Buying a second hand car

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OFT warns people to know their rights before buying a used car, as complaints rise

15 September 2010

The OFT launched a campaign to help people know their rights when they buy a used car from a dealer, as new figures released today reveal a rise in complaints.

In the first six months of 2010, the OFT-managed advice service Consumer Direct received just over 38,000 complaints about second hand cars bought from dealers, an increase of about 18 per cent compared to the same period last year. Complaints about second-hand cars continue to top the list of calls to Consumer Direct, above mobile phones and TVs.

Around 3.6 million second hand cars are bought each year, with consumer spending totalling £24 billion. But an OFT study found that many car-owners end up fixing unresolved faults that are the dealer’s obligation to correct, costing each of them an estimated average of £425.

Michele Shambrook, Operations Manager for the OFT-managed advice service Consumer Direct, said: ‘Cars are an expensive purchase, so before parting with any money people need to know exactly what they are getting and what they can do if things go wrong.

‘Dealers have a responsibility to sell cars that are of ‘satisfactory quality’. This will vary depending on issues including the vehicle’s age and mileage, but as the vast majority of all second hand car faults come to light in the first three months, they will often be the dealer’s responsibility to fix.’

Although most car dealers are reputable it is important that people buying a used car take the following precautions to steer clear of trouble:

  • Ask the dealer the right questions such as 

    – What mechanical history and mileage checks have they done on the car you want to buy?
    – How many former owners has the car had and is the full service history available?
    – Has the car been modified from its original specification?

  • Ask for important information and answers to your questions to be put in writing before you buy so you have proof of claims – don’t just rely on verbal claims or promises by the seller.
  • Find out about the dealer’s customer complaint procedures and whether they are signed up to a code of practice – if a problem does arise after the sale you need to know who to contact.
  • Remember that if you buy a car from a private seller or an auction, you may pay less but you will have fewer legal rights than when buying from a dealer.

Further information about consumer rights when buying a second-hand car are available at www.consumerdirect.gov.uk/cars.

The consumer rights campaign follows the publication in March of the OFT’s market study into the £24 billion second-hand car market which found that:

  • A clear majority (86 per cent) of all second hand car faults come to light in the first three months, suggesting many second hand cars sold may not be of satisfactory quality, and are consequently the dealer’s responsibility to fix. Despite this, nearly 30 per cent of buyers surveyed who contacted their dealer about a problem said they did not have problems rectified. Consumers who had this problem spend an estimated £425 each, or £85 million per year in total, fixing unresolved faults that are the dealer’s obligation to correct.
  • Consumers could potentially over-pay to the tune of around £580 million a year as a result of illegal clocking, which involves adjusting a vehicle to show false mileage. The OFT’s study concludes that legitimate reasons for adjusting a vehicle’s mileage are very rare, but despite this has identified 50 businesses openly offering ‘mileage correction services’. The report makes a number of recommendations aimed at reducing this problem.
  • Some dealers may be in breach of the law by pretending to be private sellers to evade their legal obligations to consumers, often to offload unsafe or clocked cars, which the OFT estimates accounts for more than £40 million of second hand car sales annually.
  • One in 11 car dealers relies on illegal disclaimers about the car’s history and condition, such as that a car is ‘sold as seen’ or ‘No Refund’.
  • Many dealers fail to disclose what mechanical and other pre-sale checks they have carried out. A mystery shopping programme commissioned by the OFT suggested that one in four dealers failed to supply sufficient information about the vehicle.

The OFT also published guidance (pdf 173kb) and a checklist (pdf 1Mb) for car dealers in June of this year to help them comply with consumer protection legislation.

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