Doing battle with the DVLA reveals an elephant in the room…

legal_updates

It can take up to six weeks for a V5 to be processed by the DVLA, during which time the car cannot be sold as it cannot be taxed.

Author: Howard Tilney
Published:
Reading time: 2 minutes

This article is 4 years old.

Read our disclaimer keyboard_arrow_down

This website content is intended as a general guide to law as it applies to the motor trade. Lawgistics has taken every effort to ensure that the contents are as accurate and up to date as at the date of first publication.

The laws and opinions expressed within this website may be varied as the law develops. As such we cannot accept liability for or the consequence of, any change of law, or official guidelines since publication or any misuse of the information provided.

The opinions in this website are based upon the experience of the authors and it must be recognised that only the courts and recognised tribunals can interpret the law with authority.

Examples given within the website are based on the experience of the authors and centre upon issues that commonly give rise to disputes. Each situation in practice will be different and may comprise several points commented upon.

If you have any doubt about the correct legal position you should seek further legal advice from Lawgistics or a suitably qualified solicitor. We cannot accept liability for your failure to take professional advice where it should reasonably be sought by a prudent person.

All characters are fictitious and should not be taken as referring to any person living or dead.

Use of this website shall be considered acceptance of the terms of the disclaimer presented above.

During a perennial dispute over the use of trade plates our contributor has recently received yet another missive from the DVLA but on this occasion it contained a piece of information that despite his many years in the Trade, he was entirely unaware of.

After speaking to several other motor traders it became apparent that he was not the only one that was blissfully unaware of this particular piece of secondary legislation.

Under The Road Vehicles (Registration and Licencing) Regulations 2002, a dealer who has held a used car in stock for more than three months (not unusual) aka “the three months period of grace”, is required to register the vehicle in its name (PART IV, Regulation 24).

Consequently, a trader is not permitted to use trade plates on such vehicle after registration. Instead, the trader must tax the vehicle if it is to go on test drives and the like.

Last year over 8 million used cars changed hands and even if but a small fraction of those were overage stock held on garage forecourts, then that represents a potentially enormous number of vehicles, which might be affected by this regulation.

Our contributor highlights some serious implications to this piece of secondary legislation.

First, it can take up to six weeks for a V5 to be processed by the DVLA, during which time the car cannot be sold as it cannot be taxed. Effectively, it becomes dead stock.

Secondly, there is a trend for insurance companies to no longer automatically include “drive other car cover” in their policies. This means that a prospective customer would no longer be able to test-drive a car, as it would not be insured; and in any event such cover is intended to be used in an emergency only and not for those just popping out for a spin.

In the case of drivers under 25, a great number of which are in the used car market, it is pretty much a given that such cover is excluded; ergo, the car becomes virtually unsellable, unless the dealer is prepared to flout the law.

Lawgistics are most grateful for the valued contribution of Douglas Munday of Central Motor Company, Kettering on this subject and welcome further contributions on this and any other issues affecting traders.

Howard Tilney

Legal Advisor

Read more by this author

Getting in touch

You can contact us via the form or you can call us on 01480 455500.