When the Coronavirus caused the overnight shut-down of car showrooms, we put together some guidance on how to conduct sales “by distance”. In view of some of the common questions we subsequently received and in the light of the most recent Government announcements, we’ve decided to update and expand our advice, with slight modifications to the suggested Cancellation Notice.
Please read it all very carefully and e-mail us with any questions if you require further clarification.
The law surrounding distance related sales has an onerous title “The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013” – but, in essence, it allows consumers (NOT other trade buyers) to cancel the contract within 14 days without giving any reason.
It is important to realise that the 14 day cancellation period applies when there has been no face to face contact on your trade premises OR if you are given money to conclude the sale at the consumer’s house. We must stress also that it is 14 days and NOT seven days that some car dealers who deliver are saying. We won’t mention any names – but it rhymes with “CarWho”! Indeed, Trading Standards have confirmed the accuracy of our information in that regard.
In the past where cars were delivered to consumers, there was a solid argument to say that because it was not an “organised distance selling scheme” as is required by the Regulations, and only a “one off”, there was no need to give the cancellation notice.
Now, however, where cars can only be sold by this method because the lockdown prevents car showrooms from opening, there is little option other than to assume that those who deliver cars during the emergency period are doing so under an organised distance selling scheme. Temporary may be, but certainly now organised.
We need to explain the difference between a “distance” sale and a contract that is concluded away from your (the seller’s) trade premises.
A distance sale broadly applies when all the money due under the contract has been paid in advance – usually online – pre delivery. Where, say, a deposit is paid with the remainder to be paid on delivery, this is not a distance sale as such, but a contract that is being concluded at the consumer’s home, not at your trade premises. The good thing is, in many ways, is that the right to cancel is exactly the same as a distance sale and so the same notice can be used for either.
Do note however, that it is also the writer’s opinion that no cancellation notice ought to be given under the 2013 Regulations if the vehicle is being delivered under a finance agreement where that the consumer has entered into a hire purchase agreement with a finance company). This is because the trader is selling the car to the finance company and not to the consumer. The finance company have no cancellation rights as they are not a consumer. And when they supply the car via the credit agreement they are not selling it to a consumer, they are simply supplying under a hire-purchase agreement. Therefore there is nothing being sold to a consumer.
We suggest the following cancellation notice is drawn to the attention of your consumer buyer in advance – as well as at the time of delivery. Ideally you should get the consumer to acknowledge receipt of the notice and have them to also acknowledge by e-mail or by signature – that he/she knows how it operates. This notice should be attached to your contract to give to the consumer as well as on your website.
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TEMPLATE
Cancellation Notice
Ordinarily we do not run an organised distance selling scheme or deliver cars to consumers in order to complete a contract.
However, due to the coronavirus outbreak we need to support our valued customers by delivering your vehicle to your home.
If you have ordered and taken delivery of your vehicle without visiting our showroom and you are not buying the car in the course of your trade or business or obtaining it on hire-purchase finance,, the following cancellation clause applies:
“You have 14 days to get to know your new vehicle and to make sure it suits you. If you change your mind just let us know in writing by post [insert address] or in email to [insert email address] and to reach us by 6pm on the 14th day following delivery and we will come and collect the vehicle for a refund. We cannot accept a return of the car if it has been damaged, modified or altered from the condition it was delivered in.
An excess mileage charge of £1 per mile for any mileage over 150 miles in those 14 days will apply. If you do change your mind you cannot use the car once you have notified us – but you must still tax and insure the vehicle until it is collected.
This cancellation (change of mind) clause does not affect any separate rights given to you in The Consumer Rights Act 2015 or the Sale of Goods Act 1979 (as amended)”.
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Finally, the 150 mile usage and excess mileage charge are not mandatory but advised – to prevent (once lockdown is lifted or eased) someone taking the car on a 2 week trip around Europe, adding 2000 miles to the clock and then demanding a full refund for cancellation!
