all had fewer than 500 miles on their odometers.
“Cazoo said that they offered a guarantee which allowed their customers to return a car within seven days from the start of their subscription and to drive 250 miles during that time.
“They said if a subscription car was returned in that way, then they would re-list the car as “new” after inspection and valeting, but only if the car’s condition remained very high and the car’s mileage remained below 500 miles.”
Stating the reasons for not upholding the SMTA’s complaint, or taking action against Cazoo, the ASA stated: “Although we understood new subscription cars were pre-registered, because ownership was not transferred to the consumer, and consumers would not expect it to be, we considered that information would not be material in those circumstances. We concluded that the ad’s description of pre-registered cars as “new” was not misleading.”