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Block exemption to stay until 2013?
publication date: Dec 22, 2009
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author/source: Robin Roberts
The OFT has published four research reports
undertaken as part of its market study into the sale of second-hand
cars, which exceeded £35 Billion in 2008.
These comprise a survey of second-hand car buyers, second-hand car
dealers, UK local authority Trading Standards Services and the results
of a mystery shopping exercise. | | Also as part of the second hand car market study, the
OFT is today consulting on draft guidance that sets out the legal
obligations of second hand car dealers under two key pieces of consumer
law: the Consumer Protection from Unfair Trading Regulations 2008 and
the Sale of Goods Act 1979. | The OFT launched its market study in May 2009 following
concerns about the large number of consumer complaints relating to
second hand car sales.
Last year, the OFT-managed advice service
Consumer Direct received 68,000 complaints about issues with second
hand car sales. The purpose of the market study is to understand the
causes of such a high level of consumer complaints and to consider
whether existing consumer protection legislation is sufficient and
effective.
Heather Clayton, OFT Senior Director of Infrastructure, said, 'The
second hand car market has consistently attracted a high number of
consumer complaints. Our research throws light on the specific problems
that consumers experience so remedies and, where appropriate, consumer
enforcement, can be targeted. Our guidance on relevant legal
obligations, out for consultation today, will assist both the industry
and our Trading Standards enforcement partners.'
The OFT intends to publish the full market study report in early 2010. | | SMMT has welcomed the European Commission’s
consultation on the future legal framework for the sale of vehicles and
aftersales services following the expiry of the current Block Exemption
Regulation in May 2010.
The consultation recommends that the current regulation for the
sale of vehicles be extended until 2013, recognising the high level of
competition in the motor industry. For the aftermarket, the Commission
proposes to adopt sector specific rules from May 2010.
“The Commission’s statement recognises the importance of a smooth
transition of the current regulation and a welcome desire to find the
optimum solution for the aftermarket,” said Paul Everitt, SMMT chief
executive. “There is intense competition in all sectors of the motor
industry and it is important that any changes to the regime provide
reassurance and stability, particularly during these early stages of
economic recovery.” |
The main survey of second-hand car buyers purchasing from dealers and auctions found that:
• Almost a fifth (19 per cent) of those buying a second-hand car had experienced problems with it after the sale.
• Most problems arose within three months of purchase (86 per cent).
• Less than half of those who made contact with the dealer about the problem said it was completely rectified (47 per cent).
• Nearly thirty per cent said the problem had not been rectified at all
by the dealer. Consumers buying from independent dealers were more
likely to believe that the problem had not been rectified at all
compared to consumers buying from franchised dealers.
• Among those who paid to resolve the problem the average cost was
£465. The average cost was significantly higher if the car had been
bought at auction (£752).
The mystery shop survey of used car dealers found that over one quarter
(27 per cent) of shoppers felt the information they received about the
target vehicle and services available at the dealership was
'insufficient' or 'extremely insufficient'.
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