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Consumer Rights Expanded From October 1st

By raccars Published

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1 October sees a new Consumer Rights Act introduced in place of the old Sale of Goods Act. The new legislation addresses a number of ambiguities in the old system and also nullifies the earlier Unfair Terms in Consumer Contracts Regulations and Supply of Goods and Services Act. As far as car buyers are concerned, the new regulations make it easier to negotiate with sellers if a car turns out to be faulty or to get a refund if necessary.

Britain’s least trustworthy dealers should be left with “nowhere to hide” as a result of new Consumer Rights Act 2015, says RAC

Within first six months, onus lies with dealer to prove vehicle was not defective when sold

New law could boost resale values of second-hand cars

Despite the introduction today (1 October) of the Consumer Rights Act 2015, new data from the RAC shows just one in 20 (5%)* motorists are aware of the new law that gives anyone buying a vehicle significantly more protection if it turns out to be faulty.

The RAC believes the new law will strengthen the hand of buyers who think they have been mis-sold a used car or if a fault is revealed within the first 30 days. The new ‘short-term right to reject’ provision allows the buyer to demand a full refund – previously the dealer could simply replace or repair a faulty item or part.

Up to six months from the original date of sale, the dealer will be obliged to repair or replace the faulty part, and will only have one opportunity to fix the problem. If a repair or replacement is not possible or unsuccessful, the buyer will still be able to demand a reduced price or exercise their ‘final right to reject’, and demand full or partial repayment.

95% of respondents were unaware of the new law

New research from the RAC’s Opinion Panel found that 95% of respondents were unaware of the new law. Of those that did know about it, just 30% correctly identified that the law comes into force on 1 October 2015.

Despite the changes, four in 10 (39%) said they felt the new law would do nothing to change their confidence when purchasing their next used car, underlining the continuing deep-rooted mistrust of dealers.

According to the Department for Business, Innovation and Skills, British consumers spend 59 million hours every year making complaints about poor service and faulty goods. The new legislation is designed to reduce this complaining time dramatically and save the economy £4 billion over the next ten years. However, consumer organisations are making it clear that the public needs to be made aware of the new legislation and what it means. So far, public awareness is low to non-existent.

Previous legislation was rather vague, including the right to reject an unsatisfactory car within a timeframe described as reasonable. This clause has now been amended, to state that customers have 30 days to reject a car and claim a full refund - however to claim the full refund, the customer must show that the car is not of a satisfactory quality, not as described for sale or not fit for purpose. The customer must also prove that the fault was present when they took delivery of the vehicle.

If a fault occurs within the first six months of ownership but after that initial 30 day period, buyers must allow one repair attempt but can claim a full refund if that turns out to be unsuccessful or if another fault occurs. This will protect buyers from being regularly fobbed off by dealers who repeatedly promise - and fail - to fix faults. However, legal experts claim there are still grey areas within this clause, which will remain unclear until a few court case precedents have been set.

Nonetheless on the whole, the majority of consumers should be able to claim a full refund if a car experiences faults within the first six months, with the dealer entitled to deduct a reasonable amount, based upon the amount of use the car has had in the meantime. Dealers also now have access to Alternative Dispute Resolution in all sectors, if they cannot agree a settlement with the consumer directly.

If faults appear after the first six months of ownership, the onus is on the car's owner to prove the fault existed when the car was purchased, if they wish to claim a refund.

Dealers will notice the effects of the new legislation too, and some may develop strategies to protect themselves from frivolous refund claims. Some could require customers to sign a declaration that no faults were apparent on the car at the time of purchase, in order to avoid buyers retrospectively claiming the presence of faults which, in fact, were caused by them after purchase. Dealers could also employ checklists for customers to certify or photographic or video evidence.

The legislation does not come into effect if the car is sold with and repaired under a warranty scheme, which is separate to a consumer's statutory rights and allows for multiple fault repairs.

The new legislation also applies to car servicing, stipulating a course of action for consumers who feel a service has not been correctly performed.

Of course from the consumer's point of view, ideally the new Consumer Rights act will go unnoticed, as it only comes into effect should something go wrong with your car purchase.

"Any licensed dealer must now refund the sale price in full if a buyer returns a faulty used car within the 30-day period."

RAC Cars spokesman Pete Williams said: “Car buyers have long felt they are at the mercy of unscrupulous car traders, but the introduction of the Consumer Rights Act could finally turn the tables in their favour. Any licensed dealer must now refund the sale price in full if a buyer returns a faulty used car within the 30-day period.

“Over time, and subject to some successful test cases in the courts, the new law should begin to squeeze the most dishonest dealers content with selling sub-standard stock out of the market. There will be nowhere to hide for those actively selling vehicles to consumers that, frankly, are better off being sold for parts – if not sent to the scrapheap.

“On the flip side, those dealers who take the most care over their vehicles stand to gain, and we could see average used car prices increase as a result. What is clear is that the new law should have the very welcome effect of driving up standards among dealers, giving motorists much more confidence in their purchase.”

However the RAC warns that after six months the onus will be on the buyer to prove there is a fault with their vehicle, and that it was present at the time of sale. Motorists therefore need to be clear on their rights.

Pete Williams added: “After six months, the onus on proving a car had a pre-existing fault shifts to the consumer – so the responsibility will lie with them if they are to benefit from the new law. This is likely to lead to some difficult disputes between dealers and buyers.”

The RAC has prepared advice for anyone buying a vehicle on how the Consumer Rights Act 2015 affects them and what to look out for when buying a vehicle – a detailed guide will be available at www.raccars.co.uk. As the motorist’s champion, the RAC has long encouraged dealers to up their game when it comes to preparing a vehicle for sale. The RAC developed its 82-point ‘BuySure’ preparation standard for its Approved Dealer network to provide buyers total reassurance, and ensure cars are offered in the best condition possible.

The RAC also offers a range of services to help car buyers make the right choice and buy with confidence including car data checks, free valuations, vehicle inspections, as well as RAC Cars, the free-to-advertise search, buy and sell website.

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