Don't get stung buying a used car
More than 47,000 people logged complaints about second hand car dealerships in 2008, according to new figures from Consumer Direct.
The government-funded advice service reports a total of 1.6 million calls and emails throughout last year from angered consumers, with 47,019 complaints about second-hand cars purchased from independent dealers. Although cars topped the list of complaints, Consumer Direct also saw a flood of charges against mobile phone service agreements, TVs and women’s clothing.
Michele Shambrook, operations manager for Consumer Direct, says: “Many millions of people are losing out financially from sub-standard goods and services but very often consumers do have routes for redress.
“Finding out about your rights is the first step to claiming the refunds, repairs and replacements you may be entitled to.”
1. Buying from a dealer
If you buy from used car dealer then, under the Sale of Goods Act 1979, you have several legal rights - the car must be of satisfactory quality, fit for its purpose and as described.
According to Consumer Direct, the vehicle must “meet the standard a reasonable person would regard as acceptable”, taking into account its cost, the way it was described, its age and mileage.
However, be aware that if you inspect the car, or ask someone else to give it a once over, and don’t spot any obvious faults, then the dealer may be able to shrug off responsibility.
2. Buying online
You are still covered under the Sale of Goods Act if you buy your car from a dealer over the internet, so the rights described above still apply. You may also have additional rights under the Distance Selling Regulations, which cover online purchases.
However, buying online does come with a degree of risk. First off, only use reputable companies and ensure the website is ‘secure’.
Before you hand over any money (including a deposit), make sure you inspect the car in person and if possible pay for a professional to carry out a vehicle data check. You should read the small print carefully, and print off as much information about the vehicle in advance, including the terms and conditions, quotes, receipts and a description of the car.
When it comes to paying, it’s not advisable to pay by cash. Using a credit card will see you covered under Section 75 of the Consumer Credit Act, and could offer additional protection from fraud.
Consumer Direct says people buying cars from dealers online should always get a confirmation number and confirmation of their order by post, fax or email.
Bear in mind that the rights described above only apply to buying online from a dealer – if you are buying from a private individual, you have fewer rights (see below).
3. Private sales
Buying a car from an individual could save you money, but you have less legal protection and it can be hard to ensure that the deal is ‘kosher’. For example, how do you know the car isn’t stolen or subject to finance agreement?
Although the seller is legally obliged to give an accurate description of the car, Consumer Direct warns that trying to sue could be tricky as you may not be able to find the individual.
Top tips when buying a used car:
1. Find a trustworthy dealer
It is worth choosing a dealer that is a member of a trade association, as they will follow a code of practice. In addition, Consumer Direct recommends dealers whose cars have been inspected by an independent engineer or one of the motoring organisations.
As well as asking friends and family for recommendations, you can also find a list of dealers that are trade association members from the Retail Motor Industry Federation or the Scottish Motor Trade Association
2. Take it for a test drive
Taking a car for a spin is a good way to make sure its road handling and brakes are up to scratch. You should also take note of the seat belts, the exterior lights, the handbreak and the gears.
Keep an ear open for any strange mechanical noises.
3. Inspect it
You should also take your time assessing the exterior and the interior of the car, in daylight.
Keep an eye-out for rust, damaged tires, oil leaks and faulty windscreen wipers/seat belts/windows etc. Ask about any body work, such as replaced panels, welding or different patches of colour/texture.
If you don’t know a lot about cars then take someone with you who does.
Consumer Direct also recommends that you ask the dealer if the car has been in accident and is a write-off, as they are under no obligation to volunteer this information.
4. Agreeing the deal
Once you have made the decision to buy a car, ask for a discount. Haggling is quite common in the used car business, and if you don’t ask, you don’t get. Remember, the worst that can happen is they say no.
Also, make sure the price you are being quoted includes VAT, number plates, delivery charges and road tax.
If your dealer offers you an incentive (such as free insurance or an extended warranty) then ask them to put everything down in writing.
6. Warning signs
Consumer Direct has outlined some warning signs you need to be aware of when buying a used car.
* Some dealers pretend to be private sellers to avoid their legal obligations and to get rid of faulty or over-priced cars. Watch out for the same contact number in several adverts or adverts that ask you call at a specific time.
* You can reduce your chances of buying a stolen car by asking to see the vehicle registration document (V5). Check for any spelling mistakes or alternatives, and make sure the details match those on the owner’s driving licence.
Also, make sure the V5 has the same number plate, vehicle identification number (found on a metal plate in the engine compartment) and engine number to the car you are considering buying.
Remember, if you buy a stolen car then the police can take it from you and you will not get any compensation. You may also still be obliged to pay off any car finance loan you use to buy the vehicle with.
* If you buy a car that was previously bought on hire purchase or conditional sale then remember it legally belongs to the finance company until all the payments have been cleared. While you may be allowed to keep the car (assuming you bought it in good faith) there is no guarantee of this.
* Some dealers may alter a car’s mileage clock to make it more attractive to buyers. Look out for any disclaimers on the contract. You should also check the MOT certificates and service documentation for mileage readings taken by mechanics.
Invented by a Frenchman in 1954 and ironically introduced in the UK on 1 April 1973, VAT is an indirect tax levied on the value added in the production of goods and services, from primary production to final consumption and is paid by the buyer. Its levying is complex, with a number of exemptions and exclusions. For example, in the UK, VAT is payable on chocolate-covered biscuits, but not on chocolate-covered cakes and the non-VAT status of McVitie’s Jaffa Cakes was challenged in a UK court case to determine whether Jaffa Cake was a cake or a biscuit. The judge ruled that the Jaffa Cake is a cake, McVitie’s won the case and VAT is not paid on Jaffa Cakes in the UK.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.