Quality System - Vehicle Sales

It is imperative in every business that a risk assessment is completed for each and every stage and process within the organisation to determine the business liability and vulnerability to any situation.

The purpose of the Lawgistics Quality System is to identify the areas of risk within the business relative to the Trading Standards and other legislation. To provide policies, systems and procedures that will:

• Assist you to identify any area of risk or vulnerability

• Equip management with the tools necessary to raise the quality standards within the business and to prevent a problem arising in the first instance

• Train and instruct staff in their responsibilities, duties and obligations.

• Ensure a system of accountability and reporting structure throughout the organisation.
• A record system capable of identifying and documenting the precaution taken.

• Establish a structure to deal professionally with any customer problem.

•  Facilitate compliance audits at every level.

Where Do I Start?

Where Do I Start?

Before embarking on a journey it is always advisable to have a clear understanding of where you are, where you want to get to, and the route you are to take.

Completing a risk assessment and devising a system based upon it is no exception.

The following flow chart may help you identify the key areas that need exploration and how we have approached them.


Business Administration

Business Administration

Business/Company Name - It is essential that each business has a clear Business/Company name and identifies any additional trade name that may be used e.g. Company Name - Lawgistics Ltd

- Name in advertisements - Lawgistics

- Name on promotional material - Lawgistics (Peugeot) or Lawgistics (Vauxhall)

Step 1
Identify your Business/Company Name and its Registered Office or principal place of business.

Step 2
Identify each and every trade name that may be used.

Step 3
Ensure that the Company name and Registered office OR the names of the Proprietor or Partners together with an address for the service of documents is conspicuously placed

a) On the premises in a position where a prospective customer has access.
b) On all documentation provided as part of a transaction to the customer in particular any Order Form, Invoice or Headed Paper.

It is the responsibility of the Company Secretary or a nominated partner or the Proprietor to ensure that this task is completed.

Licensing Requirements

Licensing Requirements

Consumer Credit

Firstly establish whether a Consumer Credit Licence is required. If you are offering your own credit facilities or just introducing the customer to a source of credit - you need a licence. You also need one if you are offering vehicles for hire. There are certain exemptions, which Lawgistics will be happy to advise on but it is unlikely that they will apply here.

In selecting categories for your license you should also select category D and E if you will settle finance or a customer part exchange.

If you need a licence then that must be obtained from the Office of Fair Trading. On completion of the application form it is essential to answer the questions fully and honestly. Do not rely on a third person, such as an accountant, to fill in personal details. If you provide incorrect information at this stage it will come back to haunt you.

Any application must contain ALL trade names you intend to use. If you use a name that is not on the licence then that becomes unlicensed trading and all transactions will be potentially unenforceable.

Data Protection Act

Under this and subsequent legislation you are required to obtain a licence from the Office of the Information Commissioner formerly the Data Protection Commissioner if you hold or use any database comprising of customers personal details. In practice this will apply to all customer lists or records held on computer. The rights of individuals however extends to personal data held in structured manual files.



All documentation should be checked to ensure that it does not contain “small print” which the customer has no real opportunity of becoming acquainted with before entering the contract. All clauses or small print MUST be in plain intelligible language.

The Unfair Terms in Customer Contract Regulations sets an even playing field. Any one-sided agreement with clauses tipped in the favour of one party become void and unenforceable. It may also constitute an offence and if drawn to the Director of Fair Trading’s attention then he may immediately stop their use by means of an injunction.

This has already happened to a number of dealers, manufacturers and motor trade related organisations.

Lawgistics would be happy to advise. It is your responsibility to ensure it complies.

Human Resource Management

Human Resource Management

There are a number of aspects of Human Resource Management, which are relevant to the organisations Quality Systems. The following areas are considered:

- Contract of Employment
- Recruitment
- Selection
- Appraisals
- Training

Contract of Employment

Although the Contract of Employment need not be in writing it is normally good practice to do so as this can minimise later disagreements. Under the Employment Rights Act 1996, all new employees whose employment continues for a month or more, are entitled to receive a written statement of particulars of employment specifying the matters described below. You must provide a statement not later than two months after the employee starts work.

The following details must be given together, in a single document, and is known as the "Principal Statement". These details are:

a) the names of the employer and employee
b) the date when employment began
c) the date on which the employee’s period of continuous employment began taking into account any employment with any previous employer which counts
d) the scale or rate of pay, or the way pay is worked out
e) the pay intervals (hourly, weekly, monthly etc)
f) any terms and conditions relating to hours of work (including normal working hours)
g) any terms and conditions relating to holiday entitlement including public holidays and holiday pay (including rule on entitlement to accrued holiday pay on termination of employment). These rules must be sufficiently specific to allow the entitlement to be precisely calculated.
h) Job title or brief job description
i) place of work, or, if the employee is required or permitted to work at various places, an indication of that fact and the employer’s address.

You must also provide the following details, either with the Principal Statement or separately (but within two months)

• Any sickness/injury scheme
• Rules on pension and pension schemes (e.g. whether it is contracted out or not)

• Length of notice to be given by both employer and employee
• If the contract is “temporary” an indication of the expected duration

• if the contract is a “fixed term contract” the end date of the contract particulars of any collective agreements which directly affect terms and conditions of the employment including, where the employer is not a party, the person by whom they were made.

