LawJaw

Will finance sales become the next PPI scandal? Increasingly the new controls sought by the Financial Conduct Authority, and in turn, the Financial Ombudsman Service, will give rise to motor retailers who ‘push’ finance coming under the spotlight. A recent PPI case that went via the Court route rather than FOS has a clear overlap with plain finance selling. The case (Michael and Patricia Saville v Central Capital Ltd 2014) was in regard to the sale of a mismatch between the sale of short time PPI (5 years) for a 25 year loan. This, of course, was not in relation to a sale of a vehicle, and, in fact is the opposite way round from the various PPI-FOS complaints we have dealt with. PPI issues have generally been in regard to selling a longer term PPI when the customer may have potentially wanted to exchange/sell the car earlier. However, the very same problems could arise for businesses being pushed by finance companies to sell more ‘commission-earning’ deals. In turn this could lead to Sales teams/Business Managers looking to move customers into finance deals which are not matching ‘demands and needs’. In the case above the Judge highlighted the need for... a. an ‘enquiry’ phase to understand the customer’s demands and needs b. an ‘assessment’ phase when the seller needs to assess whether the product is suitable for those demands and needs If the customer wants an ‘unsuitable’ product the seller must expressly draw the customer’s attention to the demands and needs not met by the policy. As a case in point, if the customer wants to have the facility to exchange a car every 3 years then the negative effect of a 5 year deal must be drawn to his/her attention (and evidence in writing retained to support this!). This requires to be carefully thought through because many retailers start from the question about budgets e.g. ‘how much can you afford per month?’ A 5 year deal may bring the payments down compared with a 3 year deal. BUT, if the customer wants to exchange the car after 3 years there may be a conflict.

We do not sell cars and probably do not understand the difficulties in finding an identical car... but this makes good business sense! 2 x Sales + Issue Sorted = RESULT

Mr and Mrs B rightly got the car. You’re in business and you’ve sold it...well done!

In my time here at Lawgistics Ltd it has become evident to me that, in the vast majority of cases, consumers expect cars that are many years old, having done many, many thousands of miles and for which they paid very little for, to drive as it was still hot off the manufacturers’ production line. The buyer has a gross over-expectation of their purchase. However, If I had bought a washing machine for £20 that was 12 years old from a family with 6 children would I expect it to last in the same way as if was £300, new and from a High Street retailer? No. Would I think that if that £20 washing machine needed a part replaced 5 months later that I had been sold a “dodgy†appliance? No. As one of our clients stated about consumers, “They expect champagne cars for lemonade moneyâ€. The CAB state http://goo.gl/VB1zFu that the most complained about consumer issues is around dodgy second-hand cars, with 6000 used car complaints reported a month. Faults are one of the most common problems. Firstly, I take exception to them stating that their complaints are about "dodgy" cars - how can they say that when, for the most part, they only spend a few minutes speaking to one party and are often not mechanically or legally qualified? Secondly, how do they know that those cars were defective? I say the most common problem is “wear and tear†– something that buyers seem to conveniently forget the moment they’ve used the mileage and previous use to negotiate a hefty discount.

Mr Crampton, in the circumstance you describe Webuyanycar would be the trader.

You got it Mr Edmonds ... but please keep this quiet, for the sake of the trade. You can not restrict a consumers statutory rights. Of course every case is different, subject to the T + C's of the auction i.e Trade Only.

Firstly, a garage can sell a car to a private buyer without giving a Warranty. There is no legal obligation on a garage to provide anyone with a warranty... http://www.lawgistics.co.uk/used-car-warranties/motor-trade-warranty-guarantee-service-contract/warranties-the-legal-requirements-when-selling-second-hand-cars However a private buyer does have legal rights when buying from a trader... http://www.lawgistics.co.uk/used-car-warranties/motor-trade-warranty-guarantee-service-contract/what-are-the-customers-legal-rights-when-buying-a-used-car What has been missed here is that the Auction House almost never owns the vehicles that are sold. They are acting as an agent of the owner who is wishing to sell it. If the owner/seller is a private individual, their Sale of Goods/contractual obligations are very limited and a greater risk is passed to the buyer as regards defects. Where the seller/owner is doing so in the course of trade or business then the Sale of Goods Act does apply. If the buyer is a private individual then the Unfair Contract Terms Act prevents their legal rights from being eroded.