OFT Guidance for second hand car dealers

legal updates

We believe the publishing of this new guidance will turbo charge Trading Standards Departments into enforcement.

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The OFT has published guidance on practical interpretation of:

  1. The Consumer Protection from Unfair Trading Regulations 2008 (CPR).  These are the new all embracing regulations which replace several earlier pieces of legislation including the Trade Descriptions Act.  They give a broad ban on unfair commercial practices towards consumers.
  2. The Sale of Goods Act 1979 (SOGA) – satisfactory qualtiy, fitness for purpose, descriptions and remedies for consumers when things go wrong.

We believe the publishing of this new guidance will turbo charge Trading Standards Departments into enforcement.  The CPR regulations have been difficult to interpret for Trading Standards Officers, let alone motor dealers.  Now there is flesh on the bones which the Trading Standards Officer will use to instantly check whether the motor dealer is complying or not.

We strongly recommend you read the guidance which is available at www.oft.gov.uk/shared_oft/reports/676408/oft1241.pdf.

Over the next few months we will include some items as food for thought – prepare to be surprised!

The broad rules under CPR set out the flavour of the new legislation in regard to unfair business practices:

  1. Giving false or deceptive information to consumers including advertisements, verbally or paperwork.
  2. Giving insufficient information eg failing to provide on MOT advisory note, withholding service history.
  3. Acting aggressively.
  4. Failing to act in accordance with reasonable expectations of acceptable trading practice (honest market practice good faith).
  5. The CPR also contains bans on 31 specific practices outright.

A practice is unfair under the first four rules above if it causes, or is likely to cause, the average consumer to take a difficult decision eg viewing or buying a vehicle when they wouldn’t have otherwise done so, buying the car at a higher price or disadvantageous terms when they wouldn’t have otherwise done so and not pursuing a legitimate complaint when they would otherwise have done so. An unfair practice can occur trade to trade if it could potentially affect a later consumer sale, eg selling a clocked car at auction. The guidance sets out various practical steps to help comply with CPR.

  • These include steps under
  • Pre sales checks
  • Checking mechanical condition
  • Vehicles under preparation
  • Providing information prior to sale
  • Warranties/Guarantees
  • After Sales Service

As an example, as part of pre sales checks the guidance requires you to carry out a mileage check and you should not rely on a mileage disclaimer as a substitute for carrying out reasonable checks.

We will address more points in future bulletins.

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