• the name or description of the person with whom the employee can raise grievance and the manner in which such applications should be made

• any disciplinary rules applicable and the name or description of the person to whom an employee can apply if dissatisfied with a disciplinary decision and the manner in which such applications can be made (companies employing fewer than 20 employees do not have to provide these details on discipline)

• where the employee is required to work outside the UK for a period of more than once month, details of the length of posting, the currency in which payment will be made, details of any additional benefits arising from the posting and any terms and conditions relating to the employee’s return to the UK.

The matters contained in the Principal Statement must be given in detail to the employee in one document. For the other matters the written statement can refer employees to another document for details providing the employee has a reasonable opportunity to read the reference document in the course of their employment or where the document is made reasonably accessible in some other way (e.g. a Staff handbook).
Any changes to the details described above must be given to each employee in writing at the earliest opportunity and in any event no later than a month after the change is made. If the change is to one of the matters specified in the Principal Statement the change must be given in full; otherwise the written notification may refer the employee to another document provided it is reasonably accessible.

We recommend that in addition to the written particulars of the main terms and conditions of employment that have to be given, the employer should provide a clear written document expressing all important terms and conditions of employment, works rules and procedures for resolving problems (e.g. in the form of an Employment Handbook).
The full written contract shall also deal with the many other issues which can protect your interests. These can range from terms restricting employee’s activities during and after employment through to health and safety. The following rules should be put in writing, as applicable:

• The authority of management to vary normal hours of work after due notice has been given.
• The need to work overtime when required by management after due notice has been given.
• Timekeeping and time recording (especially where time clocks or other systems are employed).
• Wage payments during sickness if such payments are to be made at the discretion of management.
• The duty of the employee not to conduct himself during working hours in any manner which can be construed as

a) detrimental to the interests of the employer,
b) offensive to the employer or other workers in the establishment, or
c) A hazard to the safety of the employer, himself or other workers.

• The duty of the employee to take all reasonable steps to prevent loss of or damage to the employer’s premises, plant, monies, equipment and tools.

• Disciplinary, grievance and appeal arrangements.

• Competition in his/her own time (for example, as a self-employed vehicle repair worker) by the employee with the employer.

• The acceptance of customer’s instructions (especially in relation to bribes and other inducements).

• The conditions on which tool kits and other personal possessions may be left on the employer’s premises.

• The employer’s right of search of the employee’s person, vehicle and hand luggage or parcels.

• The purchase of vehicle spares or accessories by the employee and work done on a vehicle owned by the employee on the employer’s premises.
• The circumstances in which vehicles owned by the employer or his customer may be driven.

• The use and misuse of trade plates.

Some special contractual terms

i. Probationary periods: If the offer of employment is made “subject to satisfactory completion of a probationary period”, which may be for three months, six months or any other period of time, the contract can be terminated at the end of the probationary period without giving rise to any legal problem providing the employer takes all reasonable steps to give adequate instructions, training and supervision during that period.

ii. Mobility clauses: A clear unambiguous written statement such as “the company reserves the right to require any member of their staff to work at any of their establishments in the UK”, or “at the discretion of the company, you may be transferred at any time during the period of your employment from one location to another” will protect the employer from redundancy claims and breach of contract claims. The actual enforcement of the term must be done in a reasonable manner to avoid losing an unfair dismissal claim. If it is not really necessary to insert such clauses (i.e. it is not essential to the effective operation of the business) a woman may be able to make a claim of indirect sex discrimination.

iii. Moonlighting and competition: There is an implied obligation on all employees to work loyally and faithfully for their employer during normal working hours. Thus, an employee who works either for himself / herself or for another during those hours, or soliciting the employer’s customers, will almost certainly be acting in breach of their contract. There is no need for any written statement banning such work, unless the employer wishes to emphasise the employee’s obligations to himself / herself. However, simply indicating that he/she is seeking other work, even for a competitor, or giving notice of work for one, would not be good reason for dismissal, unless there are grounds for believing that the employee was abusing his / her confidential position and information (see below).

Taking a job outside working hours, however, is not in itself a breach of this implied term even where that job involves competition, unless significant harm is done to the employer’s business, or the extra work undertaken by the employee affects his / her job performance. It is advisable to have a written term in the contract that restrains the employee from undertaking any work for a competitor, or competing directly against the employer, for the duration of his / her employment.

The clause should not be unenforceable as being in unreasonable restraint of trade and therefore contrary to public policy. Even where there is clear breach of a term of the contract of employment, before dismissal occurs the employer must act fairly (i.e. carried out a proper investigation, have reasonable grounds for believing there was a breach of contract and given the employee a chance to explain).

iv. Trade secrets and confidential information: There is no need for a written clause as there is an implied duty on all employees not to disclose to third parties their employer’s confidential information and trade secrets obtained in the course of their employment.

A written clause may, however, have a strong deterrent effect and is useful if it specifies as precisely as possible what information the employer considers confidential (e.g. price to be charged for a new model of car). Information would not be confidential where it is already public knowledge, or easily obtainable from another source, or which forms part of an employee’s general “know-how” or “stock-in-trade”.

v. Restrictive covenants: Generally, all contractual restraints on an exemployee’s freedom to work where or for whom he / she pleases are void as being in restraint of trade. It can be shown the restraint clause is necessary to protect a legitimate interest of the employer, however, and is reasonable both in relation to the interests of both parties concerned and the interests of the public, it may be enforceable.

