Legal Article - Business Law

Selling a Written Off Car

Accidents do happen! The escalating cost of our insurance tells us so. Cars are damaged to varying degrees and if the cost of repair exceeds the value of the car then it is written off by the insurance company.

As a result of various horror stories arising from poorly repaired write offs the trade is very sensitive if the car is recorded as a write off and the value will be reduced and in some cases the motor dealer will not touch such a car.

So what does a seller have to reveal about the cars history. Generally the seller has to declare anything they know about a car. They have to tell a customer if a car has been a write off. They can no longer turn a blind eye to it and pretend they did not know.

They have to carry out checks on the vehicle and tell prospective customers of those checks and their results.

Also if the customer asks a question and the seller replies then if the reply is false then there is a misrepresentation (as well as a Trading Standards offence!).

It doesn't ever need to be a direct question about whether or not the vehicle is recorded on any of the registers.
If for instance the customer asked:

�Is the vehicle in good condition?� and the seller replied: �Yes.�

Then that could be misrepresentation particularly if the seller knew it was a write off.

In the same way if the customer asked:

Has it had any accidents?� and the seller replies: �No.�
 
Then that would be a misrepresentation if the car had had any accidents (whether recorded on the registers or not).

There are organisations, which check cars after being write offs and subsequently repaired in which case the check is recorded on the register.

However such cars are still prone to be of less value and so the business decision to go down that route needs to be fully considered.

NB - If all of your vehicles are insurance write offs and you do not pass this fact on to the customer then the Office of Fair Trading will deem this practice unfair and prosecute. Also it will be considered when your Consumer Credit Licence comes up for renewal � you may well have it revoked.

Selling and Repairing Unroadworthy Vehicles

Selling and Repairing Unroadworthy Vehicles

To expose/offer for sale or sell unroadworthy vehicles without taking certain steps to make the customer aware is illegal. Unroadworthiness means that the vehicle would not pass an MOT test. 

So to have a vehicle on the forecourt presented for sale with an illegal tyre, or faulty light, with no additional information could lead you to a prosecution. This leaves the motor trader with a dilemma.

Most cars are sold as roadworthy and the seller often wants to put an MOT on it immediately prior to sale to give the full ticket. However this may not be the wisest course of action. 

 If you have the facilities on site, or a relationship with a local MOT station, then the minimum you should do, when intending to sell a vehicle as roadworthy, is to have a competent person check over the vehicle to ensure it is roadworthy prior to putting on the forecourt. 

 
Trading Standards Officers periodically do swoops on garage forecourts and check the stock. If any Unroadworthy vehicles are up for sale then you can be prosecuted.

One further step along the way you can take to ensure the cars are roadworthy is to actually have them MOTd before they are put up for sale.

A valid MOT certificate gives consumers some confidence that the vehicle is roadworthy and it will help if Trading Standards do carry out an inspection and find an odd vehicle not to MOT specification.

You are permitted to expose/offer for sale or sell if you can prove that you have made the customer aware that the vehicle is unroadworthy, its use on the road would be unlawful, and that you are satisfied it will not be used on the road until repaired and MOTd. 

If it is your intention to sell a vehicle as unroadworthy you should make the above information absolutely clear and prominent by way of a notice on the vehicle.

If the customer agrees to the purchase on those terms then the information should be repeated on the sales documents and the customer has the opportunity to read and sign to confirm their understanding.

As well as relaying to the customer that it is unroadworthy, and illegal to use it on the road, and that it should not be used until repaired and MOTd, we would also suggest that the customer should sign to confirm they will transport it away from your premises.

Needless to say, you should not arrange for a test drive of an unroadworthy vehicle on the road and you should not supply the previous MOT certificate.

There is a further offence in respect of repairing a vehicle and causing it to be in an unroadworthy condition. It is therefore important that a Quality Control system ensures any work on brakes, and other safety items are checked.

Published: 16 Mar 2011

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