According to a report on the UK’s £24bn used car market by the Office of Fair Trading (OFT) one in five of the 3.6 million people buying a second-hand car from a dealer each year experienced a problem.
But, following a nine-month study of the market, it decided existing laws were sufficient to clean up the sector.
Car buyers tend to go to a dealer for “peace of mind” rather than get a cheaper deal from a private buyer, the report argued.
Yet, there were 650,000 complaints to Consumer Direct in 2009 about used vehicles bought from dealers and this was the biggest consumer gripe for the fourth year running.
Some 67% of problems with these cars – often mechanical – came to light within a month of the car being bought. Under the Sale of Goods Act, the dealer should resolve the problem, with a refund, repair or replacement if the vehicle was defective when sold. But nearly 30% of buyers asked in an OFT survey said they did not have their problem rectified and instead spent an average of £425 to get it fixed.
The report also claimed that dealers often failed to tell customers whether they had made checks on a car’s history as less than 30% of the OFT’s mystery shoppers were shown the car’s service history.
Other issues highlighted by the report included:
A £40m a year market in second-hand cars sold by dealers masquerading as private sellers
The illegal use of disclaimers which say a second-hand car is “sold as seen” or “no refunds” are available
Increasing the value of a car by £1,700 by illegal mileage clocking.
An estimated one in eight cars has a “mileage discrepancy”, according to the HPI checking service. Clocking costs consumers an estimated £580m a year in higher prices, with the average car clocked by 67,000 miles.
Some legitimate instances of correcting mileage exist – such as when a counter is broken and replaced, or when a digital counter’s software fails. However, the OFT claimed that this was insufficient to keep 50 companies in the UK – which openly offer mileage correction services – in business in addition software is also advertised online by other parties with ways to alter mileage.
The OFT has repeated its recommendation – first called for in 1997 – that a registration scheme be set up for these businesses, or for them to be banned. It also recommended that MOT test mileage data be shared with vehicle check companies.
The OFT report concluded that existing laws – most notable the Consumer Protection Regulations that have been in place since May 2008 – are sufficient for dealing with rogue motor traders. It said that enforcement of these laws was now a priority, but accepted that trading standards departments which policed the sector had limited resources as they are funded by local government.
It also wants greater education of consumers about their rights and clear guidance to dealers.
The industry has repeatedly said buyers should go to legitimate companies, and trading standards officers have called on these companies to shop the rogues.
“Car dealers have been seen as a closed shop who do not want to be seen to tell tales…” said Peter Stratton, of the Trading Standards Institute.
Source: Consumer Direct