Forms of restraints commonly found in employment contracts are clauses relating to confidentiality, non-competition and non-solicitation of the employer’s customers. Clauses prohibiting the poaching of other employees may also be included.

Restrictive covenants should be kept as narrow and specific as is necessary to protect the company’s interests in terms of the

• subject matter (e.g. a salesman specialising in selling Mercedes cars may be restricted from selling those of another company, but not from selling new cheaper cars of other makes)

• Duration (e.g. restricted for no more than one year maximum from selling Mercedes cars)

• Geographical area (e.g. if the franchise only operates in Yorkshire, a prohibition extending beyond Yorkshire would be invalid).

If the employer breaches the contract of employment of the employee concerned (i.e. wrongful dismissal) by dismissing without notice or insufficient notice, or in breach of the contractual disciplinary procedure, he/she cannot enforce a restrictive covenant.

Summary dismissal for gross misconduct would not be wrongful dismissal.
vi. Training cost contracts: Some employers make their employees sign an agreement to the effect that, if they leave the company’s employment within, say, two years after the completion of a training course, they have to repay all or part of the course fees. Such agreements should ensure that

• The sum which the employee has to pay back is no greater than the cost to the employer of the training.

• There is a sliding scale of the percentage which the employee has to repay which decreases with time.

• The obligation to repay should expire within two years (at the latest).

• The cost to be repaid is clearly specified e.g. price of course, expenses and lost revenue whilst trainee is absent.
• a right to deduct the amount owing from the employee’s final pay is included to avoid an unlawful deduction under the Wages Act 1986, otherwise costs would have to be pursued through the County Court.

• The obligation to repay applies to both if employees leave within the specified period or fail to complete the course (for reasons other than those beyond their control e.g. there may need to be exceptions for redundancy, ill health etc.).

• There is acceptance by both parties that the formula for repayment constitutes a genuine pre-estimate of loss and is reasonable.

An example of such an arrangement is included in this pack.
NB. Whatever terms are included in the Contract of Employment it is imperative that a term relating to legal compliance is incorporated. If one is not included then the following term shall be adopted.

“The employee shall adhere to all current Policies and Procedures in respect of legal requirements of the business and shall keep abreast of any revision of instructions in this regard.”

Any change to the terms of the contract should, where possible, be with the agreement of the employees. A simple note to the employee showing the revision with a signed acceptance would suffice.


The stages of the Recruitment process shall be as follows:

- Produce Job Description and Person Specification
- Decide on the best method of recruitment
- Decide on the best method of job advertising
- Drafting the advertisement
- Short listing
With respect to Trading Standards issues the first step is critical and the following procedure shall be adopted.

Produce Job Description

It is important to take time to analyse the job and produce a specification, which covers what the job content is, in respect of work to be done, and the personal involvement of the employee, as well as the critical aspects of the employee’s performance, which will need to be considered by the prospective employee when considering their suitability.

Produce a Person Specification

This represents a breakdown of the ‘ideal’ candidate for the post, and can be broken down into:

a) Physical make-up e.g. dress, and speech.
b) Education attainment and general intelligence/skills.
c) Special skills/aptitudes e.g. interpersonal/telephone.
d) Interests.
e) Disposition e.g. attention to detail, ability to work to deadlines.
f) Circumstances e.g. out of hours working, offsite working.

The attributes can be categorised into essential or desirable and consideration must be given to what the organisation, the department and individual need.

Depending on the post of the applicant the attributes of the successful candidate will include aspects necessary to manage and carry out Trading Standards functions.

In respect of managers, the attributes under b) shall include as essential, a good level of education and as desirable a basic legal and/or management qualification. The attributes under e) shall include as essential the ability to adhere to company policy, carry out routine checks and undertake disciplinary actions.

In respect of other employees the attributes under e) shall include as essential, the ability to follow instructions as laid down in company procedures.

Carry out the Selection Interview

Within the interview the candidate shall be assessed on the essential and desirable attributes ascribed to the post within the Person Specification.


At least once a year all employees shall be given an appraisal of their performance.
The appraisal shall, among other things, establish:-

a) The performance, satisfactory or otherwise, of the employee in his/her respective post.
b) Training needs.
c) A plan of career development, improvements, rectification for the next period.
The appraisal shall be carried out by the line manager and the outcomes actioned as appropriate. A record of all appraisals and proposed action shall be retained on the employees personnel file.


Training shall be carried out both as induction training, when the employee is first appointed and ongoing training, where input is needed either to satisfy a knowledge/skills gap or as a refresher.

Induction Training

As part of the new employee’s introduction to the company a training course shall be programmed to ensure the new employee is aware of company policy on Trading Standards issues and their specific duties and responsibilities within the system.

On-going Training

Where due to a failure on an employee’s part or as a result of an appraisal it is apparent there is a knowledge/skills gap in respect of an operation critical to the legal integrity of the company then training shall be organised either on an individual or group basis. Where there is a significant change in the law or at least once per year refresher courses for all managerial staff shall be carried out and they will disseminate the necessary information to their subordinates.


All training shall be evaluated to assess its effectiveness.

It is vital that a record of all relevant training shall be recorded and maintained on the employee’s personnel file.


Health and Safety

Health and Safety

If you have more than four employees then you must have a Health & Safety Policy.

