We have heard about a few cases recently where dealers have sold a vehicle under a Sale or Return agreement and then tried to deny the consumer any rights by claiming it was a private sale.
To be clear, a car dealer cannot legally advertise and facilitate the sale of a vehicle under a Sale or Return arrangement and claim it to be a private sale by the vehicle owner, unless it has been made abundantly clear to the buyer that it is a private sale and that the dealer’s role is that of an agent only.
Without clear evidence that the buyer was told at every stage, particularly before the contract was made, that the seller was a private individual and the dealer was only an agent, a court is likely to require the dealer to afford the buyer their Consumer Rights Act 2015 (CRA 2015) rights. For clarity, payment made directly by the buyer to the private seller will not, by itself, remove CRA 2015 entitlements unless there is a transparent evidential trail from the advert onwards.
Not only that, but not making it clear the sale is a private sale will be a contravention of the provisions of the Digital Markets, Competition and Consumers Act 2024 (DMCCA 2024), which prohibits unfair commercial practices, including misleading actions and omissions.
Under DMCCA 2024, a ‘commercial practice’ includes acts or omissions by a trader relating to the promotion or supply of products to consumers. Misleading actions or omissions that deceive, or are likely to deceive, consumers and cause them to make transactional decisions they would not otherwise make are prohibited. Specifically, falsely claiming or creating the impression that the trader is not acting for purposes related to their business is a banned practice under Schedule 20, paragraph 25 of the DMCCA 2024.
Most Sale or Return arrangements work exactly as intended: the dealer takes possession and agrees to sell the vehicle on set terms. If it does not sell, the owner takes it back.
In this traditional Sale or Return scenario, title passes to the dealer at the point of sale, and in turn passes to the buyer. The buyer is then entitled to their CRA 2015 rights against the selling dealer, who, of course, takes a fair commission.
We strongly advise any dealer considering the denial of consumers’ legal rights to make it clear, from the outset, in the advert and at every point thereafter, that any sale will be a private sale and that the dealer acts only as agent. Otherwise, you risk falling foul of the DMCCA 2024. Dealers operating genuine Sale or Return sales should simply keep doing things properly.
If you sell vehicles on a Sale or Return basis and want your adverts and paperwork to be watertight, our Lawgistics legal team can review your templates or assist on specific cases. Call the helpline or ask about our casework service.
What most people don’t know is that talent development doesn’t have to be complicated, high risk or expensive. Once they integrate key development stages, the results can be remarkable. Empower your team. Lead your industry. We’re your strategic learning partner, driving performance by moving skills forward.
