Business Advice > Motor Vehicles

Introduction

The Trading Standards Service enforces criminal legislation, which means that failure to comply with the requirements outlined here may lead to you or your business committing a criminal offence.

When we visit your premises, we are looking to see whether you are complying with the requirements of the legislation referred to in this guide. The department views these inspections as an opportunity to advise you on how best to implement these requirements. It is hoped that the information given here can act as a reference to enable you to comply with the law on an ongoing basis. If at any time you have any question or problems affecting your business, you can contact us at the address given at the foot of this page.

The Use of Mileage Disclaimers

A vehicle mileometer (odometer) reading is a “trade description” as it indicates the distance travelled by a vehicle. Unless you take effective and positive steps to prevent the mileage being relied upon, prospective purchasers will be entitled to regard it as correct. It is a criminal offence for a trader to sell or offer to sell a vehicle with an incorrect mileometer reading or to alter the reading to make it false. The correct use of a disclaimer will, in most circumstances, protect you from committing an offence.

However, it is important to note that as a trader, you cannot protect yourself by using a disclaimer if you have altered the mileage reading, changed the mileometer or if you know that the vehicle has travelled a greater distance than indicated. You will need to consider carefully whether or not to disclaim the mileages of vehicles that you sell and which you have on your forecourt. If you can satisfy yourself that the mileage is correct, you may choose not to use a disclaimer.

Things to consider are:

• Does the vehicle have a full service history?

• Is it accompanied by all previous MOT certificates?

• Will the seller sign a declaration that the mileage is correct?

• Have you contacted the previous keepers regarding the mileage?

You will need to take all reasonable steps to satisfy yourself that the mileage is correct before considering not using disclaimers. If you do not disclaim the mileage and do nothing to check its accuracy, you may be committing an offence. “Forgetting” to display a disclaimer is not a valid excuse. If you wish to use disclaimers, you should use ones with approved wording such as the ones given below. If you do use disclaimers, then you must not make any reference to the mileage either in negotiations, warranties or advertisements.

By using the first disclaimer, you are stating that you have at least taken some steps to verify the mileage so do not use this disclaimer unless this is the case.

REMEMBER: If a vehicle is on your forecourt and the mileage is not disclaimed, then you will be warranting that mileage and you could be committing an offence if it is wrong. If you are taking steps to verify the mileage and have the vehicle on the forecourt, you would need to disclaim the mileage until you have confirmed the accuracy of the mileage.

When describing the vehicles you have for sale, you must ensure that the descriptions you apply are accurate and unambiguous. This will include descriptions given in advertisements, posters, details on vehicles and oral descriptions. If a description you use is false or misleading, then you may commit a criminal offence. When describing your vehicles, you will need to take reasonable steps to satisfy yourself that the descriptions are correct. Do not rely solely on information provided by others. You will have to carry out your own checks.

Business Advertisements

When advertising your goods for sale, you must make it absolutely clear that the advertisement is a trade advertisement. This should be obvious if the advert is placed under your business’ name but if not, you should include wording such as “trade sale” to make it clear to readers of the advert. It is a criminal offence to place an advertisement without making it clear that it is a trade advertisement.

Business Documentation

If you are:

• a company that trades under a name that is not its corporate name, OR

• a partnership which does not trade under the names of all the partners, OR

• an individual who trades under a name other than their surname, with or without first names or initials,

then you must comply with the Business Names Act 1985. This requires that:

• the name of the company, OR

• the name of each and every partner, OR

• the individuals name, AND

• an address at which documents can be served.

must appear on:

• a sign displayed in the premises where you carry on your business and where you deal with customers or suppliers,

• business letters,

• written orders for the supply of goods or services,

• invoices and receipts, AND

• written demands for the payments of business debts.

If you are a limited company you must display your company name outside every premise you trade from. Also, on all business letters and order forms, you need to display:

• the company’s place of registration,

• the company registration number, and

• the address of the registered office.

Pricing

Under the Price Marking Order, all vehicles on your forecourt that are available for purchase must bear an accurate price. This must be the price at which you are willing to sell the vehicle to prospective purchasers. You must make sure than any prices that appear in your advertisements are the same as the price given on the vehicle. If the prices are different, then you may be committing a criminal offence.

Prices given in the press should be valid until the next edition of the publication. The price must include VAT and must not contain any “hidden extras”, i.e. it must be an all inclusive price. It is important to ensure that you do not mislead consumers as to the price at which you are selling the vehicles otherwise you may commit an offence under the Consumer Protection Act 1987.

Finance

Under the Consumer Credit Act 1974, if you have the facility to provide or arrange for finance for the purchase of vehicles, you must have a current consumer credit licence that covers your type of business. The licence must include the name(s) under which you are trading. Even though you may not be able to arrange finance yourself, introducing a consumer to a source of finance requires you to be licensed.