This Policy provides (1) evidence of the Company’s commitment to Health & Safety in the form of a policy statement (2) an outline of the responsibilities of individuals within the organisation and (3) the practical arrangements for implementing this policy.

You must also carry out Risk Assessments on all equipment processes and procedures together with the environment in which they are carried out. On completion any steps required to eliminate or reduce the risk must be undertaken and records kept.

A COSHH Assessment is also required on all substances and their use where they have the potential to cause harm and records kept.

Systems and Procedures must be put into place to investigate, evaluate, report, record and reduce the possibility of any accident, injury, dangerous occurrence or disease within the workplace.
Signs and Instructions must be provided to assist in the objectives.

Training must be given in the safe use and maintenance of equipment, procedures, including manual handling and other work practices and a record of the training kept.
Personal Protective Equipment must be provided and instructions given as to its use.
Fire Safety Inspection and a Fire Risk Assessment must be carried out and a record kept. Following from that assessment procedures and systems must be implemented and maintained to reduce the risk and provide a safe working environment.

It is essential that all procedures, assessments, systems, training and instructions are clearly recorded and have been communicated to all staff and people who they affect. The building, its structure and content needs to be inspected to ensure its continued safety and any repairs or alterations required must be carried out effectively.



Agency Agreements

Some businesses have chosen to use the facilities offered by advertising agencies as a means to get to the market. Having asked them to design and place the advertisement they are under the mistaken belief that their responsibilities and liabilities have been passed to the agency. Unless certain precautions have been taken this is not the case. All that has happened is that the agency has become jointly and severally liable with you.
How can you protect yourself?

If an error is compiled by the agency on one of your advertisements then the offence has occurred and you are already liable. If the error leading to the offence is not yours then if you have taken the following actions you will be in a position to seek to establish a statutory defence and avoid a prosecution.

You should immediately write to the advertising agency (you may choose to use the proforma in the Quality System Manual as a model) instructing them to comply with all the relevant provisions of the Advertising Regulations and to indemnify you in the event of any failure to the extent of any losses consequential to any breach. You must also include details of the relevant provisions of the regulations referred to above.

Lawgistics are happy to supply a copy for this use.

Web Sites

Web sites are a relatively new innovation but one that more and more dealerships are using. Previously vehicles were viewed by potential customers primarily within a local area. Vulnerability was local and usually dealt with by the local Trading Standards Office building and drawing upon a relationship built up over time. Now that you are on the web you are reaching customers worldwide but particularly nationwide and your advertisements and webs are being viewed by Trading Standards Offices all over the country. If they are wrong and an offence occurs then it occurs both where it was published (on your computer) and where it is read (anywhere in the country). ANY Trading Standards Officer can then institute proceedings without reference to the “Home Authority”.

Within the web there are two danger areas which need addressing:
1. The basic web design and development
2. Information that changes on a periodic basis.

1. Design of web site
The designing of a web site is invariably given to an IT expert and by definition they are not always aware of the legalities of the descriptions they apply.

In broad principal the rules that apply to the advertising, display, sale and credit facilities apply equally to the web site and all its various windows. The principles outlined earlier should be applied.

IT specialists should be instructed to obtain approval and written authorisation from the Director/Proprietor prior to going live. Any further amendments should follow a similar course.

2. Control of Information
As with all information relating to specific vehicles which may change on a regular basis there must be some system to ensure that the information and the descriptions applied are accurate. For all information relating to vehicles the following procedure should be adopted.

a) A list of the relevant vehicles and their description should be compiled by the Sales Manager.
b) It is the Sales Manager’s responsibility to ensure that each vehicles details and descriptions are checked and are accurate. This should be done by comparing the list to both the information held on file and the vehicle itself.
c) Once the list has been verified by the Manager it may be transferred to an IT operative for transcription onto the web site.
d) Once that transcription has taken place and the Manager notified accordingly then he shall cause a further check to be made to ensure that transcription is accurate and the list endorsed accordingly.

Media Advertising

No advertisement or editorial shall be placed by any person within the company unless specifically authorised to do so by the Directors, Partners, Proprietor or their delegate.
All advertising shall be approved by the company and shall comply with the company’s “Advertising and Promotional Guidelines”.

It is the Manager’s responsibility to ensure that all advertisements are checked prior to publication to ensure compliance and signed off by the Manager or his delegate.
It is the Manager’s responsibility to ensure that all staff are aware of the content of any advertisement and in particular the content and extent of the offer together with its period of availability.
A copy of all advertisements shall be kept on file at the dealership. Following the introduction of an advertisement the Manager will immediately check on site documentation to ensure any price reductions, special offers or promotions, free gifts or other offers are available and have been put into effect.

On conclusion of that promotion or offer the Manager is responsible for the removal of the said promotional literature, special offers, price indications, brochures and other details.
Where there is any doubt over the legality of any advertisements it shall be referred to Lawgistics.

On Site Advertising and Promotions

No advertisement or promotional material shall be placed in or throughout the dealership unless specifically authorised by the Directors, Partners, Proprietor or their delegate.
All promotions or advertising material shall be approved by the company before its use and shall comply with the company’s Advertising and Promotional Guidelines. It is the Manager’s responsibility to ensure that all competitions or fliers comply with the “Advertising and Promotional Guidelines”.

It is the Manager’s responsibility to ensure that at no time is any unauthorised advertisement, offer, or promotion on display.

