Used cars: your top five questions answered

Business Companion supports you to achieve and maintain compliance with trading standards and consumer laws. How does it do this? It is designed by trading standards and consumer law professionals, in collaboration with business, to provide you with clear, accurate and practical advice.

It is this collaboration with business that enables Business Companion to focus on the questions that you want answers to.

Business Companion has teamed up with the motor trade to look at the top five questions about used cars and give you not just legal, but practical answers.

Q. The law says a consumer has 30 days to reject goods, including used cars, that are faulty. Do I have to give the consumer his money back or can I fix the car under warranty?

A. When you sell a used car to a consumer, the law says it must be, amongst other things, of satisfactory quality. What does satisfactory quality mean? What one consumer accepts as general wear and tear another consumer may insist is a fault. The general rule is that the car should be of a reasonable standard, taking account of its price, description and fitness for purpose. The car's appearance, safety, how long it lasts in normal use and whether it is free from minor faults also count towards deciding if it is of satisfactory quality.

If the car is faulty, the law says a consumer has 30 days from the day after he takes delivery to reject it. You must then give him a full refund. If he has part-exchanged a car, you must return it or give him its equivalent value.

However, the consumer might ask for or agree to a repair (or replacement) as an alternative to a refund. You cannot insist that a consumer accepts a repair if he wants a refund, nor can a consumer demand a repair if it would be too costly for the business. Take note when offering or agreeing to a repair that if it doesn't solve the problem, a consumer may have an extended time to reject the car.

A consumer may agree to repairs under warranty. This is fine, but remember that any warranty you supply, whether it is free or sold with the car as part of the overall deal, is in addition to a consumer's legal rights and it cannot take those rights away. This means you cannot refuse to deal with a consumer's complaint because it is not covered by the warranty or the warranty has run out.

Q. A consumer has claimed his final right to reject a car after the repairs I carried out did not work. I know that I can make a deduction for use when I refund the consumer but what is a reasonable deduction?

A. You can negotiate a deduction with the consumer but it must be reasonable and justified. It is unlikely that simply offering the trade price would be considered fair and reasonable. You may wish to consider a deduction on a 'pence per mile' basis for the extra mileage done or for any significant wear and tear that wasn't apparent when it was sold. Whatever method you use, it pays to keep good records so that you can justify the deduction you make.

Q. I have a website that I use to advertise cars but I do not sell online. I get many enquiries from consumers and often sell cars over the phone. If I take a deposit over the phone, organise the order by email and the consumer collects the car in person, it this a distance contract? If I give a refund on a car bought on a distance contract, must I also refund the deposit?

A. First things first, be clear about what a distance contract is. It means a contract that is concluded between you and a consumer without face-to-face contact (such as online or over the phone) and where your business is set up to sell at a distance. Concluding a contract means the point when a legally binding agreement is made.

If a contract to buy a car is concluded by phone, it is a distance contract even if the consumer later collects the car in person; if the contract is concluded when the customer collects the car it is not a distance contract. Of course, the consumer is then free to back out of the proposed deal because there isn't a contract and you must then refund any payments made.

Giving a refund on a car bought on a distance contract includes giving a refund on the deposit.

There are other rules that apply to distance contracts. Make sure you get up to speed with them.

Q. The law says that I only get the chance to carry out one repair (or one replacement) if the car is faulty. What is classed as one repair? Can diagnosis and repair be one chance? What if two parts are required to fix a fault?

A. It makes good business sense to check the cars you have in stock before you sell them to make sure they are in good working order and are of satisfactory quality.

If a consumer complains that the car is faulty and he agrees to a repair (or replacement), you only get one chance to repair it. It is likely that if several faults are reported at the same time and you repair them at the same time, it is classed as one repair. You may need to work out what the fault is before you offer a repair. This diagnostic work and the repair itself will probably be counted as one repair.

The law does not prevent you from offering further repairs if the consumer is happy to accept them, as long as you remember that if he refuses, he is entitled to money back.

The bottom line is: make sure the first repair solves the problem!

Q. A consumer has complained that the in-car Bluetooth system is not compatible with his mobile phone's software. Is this a fault as the car itself is still fit for purpose?

A. The issue of compatibility is best ironed out before the consumer buys the car.

If a consumer stresses before he buys the car that the connectivity between his mobile phone and the in-car Bluetooth system is important to him and you sell the car with an assurance that everything is in working order and compatible, you may be legally responsible if it isn't. This is because the law says the car is not fit for the particular purpose that the consumer told you about. You may also have broken the rules on unfair trading.

This information is intended for guidance, only the courts can give an authoritative interpretation of the law.

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