Dealers could lose money if they don’t give customers full terms with a warranty.
That’s the warning from Lawgistics in its latest legal update.
Nona Bowkis, legal adviser at the law specialist for the automotive industry, said dealers were under no legal obligation to provide a warranty, as customers were protected by the Consumer Rights Act 2015 in most cases.
However, what caused most problems was when a dealer had given a verbal warranty or had written something on an invoice without specifying the terms.
‘We still see invoices with the words “three months’ engine and gearbox warranty” and complaint letters from customers saying the dealer told them there was six months’ warranty on their vehicle.
‘These letters are usually accompanied by demands for payment for some sort of repair or upgrade.’
But liability on the part of the dealer depended on various factors, she said.
‘Firstly, there is no legal requirement to provide a warranty. In most cases, a consumer will have the protection of the Consumer Rights Act 2015 and any warranty given will only be in addition to those rights.
‘The lack of terms not only means the dealer has breached the Consumer Contracts Regulations 2013, but also means the dealer has gifted the consumer a great opportunity to get money from said dealer to which the customer would not otherwise be entitled.’
She added: ‘Dealers do not have to offer a warranty. But if they do, they must provide full terms, so everyone is clear as to what is and, often more importantly, what is not covered.’
She said some dealers avoided using mainstream warranty companies because they felt they were pricey and often didn’t pay out on items dealers felt they should have, leading to the dealers stumping up themselves to keep the peace.
‘This is often the main reason dealers use their own warranties. However, if warranties are created without written terms and conditions, as required by law, it will cause problems.’