Point of Sale Material

It is the Manager’s responsibility to ensure that all point of sale material is accurate and accurately describes the vehicle or goods to which it relates. In particular any vehicle description shall be checked against the vehicle to which it relates and no mileage is indicated unless there is clear evidence that it is correct.

No financial information shall be affixed to any vehicle unless it complies with the company’s “Advertising and Promotional Guidelines”.




The purchasing decision is a critical point in the business operation. Precautions and diligence in purchasing are vital to ensure compliance with the legislation.

New & Imported Vehicles

The following represent company policy and instructions, which are to be carried out in relation to the purchase of new and imported vehicles. They remain in force until or unless specific authorisation is given from the Directors/Partner or Proprietor to override them.

a) All vehicles will be examined on receipt and checked for conformity to specification, model description, and invoiced details. In addition it shall be inspected for any cosmetic or other unsatisfactory defects.

b) Where any deviation from that specification is noted or the manufacturer notifies of any change or change of specification that change shall be drawn to the attention of the manager who will ensure that all staff are aware of the variation or will, by means of a memorandum to staff, instruct them to advise all prospective customers of any difference that may have been expected from the reading of the manufacturers brochure.

c) Where a vehicle has been received in respect of a specific customer order then it shall be checked against that order.

d) Any vehicle varying from specification or being of unsatisfactory condition will be placed off sale for return to the supplier for rectification if appropriate

e) A record of any variance found shall be endorsed on the vehicles accompanying invoice or papers.
Used Vehicles

The following represent Company Policy and Instructions, which are to be carried out in respect of all used vehicles. They remain in force until or unless specific authorisation is given by the Directors/Partners or Proprietor to override them.

a) No vehicle shall be purchased without the Registration Document (V5), where applicable the MOT, a duly completed appraisal form together with a completed and signed purchase invoice.
Additional information such as the full vehicle history and any accompanying bills or invoices should be obtained wherever possible.

b) For every vehicle considered for purchase an appraisal form shall be completed and signed by the person compiling it. That person shall ensure its accuracy. All vehicles shall be checked against the V5 where available. Part of that check will include the engine and chassis number and a check to ensure the badging make, model or year is consistent with the vehicle’s documentation. Where the V5 is not available then the information shall be entered on the appraisal form and checked at the time of collection.

c) All vehicles shall be checked against the HPI register or similar. The report shall be filed in the vehicle file.

d) Where a part exchange vehicle is involved a purchase invoice must be completed. It is your responsibility to ensure that the invoice is fully completed and signed by the seller. You must check that the sellers name and address corresponds to other documents or correspondence in his possession. You must also ensure that the vehicle’s description, as entered on the invoice, is accurate before delivery of the replacement vehicle.

e) Any service history or other documentation shall be checked to ensure that it is not a forgery or contains anything inconsistent with other documentation already provided.

f) No vehicle shall be purchased from anyone other than the registered keeper except in the following circumstances:

i. from a trader or known trade source.
ii. from an approved auction.
iii. From a relative of the registered keeper where the registered keeper has deceased or that person has a letter of authorisation from the deceased’s executors or solicitor in dealing with the estate.
g) Where the company make payment for any vehicle that payment shall be by cheque made out to the registered keeper, save as excepted above, and the cheque sent to the address recorded in the V5.

h) It is the manager’s responsibility to ensure that all vehicles offered for sale have the relevant documentation available on the vehicle file. Any variation shall be reported immediately and remedial action taken to secure the missing information.

Other Goods For Resale

The following represent Company Policy and Instructions, which are carried out in respect of all goods purchased for resale to customers. They remain in force until or unless specific authorisation is given by the Directors/Partners or Proprietor to override them.

a) Goods shall only be purchased from an approved supplier and be accompanied by a warranty.

b) Wherever practical the goods shall be checked on receipt to ensure that they conform to their description, any description in accompanying literature or packaging and to any specification laid down by the manufacturer. They should also be checked to ensure that they are of satisfactory quality.

c) Any non-conformity shall be marked on the invoice and returned to the supplier.


Vehicle Roadworthiness

Vehicle Roadworthiness

It is Company Policy not to sell any vehicle to a customer, which is in an Unroadworthy condition. All vehicles for eventual sale to a prospective customer will be inspected and appraised by the Director/Partner/Proprietor or their nominee prior to the vehicle being offered for sale and it will not be supplied for sale or used on the road unless it is in a roadworthy condition and fit for the purpose of safely being driven on the highway.

If a vehicle is to be taken for a test-drive along the highway every precaution must be taken to ensure that it is in a roadworthy condition. Tyres and braking systems should be checked and where necessary changed or adjusted prior to the vehicle being offered for sale.

Where any vehicle is purchased, by part exchange or otherwise, and it is clear that it fails to meet the standards set out above then the following action should be taken:

a) The vehicle will, wherever practical, be set apart from the other vehicles whilst its disposal in the trade is arranged. It must not, under any circumstances, be sold or advertised for sale to a member of the public.

b) When such a vehicle is disposed the Lawgistics Unroadworthy Vehicle Documentation shall be used and completed in full with the necessary signatures obtained.

c) Under NO circumstances shall a test-drive be given/allowed on the highway.

d) The vehicle must be transported from the premises and that is the responsibility of the purchaser.

