Knowing where you stand legally when a customer complains is essential. JAMES BATCHELOR chats to our Car Dealer Club lawyer Lucy Bonham Carter about how she can help club members.
Being a car dealer is fraught with difficulties. Not only do you have the trouble of finding the right stock, but you have to buy those cars at the right prices in order to sell them at a profit. Then there’s the risk of picking up a lemon, the taxman’s countless letters and the worldwide web to worry about.
But there’s one problem we all have to contend with – and it’s the biggest – the one which gives you the most sleepless nights and can make your life hell: Customers.
As much as we love them, they can be a real pain, especially when they think all of us are out to ‘get them’…
The smallest niggle, the quietest squeak, the stone chip ‘that wasn’t there when I bought it’, can all come back to haunt you in the form of the customer demanding a new car or for you to pay for the repairs.
As a caring dealer you want to do the best and keep them happy, but it’s not always easy – especially if it could end up costing you a fortune!
What’s more, it doesn’t help that there’s a host of consumer legislation that’s weighted in their favour either. The Consumer Protection from unfair Trading Regulations 2008 (CPR) and the Sale of Goods Act 1979 (as amended) have done their best to make dealers’ lives a lot harder, and has tipped the balance very much in the buyer’s favour.
Amendments to the Sale of Goods Act in particular mean that if the vehicle fails in the first six months after purchase, it is assumed that the failure was there at the time of sale. Clearly this isn’t so bad for new car dealers, but for those of you selling used vehicles it can cost you dearly.
Remember that cheap hair dryer you bought the missus at Christmas? The Sale of Goods Act says if it goes wrong you are entitled to a like-for-like new replacement. The same legislation is applied to second-hand vehicles, so, in some cases, dealers are occasionally under the impression they must stump up more than the price for which they sold the car!
But there is a way of covering your back – by joining Car Dealer Club! Launched last month, membership comes as part of the £34.99 a year subscription to Car Dealer Magazine and you’ll get access to advice from top industry lawyer Lucy Bonham Carter worth £199. She specialises in helping dealers like you fight cases against consumers – and has a habit of winning!
Along with helping Car Dealer Club members, Bonham Carter provides legal advice for The Daily Telegraph’s Honest John. She heads a legal team for an insurance company, and her department at AutoLaw encompasses lawyers, engineers, loss adjusters and insurance people. All this means Bonham Carter is well placed to access information relevant to a case within a few minutes.
‘I first started dealing with motor industry cases as a junior on the Mercedes “rust” group action and went on from there. The vast majority of my work now involves consumer cases involving the motor trade and my team probably handles more work in this area than any other office in the country,’ Bonham Carter says.
‘We are very hands-on. We have three preferred counsel on retainers who we use if we need to go to court.’
That’s all great news for Car Dealer Club members who get access to Bonham Carter’s advice when they need it on a confidential 24-hour help line.
It’s this advice which can help you avoid problems like that experienced by one dealer based in the Midlands. He contacted Bonham Carter too late after already paying a large and, crucially, unnecessary amount of money. The dealer sold a one-owner, 2001 Audi TT quattro 225 with only 46,000 miles on the clock to a London buyer. It was immaculate in every way with a full service history and was also sold £1,250 below retail value.
The buyer was told it needed two new tyres, which were low but not illegal, and seemingly left for London happy with his purchase.
At some point he took it into his local garage to have it checked over. The list of diagnosed ‘faults’ ran to several pages, with some ‘immediate and urgent’.
The bill to rectify these problems came to £1,400 with a further £1,700 needed to be spent. And the bad news continued for the dealer as the garage then diagnosed a possible failing turbo which, naturally, meant another very large bill. Tellingly, nobody fitted the required new tyres.
It was at this point that Trading Standards and the Citizens Advice Bureau got involved who pointed out that the vehicle was not roadworthy at the time it was sold – all because it needed those two new tyres. The vehicle was deemed not of ‘satisfactory quality’ and a refund was said to be required.
The customer was also told that he could demand ‘betterment’ – so in addition to a refund there should be an additional payment for the improvements he had made. Presumably exhausted and frightened by Trading Standards and Citizens Advice, the dealer refunded the money and in addition paid 60 per cent of the cost of the repairs.
Still not satisfied, the customer returned demanding further compensation for the 30 per cent cancellation fee on his insurance premium. At this point, the dealer contacted Bonham Carter for advice – just as he would have been able to do for FREE as part of being a Car Dealer Club member.
So did he really have to pay that additional fee? ‘The answer is of course not,’ rebuffed Bonham Carter. ‘It would have been sensible to replace the tyres before the dealer sold the car, but most of the other work was of dubious necessity and
it was questionable whether some of it had been done at all. In fact there are some suspicions that the customer and the repairing garage had some connections beyond those disclosed.’
A telling case, you would agree? If the dealer had contacted Bonham Carter and her team earlier, he could have saved thousands of pounds…
[FALSE] Dealer required to fix any fault which occurs in first six months
[FALSE] Consumer will win if vehicle fails within six years of sale
[FALSE] Warranty shields dealer from implications of Sale of Goods Act
[FALSE] Dealers can avoid liability by describing a sale as a trade sale
One dealer who did contact Bonham Carter in time was selling a BMW X3. The customer returned the car complaining it had failed. Both the dealer and BMW were concerned that because the vehicle was still under warranty, they would be liable for a large financial contribution to repair it.
Enter Bonham Cater who discovered that no service history of the car could be found.
The customer believed that a service was only due when ‘a light came on’. Due to the fact no maintenance had been undertaken, the £4,500 worth of repairs was wholly payable by the customer, and not the dealer. Even a contribution of repair on behalf of the dealer was refused.
It’s cases like this, where the dealer has contacted Bonham Carter and her team early, that show how she can help save you not only thousands of pounds, but valuable time, unnecessary stress and unpleasantness with the customer.
‘We settle the vast majority of cases to everyone’s satisfaction without recourse to court,’ says Bonham Carter. ‘In fact we only have had one case that has gone to court in the last year. We do this because, although we are instructed by one side, we will advise both parties on the legal framework in which the case will be handled.’
You may be wondering what’s in it for Bonham Carter. Supplying you with free legal advice just for being a Car Dealer Club member does sound too good to be true. But it’s not. The free legal advice is available via email or on the phone – and if you need Bonham Carter to take any case further she can represent you and give you 20 per cent off any fees thereafter. If you’re happy with just the basic free advice then that’s fine. There’s no obligation at all. you can’t say fairer than that…
Join Car Dealer Club and get 12 issues – plus the free legal advice worth £199 outlined above – for the bargain price of £34.99.