You will commit an offence if you trade without a licence when you should have one. If you do not hold a licence and wish to apply for one, you can contact the Trading Standards Department and we will send you an application form. Licences are issued by the Office of Fair Trading.

Credit Advertising

If you advertise on your premises or in the press and your advert contains information relating to credit or the facility to provide credit, then the contents of the advert has to comply with the Consumer Credit (Advertisements) Regulations 1989. These requirements may be triggered even if you only state that you are licensed credit brokers. If you wish to advertise credit in your advertisement, you can contact the Trading Standards Department and we can provide advice.

Unroadworthy Vehicles

Vehicles that you sell, offer to sell or have on your forecourt for sale must be roadworthy. If you sell, offer to sell or have on your forecourt a vehicle that is not roadworthy, then you will commit an offence. A vehicle is considered to be unroadworthy if its use on a road in that condition, by virtue of provisions relating to Construction and Use of Vehicles and Equipment, would be unlawful as respects:

1. brakes, steering gear or tyres,

2. the construction, weight or equipment of the vehicle,

3. it is in such a condition that its use on a road would involve a danger of injury to any person.

Also, you will commit an offence if any repair you carry out on a vehicle makes the vehicle unroadworthy. If you wish to sell a vehicle that you believe to be unroadworthy, you will need to take all reasonable steps to make a prospective purchaser aware that the vehicle is unroadworthy and that its use on the road would be unlawful.

Further, you would have to be reasonably certain that the vehicle would not be used on the road until it is roadworthy. To satisfy this requirement, you would need to ensure that the vehicle was not driven from the premises. When selling unroadworthy vehicles, you will need to ensure they are clearly identified as such. If the price you ask for an unroadworthy vehicle is unrealistic, then it will not be considered to be so.

Fuel Consumption and CO2 Emission Figures

These requirements apply to new cars which have not previously been sold to a consumer. A car dealer must ensure that a 'fuel economy label' is clearly displayed on or near each new car displayed or offered for sale. A 'fuel economy label' contains the official fuel consumption and official specific emissions of CO2 for that vehicle.

Terms and Conditions of Business

When a consumer purchases goods from a trader, they have certain statutory rights provided by the law (these are discussed later). These rights cannot be taken away from the consumer. You must ensure that any terms and conditions contained in documents or in signs do not attempt to override a consumer’s statutory rights. Such terms are called “restrictive statements” as they are an attempt to restrict the customer’s rights.

An example of a restrictive statement is “No refunds” or “sold as seen, tried and tested”. Not only are such statements ineffective but their use is a criminal offence. When you make any reference to a consumer’s rights without attempting to restrict them, for example by stating that they have a “three month warranty”, you must also state that it does not affect their statutory rights.

The Customer's Rights

When a consumer purchases goods from you, the Sale of Goods Act 1979 requires that the goods supplied must be of satisfactory quality, fit for their purpose and correctly described. These are often called “statutory rights”. Goods will be of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory. What a person can reasonably expect of a new car will be different to what they could reasonably expect of a second hand car.

Also, the price paid for the car will be a factor to consider. It is unlikely that a new car with a small scratch will be of satisfactory quality whereas that may be acceptable on an older second hand car. Satisfactory quality will also cover a vehicle’s durability. Although consumers cannot expect a second hand car to be as durable as a new car, they would not expect major mechanical problems to occur after only a matter of weeks.

If a consumer believes that the vehicle they have bought is not of satisfactory quality, fit for its purpose or as described, then there may be a breach of contract. In these circumstances, the consumer may be entitled to a full refund. If there has been a long lapse of time between purchase and the fault occurring, then the consumer may be entitled to compensation rather than a refund. In essence, the right to a refund will be lost with the passage of time and will instead become a right to compensation. If it has only been a matter of weeks since purchase, the consumer may be entitled to a refund. In those circumstances, the consumer is not obliged to bring the vehicle back to you.

You may need to collect it yourself. If the consumer is only entitled to compensation because of the lapse of time since purchase, they should inform you of the fault and give you the opportunity to either remedy the fault or contribute to the cost of repair. If you decline, then the consumer is entitled to go elsewhere to have the fault repaired and then to claim some or all of the cost from you, depending on the nature of the fault.

Third Party Warranties

If you offer a consumer a third party warranty, it will be in addition to and not instead of the consumer’s statutory rights. In circumstances where a defect has arisen which is not covered by the warranty, the consumer will still have rights against you because of their statutory rights.

Servicing and Repairs

The law requires that when you carry out a service for consumers or do repairs, you must do the job with reasonable care and skill. You must also carry out the work that has been agreed. If you fail to exercise reasonable care and skill, then you may not be entitled to payment.

Gloucestershire County Council, Trading Standards, Hillfield House, Denmark Road, Gloucester GL1 3LD
Telephone: (01452) 426201 - Fax: (01452) 426274 - Electronic Mail: tradstds@gloucestershire.gov.uk

Opening Hours: Monday - Friday 8.30am - 5.00pm (We do not close for lunch)

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