Legal Article - Business Law

New Vehicle Specifications

A vehicle can only be described as New if certain criteria can be met. If any one of the criteria is missing then, although it may be described as new for VAT purposes, for the Consumer Protection Regulations, it MUST NOT be described as a new vehicle.

This criteria was first laid down in a case against Ford Motor Company but has been reinforced in later decisions.

Remember ALL criteria must be met for it to be described as NEW.

a) The vehicle should not be the subject of a retail sale.

The situation is confused where the vehicle had been sold and registered but then subsequently deregistered. To be able to legally deregister a vehicle it must not have been driven on the highway and yet by the very act of registering the vehicle for sale a contract for sale would have taken place.

Further complications would arise if the warranty or any guarantee or warranty were registered, even if not taken up.
In such circumstances, even though to all intent it is a 'new' vehicle its description should be qualified.

*It is also worth noting that if you deliver brand new vehicles prior to the issue of the new Registration Mark letter you will still be liable to the DVLA if the new owner uses them on the road prior to the tax applying.

The vehicle will then be downgraded to the previous registration letter and the new registration letter lost. To avoid this situation use a Lawgistics letter of indemnity to protect yourself.

b) The vehicle should have no more than delivery mileage.

What is delivery mileage is a matter of fact. If the vehicle has been delivered on a transporter then it may only be 4 or 5 miles. If it has been driven from A to B then it is that distance.

Remember if you disconnect the odometer in order that the mileage remains low, or turn the odometer back, then that constitutes an offence for which you may be prosecuted.

c) The vehicle should not have sustained substantial damage prior to supply.

This applies even if the repairs were carried out to an acceptable standard or even better than the original.

What then is substantial damage? This is very subjective or may vary from case to case. As a general guide the following may assist.

Small scratches, which can be buffed, out - not substantial.
A new body shell - substantial.
Everything in between is a grey area but where a vehicle had to have a new wing, which had to be welded on, this was considered substantial.

As always in these situations only the court can determine the final outcome. However to ensure that you are not the test case, err on the side of caution and advise any prospective customer of the nature and extent of any damage and repair prior to sale.

Remember that on all new vehicles on display you must also display the Fuel Consumption Figures in accordance with the Regulations. For further information Contact Lawgistics.

Published: 16 Mar 2011


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