Q&A: What are car dealers allowed to do during lockdown? Here’s what you need to know about selling cars in lockdown

Time 6:04 pm, January 5, 2021

With car dealers across the country in some form of a national lockdown, businesses are trying to work out how they can still operate while remaining on the right side of the law. 

In a special Car Dealer Live show broadcast on January 5 – which you can watch in full above – the Car Dealer team received more than 50 questions asking for clarification on click-and-collect rules and how businesses can remain open during the national lockdowns.

You can watch the full broadcast at the top of this story, but below, with the help of legal experts Lawgistics, is a summary of the key issues dealers need to know to trade during lockdown.

Can I offer click-and-collect and click-and-deliver car sales?

In England, yes you can. The government’s guidance isn’t the clearest when it comes to car dealers, but at the moment all non-essential retailers can do ‘click’ services – and that includes car dealers.

What are the click-and-collect laws?

Every sale that occurs from now onwards is a distance sale because it’s not done on the premises.

In law, there are three types of sale: On premises, off-premises (essentially home selling) and distance selling.

You have to give customers two weeks – 14 days – to change their minds just like for any distance sale and you have to give certain paperwork.

What paperwork do I need for distance selling?

Giving the right paperwork tells customers how they need to return a car.

Dealers can set a mileage limit of their choosing (our legal experts say 20 miles is plenty and the right paperwork cuts the time for the customer to reject the car).

The failure of not giving paperwork means the customer has a year and two weeks to reject for any reason, and you may not be able to make a deduction for usage!

If you get the right paperwork, you can protect yourself from consumers who could take advantage. Lawgistics have templates to help dealers with this.

How does click-and-collect work when people are being told to stay home and only go out for essential reasons?

Under the current guidance, click-and-collect is allowed.

It’s suggested customers ‘should’ shop locally, but there is an allowance for customers to travel if they need to collect an item they’ve chosen to buy.

The very nature of click-and-collect is a person leaving their house to pick up an item bought online – and that includes cars.

Also, the guidance says people are allowed to leave their homes to fulfil a legal obligation – collecting goods is fulfilling a contractual obligation.

Should I cancel all non-urgent servicing bookings and encourage people to stay at home?

No. Car servicing and MOTs are allowed to carry on during lockdown, so it’s not advisable to cancel customers’ bookings.

Are service customers allowed to enter the premises and wait?

There’s nothing to say customers cannot do this, but businesses are under obligation to do everything in the most Covid-secure way and a key-drop would be preferable.

Are home test drives allowed?

Click and collect sales mean exactly that – the deal has to be done before the car is delivered or collected. Customers are not paying to test drive a car.

As all sales during the lockdown will be distance sales, customers will get a 14-day cooling off period which is in effect their test drive. Remember with the right paperwork you can set limits for how many miles this can be.

You can’t take a car to a customer’s house to test drive it before agreeing to buy it.

At the moment, test drives are allowed in Scotland but this is likely to change.

If a customer comes to collect, does it need to be done offsite or can it be onsite?

Technically, it needs to be offsite if a dealership does not have servicing workshops as their forecourt would be closed off for access.

However, that’s sticking rigidly to the guidance. Our legal experts say that as long as the car sales/display area is shut and the forecourt clearly fenced off, the customer can visit to fill out paperwork and collect the car.

This could be a small, fenced-off, Covid-secure area in the doorway of the dealership. All of this must be in accordance with your Covid-19 risk assessment and measures (such as social distancing and the wearing of face mask) must be in place.

I sold a car before lockdown but the customer isn’t collecting for a few days – does this count as a click-and-collect sale?

This depends on when the customer paid the deposit. If the deposit was paid before the car was viewed and test driven, distance selling rules will probably apply.

I don’t have a service department – can I still operate click-and-collect?

Yes, you can – you don’t need a servicing or an MOT operation to operate ‘click’ services.

Can I allow customers to look around my forecourt if they’re waiting for their car to be serviced?

No – a forecourt or an area where cars are on display, such as a showroom, are closed and customers should be prevented from doing this. Dealers need to make sure their premises don’t look open for sales.

For a click-and-collect sale, can I just take a deposit and the customer pays for the car by bank transfer on collection?

Yes, you can but it is classed as a distance sale. The rule is, if the customer has put any money down (a deposit, a portion or the full balance) on a car without seeing it first, it’s classed as a distance sale.

If a customer pays a deposit over the phone without seeing the car, can the deposit be refunded when they arrive?

No. If it were a reservation fee then yes, but as a deposit this isn’t okay. A deposit puts you and the customer into a contract. You can’t get around the rules by taking a deposit and then refunding it and doing the deal as you would do normally – that isn’t click and collect.

Can dealers in Scotland still operate ‘outdoor car lots’ as previously allowed?

At the moment, guidance on the Scottish government website says this is allowed.

If you have any questions that have not been covered in this Q&A, submit them to the team via the About Us contact panel and we will endeavour to get them answered for you.

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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