Valeting and Display

Valeting and Display

The display of vehicles on a site is the first point of contact with the customers at large and it is also one of the most vulnerable times for the dealer. Each vehicle describes itself and even when the site is closed any misdescription on the vehicle is potential disaster waiting to happen.

These instructions are therefore key to the legal well-being of the company and must be followed in every occasion. They may only be varied by the express instruction of the Directors/Partners or Proprietor.

a) It is the responsibility of the person taking in a part exchange or purchasing a vehicle to ensure that all the badging, engine capacity and description, vehicle features and accessories, and any other description corresponds with the V5 and any description given. In the event of any non-compliance action shall be taken to rectify the non-conformity PRIOR to it being offered for sale.

b) It is the responsibility of ALL employees to be alert to any apparent nonconformity and to report the same immediately it is noticed.

c) It is the responsibility of the manager to ensure that the relevant staff place an approved disclaimer on the vehicle’s dashboard over or in close proximity to the odometer reading prior to it being placed on display or being offered for sale and that a relevant entry be made in the mileage disclaimer register.

d) It is the responsibility of all staff to ensure that an approved disclaimer is placed over or in close proximity to the odometer reading BEFORE showing the vehicle to a customer or placing it on display.

e) If a disclaimer is not so affixed then any person identifying this noncompliance shall immediately apply one and make an entry in the mileage disclaimer register to that effect.

f) The ONLY exception to the above is where the vehicle has had its previous history checked with all previous owners and the written record confirms that it is correct. In such circumstances the manager may remove the disclaimer and advise all staff accordingly. No other person is authorised to remove the disclaimer, which should be on the vehicle at all times until supplied to a customer. Where a disclaimer is so removed an endorsement to that effect shall be made in the mileage disclaimer register.

g) It is the manager’s responsibility to ensure that a mileage disclaimer register is set up and maintained, detailing the affixing and/or removal of mileage disclaimers on vehicles offered for sale.

h) It is the manager’s responsibility to ensure that there is sufficient supply of the approved disclaimer available for use.

i) It is the manager’s responsibility to ensure that an approved wall mileage disclaimer is prominently displayed in the area where any customer transaction may be made.

j) No written description shall be applied to a vehicle by means of any in-house advertisement, windscreen sticker, point of sale material or by any other means unless it has been approved by the manager and any description or statement has been checked and/or supported by written factual information.

k) The manager shall ensure that all vehicles have their selling price clearly displayed and where there has been a price reduction that previous price had been offered for 28 consecutive days in the previous six months.

l) All new vehicles shall have the statutory fuel consumption figures conspicuously displayed on the vehicle or displayed in close proximity to it.

m) All vehicles shall be checked against company records to see if any information is held that would verify or otherwise any description applied to them. In particular workshop records shall be checked to ensure that the mileage displayed is consistent with the records kept and no new odometer has been fitted.

Mileage Checks

Mileage Checks

Every vehicle intended for retail sale shall immediately upon purchase, have an enquiry into the vehicle’s history initiated.

Whilst this check is being carried out a disclaimer shall, at all times, be placed on the vehicle dashboard obscuring or in close proximity to the mileage reading.

The person affixing a mileage disclaimer shall endorse the mileage disclaimer register to that effect.

Where and unless the enquiry confirms the accuracy of the mileage the disclaimer shall remain affixed as detailed above.
Where an enquiry shows that the mileage is incorrect and the vehicle is still in stock then the disclaimer shall be replaced by one, which indicates that the mileage is incorrect and the information received should be made available to prospective purchasers.

When an enquiry shows that the mileage is incorrect but the vehicle has already been sold then it is left to the discretion of the manager as to the action to be taken. If the company procedures have been followed then the mileage indicator will have been negated by the disclaimer and no offence will have been committed. Equally as there has been no description there can be no misdescription and the customer cannot reject the vehicle.

Test Drives

Test Drives

In order to meet the statutory requirements and liabilities arising from a test drive the following procedures shall be followed on all occasions:

a) All employees will provide a copy of their current driving licence to the Directors, Partners or Proprietor and notify them immediately of any material change and in particular any endorsements received.

b) A test drive certificate shall be completed by the person accompanying the customer on a test drive and will be signed both by the salesman and the customer.

c) The customer must be asked for his driving licence and if he is unable to produce it then must certify that it is full, current and covers the category of the vehicle he wishes to test drive.

d) If any answer to the questions in the test drive form is NO or the customer is under 18 then reference must be made to the manager who will decide on the suitability of a test drive.

e) ALL test drives must be accompanied by a salesman and will be along a predetermined route.

f) All records shall be kept on file for 3 years.


Sales Procedures

Sales Procedures

It is very common to find that an organisation takes precautions in so far as the structure and systems are concerned only to fall down on the Customer/Salesperson interface.

A company is only as strong as its weakest link and the weakest link is the salesperson, under pressure to sell, who embellishes the truth or equally as dangerous, guesses the information that the customer seeks.

The ONLY way to minimise this risk is to:

1. Ensure that they have necessary training to understand their and the company’s liabilities, duties and obligations.
2. Instruct them on company policy

3. Monitor their performance to ensure compliance.

Telephone Communications

Telephone Communications

When the telephone rings there are two things that you do not know.

a) Who is calling – it could be a prospective customer OR
- It could be a Trading Standards Officer checking on what descriptions are being given.


b) What vehicle they are calling on

- as there are likely to have a number in stock act professionally – DO NOT GUESS – take their name and number – get the vehicle file and call them back.
- Do not rely on your memory – read from the file and only give information that is supported by other documentation.

