News and views from the automotive industry.
How the new Consumer Rights Act affects motor dealers
In our last blog we introduced the new Consumer Rights Act 2015, detailing some of the key changes introduced to protect consumers and simplify previous legislation. In this blog we take a closer look at how the changes will affect motor dealers and what you should be doing to ensure your business is protected.
The Act affects any trader supplying goods or services to consumers, which of course includes the retail motor industry. Sales of vehicles by dealers, along with servicing, repairs and maintenance come under the Act’s remit.
It is also worth remembering – the rights given to consumers under the Act are largely separate to any manufacturer warranty. Any claims under a third party warranty / guarantee do not count under this legislation as they cannot take away the rights the consumer now has.
Vehicle returns for a full refund
One particular clause that has the motor industry talking is the right to reject or return a faulty car for a full refund within 30 days of purchase as well as the entitlement to one repair or a replacement should a fault be found within the first six months. This replaces previous legislation, which stated, rather vaguely, that such a right lasted “a reasonable time”.
One benefit of the change for dealers is that the new law could prevent customers involving Trading Standards, therefore reducing the opportunity for customer/dealer disputes. This is dependent on both sides understanding their rights, however, so that means educating your staff and ensuring they are fully versed with the new Act.
Protection for motor dealers
The “reversal of the burden of proof” still remains with the dealer; should a customer return a vehicle for a refund, the dealer must show any fault was not there at the time of purchase. It is essential to take preventative measures to protect yourself from repaying the full purchase price of a vehicle and have it returned with significant faults if they didn’t exist when the car was sold.
If dealers can prove the vehicle did not have the fault at purchase, they will not be liable under the Act. It’s important, therefore, that motor dealers:
- have a robust pre-sales check sheet in place, verified by an auditable PDI check and confirmed with the customer at vehicle handover .
- sell vehicles with a brand new MOT.
- review their pre-delivery processes to ensure they have evidence that the vehicle they are selling is not faulty at the point-of-sale.
- Ensure that sales team fully understands the rights of both parties under the new Act.
Knowing your rights
One clause of the Act that affords traders some protection is in preventing a customer from requesting a full replacement or repair where it would be a “disproportionate” burden on the dealer. For example, requesting a new car because of a faulty door when the door alone could be replaced or repaired.
In addition, should the customer choose to reject the car and return it within the first six months, the dealer can take into account the consumer’s use of the vehicle when giving them a refund. The Department for Business, Innovation and Skills (BIS) will clarify further guidance on this deduction, which only applies to the sale of motor vehicles.
Additionally, customers cannot claim under the Act for:
- defects they are made aware of before the sale or if they examine the goods before purchase and any defects should have been obvious
- damage they cause or if they simply change their mind about wanting the goods
- damage obviously caused by misuse of the product
- faults that appear as a result of fair wear and tear.
Look out for our next blog in this series, or sign up to our newsletter at the bottom of this page, for more information, advice and guidance on how the new Consumer Rights Act affects provision of services.