On Friday (19th December) the Office of Fair Trading published four reports detailing their findings from research into second-hand car sales. The study involved surveys of second-hand car buyers, second-hand car dealers, local Trading Standards bodies, and a mystery shopping exercise.
Background
We probably don't need to tell you that the second-hand car industry is huge. It is estimated that sales in the UK last year totalled around £35 billion*. This market study was launched by the OFT in May 2009, triggered by the stack of consumer-complaints regarding second-hand car sales: OFT-managed advice service Consumer Direct received 68,000 last year. So the study was launched to help understand what was causing complaints, and to identify whether existing consumer protection legislation is working.
Main findings
The principal conclusions drawn from the main survey of second-hand buyers purchasing from car dealers and auctions are as follows:
* Almost a fifth (19 per cent) of second-hand car buyers had experienced problems with it after the sale. This probably comes as no surprise.
* However, a whopping great 86 per cent of these problems arose within just three months of purchase.
* Only 47 per cent of those who contacted the dealer about the problem said that it was completely rectified.
* Nearly thirty per cent said the problem had not been rectified in the least by the dealer. Those who bought from independent dealers were more likely to believe that the problem had not been rectified at all compared to consumers buying from franchised dealers.
* The average cost among those who paid to resolve the problem was £465. With an average cost of £752, it was significantly higher for consumers who bought their car at auction.
Mystery shopper findings
The most worrying finding from the mystery shop survey of used car dealers concerned the information about the car and services available. Over a quarter (27 per cent) of shoppers felt that the information available at the dealership was ‘insufficient' or ‘extremely insufficient'.
What next?
The OFT has been consulting on draft guidance intended to set out the legal obligations of second-hand dealers. They have been referring to the Consumer Protection from Unfair Trading Regulations 2008 and the Sale of Goods Act 1979.
In addition, the OFT intends to publish the full market study report early next year.
According to Heather Clayton, OFT Senior Director of Infrastructure: "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."
Author Resource:-
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