If the enquirer asks about a vehicle mileage remember that you “speak as an expert” and if you say “the recorded mileage is 34,000” you are in effect saying that you guarantee the mileage at 34,000. The correct answer would be “The previous customer has warranted it to us at 34,000 we have no reason to doubt this but we are in the process of checking it out. You should disregard it and judge the vehicle on its condition”.

Face-to-Face Communication

Face-to-Face Communication

In face-to-face communications there are always two problem areas.

• What is said by the Salesperson
• What is heard by the prospective customer.

If you get the first right it reduces the risk of the second.

You must always be honest and truthful and provide the information to the prospective customer as supported fact and not inspired guesswork. Any description you give or imply is capable of giving rise to a prosecution if it is wrong. You must check all descriptions for their accuracy before using them with a customer.

Mileage is a particular problem and if you indicate that the mileage is correct then that will override the precautions already taken with the disclaimer sticker and leave you and the company vulnerable.

Beware also about stating that the vehicle has not sustained accident damage unless you can be sure that it is true. You can quote a third party, i.e. HPI, provided you make it clear what is the source of that information.

Sales Documentation

Sales Documentation

The sales documentation is the basis of the contract with the customer and contains all the terms and conditions upon which each party may rely.

Whilst it is possible to have a verbal contract this is very difficult to prove and if the customer wants out it is very difficult to prevent.
It is essential then that all documentation including the order form, invoice, warranty, finance documentation and hand over forms are fully completed and signed. It is this that you will rely on if something goes wrong.

To ensure that you are in a stable contractual position the following procedures should be adhered to at all times:

i. Only company documentation should be used. Do not give written finance quotes on backs of business cards, receipts or scraps of paper.

ii. Complete all documentation in full and then obtain a signature from the customer and company representative. This shows tacit agreement with the terms and conditions of the contract.

iii. All documentation MUST be completed on trade premises. The customer is not to be permitted to take away documentation for signature. It is an offence if finance documents are signed off trade premises without the appropriate licence and the agreement becomes unenforceable without a Court Order.

iv. Terms as “sold as seen” and “no warranty given or implied” are illegal terms when used with a prospective customer. They are ONLY permitted in genuine trade sales.

v. The Unfair Contract Terms Regulations prohibits small print that is illegible, unintelligible or written in legal ease. Any terms that are restrictive or one-sided will be deemed unfair. The Office of Fair trading may also obtain an injunction against you to prevent you using the documentation. DO NOT insert unfair or overtly restrictive clauses into your documentation. If drawn to the Trading Standards attention you could find that your Consumer Credit
Licence is at risk.

Hand Over Procedures

Hand Over Procedures

It is essential that you have a clear and structural Hand Over Procedure. The purpose of the procedure is to ensure that all the terms and conditions are met, the part exchange vehicle has been properly described, all the documentation completed and signed, and the customer has been given all the necessary information and is fully conversant with the vehicle’s controls and performance prior to taking it onto the highway. The following procedure shall be adhered to at all times:

1. The customer must provide the V5 and other service history and supporting documentation, if any, prior to hand over.

2. These documents shall be checked against the vehicle to ensure that it has been properly described. In particular check the number of owners, date of registration and ensure that the customer verifies the mileage whilst in his possession.

3. A final check shall be made on all the company’s documentation to ensure that it is completed in full, the descriptions are accurate and can be supported and that all the documentation has been signed and dated. All necessary funding should be cleared at this point.

4. The vehicle’s controls and performance characteristics must be shown to the customer and any special instructions e.g. (unleaded fuel) be provided. A handbook on the vehicle, if available should be supplied with the vehicle.

5. Any discrepancies found or queries raised shall immediately be drawn to the attention of the manager who will rectify the situation.


Visits by Trading Standards Officers and Other Enforcement Agencies

Visits by Trading Standards Officers and Other Enforcement Agencies

The company will be visited, from time to time, by a number of officials from enforcement agencies. These visits, where announced, will either be merely routine or alternatively investigative. On either occasion the following approach should be adopted:
1. When they have announced who they are immediately invite them into a suitable office or area away from the sales area. Be polite and courteous. If appropriate offer them refreshment and then refer them to the appropriate manager. Do Not enter into meaningful discussion or attempt to answer their questions. It is NOT your job and you CANNOT speak on behalf of the company.

2. The manager shall satisfy himself of the officer’s credentials and then seek to provide every assistance where appropriate.

3. If the officer informs you that he suspects an offence may have been committed then he is entitled to examine and seize certain documents which he may believe are required as evidence in any proceedings. Refer to your Lawgistics Trading Standards Law Manual for trading officers powers or ring Lawgistics on 01480 455500. Remember that to refuse him access to the documents he has power to inspect may leave you open to the allegations of obstruction.

You MUST make a note of the officer’s name and contact point together with details of the alleged offence. Ask him to put in writing the exact details/documentation that he requires.

4. If he further advises that an offence has been committed and wants to carry out an interview with a representative of the company then take details of the alleged offence and immediately refer it to the appropriate Manager. Do NOT enter into dialogue yourself. You are not authorised to speak on behalf of the company. If in doubt, ring Lawgistics. Under no circumstances should an interview be carried out immediately. These situations are always complex and sufficient time is needed to investigate and to obtain the relevant documentation.

