Law will force dealers to 'pull their socks up'

EU legislation set to become UK law in the first half of next year will make it easier for motorists to reject faulty cars or demand repairs.

The new EU law will apply to new and used cars sold by recognised motor retailers but stops short of insisting all cars are sold with a guarantee.

Consumers will have the right to demand replacement, repair or reduced cost for any new or used car which does not “conform to the contract of sale” up to two years after delivery. The initial proposals suggested a one-year period after delivery for used cars, as reported in the June 22 issue of AM, but the UK Government has decided not to take up this option.

In an important reversal of the burden of proof, any non-conformity occurring within six months will be assumed to have been there at the time of delivery.

In most cases new car sales will be covered by the existing three-year manufacturer warranties. But, as with all warranty work, dealers will be the first point of call for dissatisfied customers. The right to replacement has only been used previously in an abortive marketing exercise by Rover and Ford.

Goods 'conform' to the contract of sale if they “comply with the description given by the seller; are fit for the purpose the consumer requires them; and show the quality and performance normal in goods of the same type”.

The directive specifically includes any “public statements made about the goods by the seller, the producer or his representative particularly in advertising or on labelling”.

Trading standards officers believe the new law will force dealers, particularly of older cars, to clean up their act and take the preparation and description of used cars more seriously.

Peter Stratton, Trading Standards lead officer for the motor trade, said all dealers, including the major groups, would have to look at their systems to ensure they comply.

“If a dealer claims a car has had an 80-point check, they will have to prove it has been done,” he said. “We have quite clear examples over the years where workshops have not done claimed checks and still booked two hours to the job sheet. Some of them will have to pull their socks up.”

Mr Stratton said the new legislation would also put a stop to the sale of “worthless extended warranties” which did not cover faults in the car at the time of sale.

Officials at the Department of Trade and Industry, under new Secretary of State Patricia Hewitt, are working to redraft UK laws to comply with the directive. They expect to have them ready by the end of this month but the legislation will not be in place until the first quarter of next year at the earliest.

The Government plans to leave the existing Sale of Goods Act (1979) in force. That already gives customers powers to reject goods within 'a reasonable time' and to claim damages up to six years from the date of delivery if faults were present.

The Government is not planning to take up an option to reduce the reimbursement available to take account of the use the consumer has had of the goods since they were delivered to him.

Ministers believe this should be a matter for the courts to decide “on the basis of what was reasonable”.

However, the legislation does recognise the complications of replacing used goods because of the specific nature of the product. Therefore the right to a replacement will not “generally” be available for used cars.

It is also clear the customer cannot claim a disproportionate remedy, which would impose unreasonable costs on the dealer, but it is up to them to decide whether to accept any remedy offered. Replacement or repair are to be offered before a reduction in purchase price.

Dealers can pursue remedies against producers, previous sellers or other intermediaries in the contractural chain but the new legislation only covers sales from a motor retailer to a personal customer. Sales to companies are not included and neither are sales at auctions where the public are free to attend.