Employee Liability

Employee Liability

Where it is alleged that an offence has been committed then it is open to the Enforcement Agency to institute proceedings against the Company, Directors, Partners, Proprietor, Manager, Sales person or other employee. They may institute proceedings against each or any that they think are responsible for the offence.

This means that if you misdescribe a vehicle or fail to follow Company Policy then you, as well as the Company are jointly – severally liable and you may individually be prosecuted.

In addition if the offence is due solely to your failure to follow Company Policy and Instructions then you, instead of the Company, may be liable to prosecution. Naturally if the Company has a statutory defence and you have followed Company procedures, but still an offence has occurred, you also are entitled to rely on that defence.


Customer Feedback / Complaints Procedure

Customer Feedback / Complaints Procedure

It is inevitable that with the sale of technologically complex vehicle that there will be some problems that will arise. Be aware though that under OFT Guidelines a failure to deal with customer complaints properly will put at risk your Consumer Credit Licence. It is essential therefore that you adopt a Customer Complaints Policy to deal with any problem that may arise. The following is a template for you to use:

Step 1 Make the customers aware of the person to whom complaints should be directed.
Step 2 Identify the nature and detail of the problem. Sit the customer down and listen to the exact nature and extent of their complaint. Complaints will fall into one of several categories listed below:

a) Broken promise
The customer feels that they have been promised something to which they are entitled but they have been let down. Identify what that expectation is and if the complaint is justified then seek to resolve it.

b) Quality issues
These are generally warranty claims but if a warranty is inappropriate then remember they may be able to rely on their statutory rights. See Consumer Law Manual for guidance or ring Lawgistics. Identify the issue – determine whether it is a fault for which you are liable or whether it is a problem caused by neglect or misuse and deal with it accordingly.

c) Description of product or services
These are particularly dangerous complaints, if justified these may result in proceedings being instituted. Identify the description and determine whether or not it is justified. If it is, then contact Lawgistics immediately and seek to rectify the problem.

d) Price discrepancy
These are potentially dangerous complaints and can lead to a Trading Standards enquiry. If a mistake on price has been made then a refund should be made immediately. If in doubt contact Lawgistics.

Step 3 If the problem is not capable of immediate resolution ask the customer to put their complaint in writing.

Step 4 Ensure that the customer is kept informed as to what is happening with their complaint.

Step 5 If you cannot resolve the matter then refer it to Lawgistics for their help. If it is to be referred to Lawgistics then tell the customer. They then know what to expect and within a defined timescale. Nothing causes more conflict than keeping the customer in the dark.

Be polite and courteous. If you put their back up then you may become entrenched and the claim may then escalate culminating in court action.

Instructions to Sales Staff

Instructions to Sales Staff

The following are the instructions of the Company that must be followed at all times:
1. It is the duty and responsibility of the Company to ensure that all information provided to prospective purchasers is honest, truthful and accurate in every respect.

In order that the Company may meet its obligations it is essential that ALL staff have read, understood and follow the policy and procedures of the Company and comply in every respect with its written instructions.
It is your responsibility to ensure that you understand what is required of you and that you follow the instructions given at all times.

2. When speaking with prospective customers, whether by telephone or face to face, all staff must ensure that all descriptions given, whether verbal or written, are accurate, truthful and based on supported fact.

Mileage presents a particular problem area and no description, opinion or estimate should be given as to the accuracy of any recorded mileage. Equally no description, opinion or estimate should be given on the previous use, ownership, performance, accessory, fuel consumption, suitability for a particular purpose or any other item that is not contained and supported in the vehicle file.

3. It is your responsibility to check the vehicle file and not to apply any description that is not contained and supported within that file. Never Guess – Always Check – If in doubt ask the manager before imparting the information.

Instructions to Managers

Instructions to Managers

1. It is the manager’s responsibility to implement and apply the Company Policies, Procedures and Instructions in full and at all times. They are also responsible for updating and implementing any change as directed by the Directors/Partners or Proprietor.

2. It is the manager’s responsibility to ensure that all staff under his control are aware of, understand and apply the Company’s Policy, Procedure and Instructions in full and at all times and that they are updated and available for staff use.

3. It is the manager’s responsibility to ensure that

i. There are adequate supplies of company documentation available for use, and that all staff are completing the documentation in full on every occasion and that each document, where required, is signed by the customer/salesman.

ii. The customer receives copies of the relevant signed contract documentation.

iii. The Company Policies and Procedures in respect of mileage disclaimers and mileage checks are fully implemented on all vehicles on display.

iv. All staff, current and future, have or will read, the Lawgistics Trading Standards and Consumer Law Manuals, Company Policy, Procedures and Instructions and have understood and endorsed to confirm the same.

v. The Company forms and records required by the Directors, Partner or Proprietor shall be maintained in full and kept on the Company premises for the requisite period.

vi. Every vehicle is checked to ensure that its description that is applied both on the vehicle, point of sale material, advertisement, documentation, web site, vehicle file and any stock list is accurate and supported and in compliance with Company Policy, Procedures and Instructions. Such checks shall include a check on the price and application of an approved mileage disclaimer positioned in close proximity to the mileage reading.

vii. A mileage disclaimer register is set up and maintained detailing the affixing and/or removal of a mileage disclaimer on vehicles offered for sale.

Published: 02 Sep 2011


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