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OFT launches market study into the sale of second-hand cars
51/09 7 May 2009
The OFT has today launched a short market study into the sale of second-hand cars.
The study follows concerns about the large number of consumer complaints relating about the sector. Last year, more than 68,000 consumers complained to Consumer Direct about issues with second-hand car sales. Concerns around defective vehicles, services and potentially misleading selling are consistently among the top complaints to the government-funded advice service.
The second-hand car market is large, with sales of approximately £35 billion in 2008, and the level of harm appears substantial: the financial cost of car clocking alone is estimated to be £100 million per annum.
The purpose of the study is to understand the causes of such high levels of consumer complaints and to consider whether existing consumer protection legislation is sufficient and effective in this sector.
The study will focus on sales by dealers rather than private sales between individuals, but the findings will aim to provide clarity across the wider second-hand car market. The OFT hopes to work closely with the second-hand car industry, local authority Trading Standards Services, consumer bodies and other interested parties.
John Fingleton, OFT Chief Executive, said:
'Buying a second-hand car is a major and potentially difficult purchase, given the fact that many consumers lack the necessary experience or knowledge to make an informed buying decision. We aim, particularly given the current financial climate, to look at the entire process for consumers when buying a second-hand car and whether existing regulation delivers sufficient robustness, confidence and clarity for both the customer and car dealer.'
The OFT expects to complete the work by the end of the year. The OFT will be contacting key parties directly, other interested parties can submit written views by 5 June to second-handcars@oft.gsi.gov.uk. NOTES
1. Mintel estimates the value of second-hand cars sold in 2008 was around £35 billion.
2. HPI, the independent information source for the motor industry, estimates that the financial cost of car clocking - turning back the mileage reading on a vehicle, is around £100million per year.
3. Consumer Direct is a telephone and online consumer advice service funded by government and managed by the Office of Fair Trading. It operates in partnership with local authority Trading Standards Services to offer consumers clear, practical and impartial advice and information.
4. The OFT will work closely with local authority Trading Standards Services which have extensive experience in tackling issues related to second-hand car complaints. The OFT will contact trade bodies, dealerships, consumer groups and other organisations associated with the sector. The OFT also aims to contact consumers who have complained about the sector as well as government departments.
5. OFT market studies are carried out under section 5 of the Enterprise Act 2002 (EA02) which allows a market-wide consideration of both competition and consumer issues.
6. The second-hand car sector has featured consistently as a main consumer complaint on Consumer Direct for the past three years. The OFT has previously taken action to address concerns in the second-hand car market. In October 1997 the OFT published Selling Second-Hand Cars, which made a number of recommendations. See Selling Second-Hand Cars. In relation to franchised dealers in 2004, the OFT secured agreement from motor manufacturers that warranties on newly-bought cars would not be invalidated by maintenance work done outside of the franchise network as long as it was conducted according to the motor manufacturer's standards. See press release 85/04.
7. In May 2008 the Consumer Protection From Unfair Trading Regulations (CPRs) came into effect. The CPRs require traders including second-hand car dealers to show professional diligence when dealing with consumers.
8. The OFT is unable to provide advice or resolve individual complaints for consumers. Consumers who are concerned they have been unfairly treated by a company can contact Consumer Direct (tel: 08454 04 05 06, or visit the Consumer Direct website).
This isn't really a new thing, TS has been doing this for decades along with private companies the AA and RAC.
They will never end the practice which in a majority of cases is not deliberate.
Any car salesman will agree with me when I say, motorist part exchanging cars lie, cheat and hide problems with cars more than dealers do when they sell them on. You don't see a dealer hide a rusted through hole in a sill or valence with masking tape and then cover it over with underseal.
There may well have been 68,000 complaints, but how many of them were upheld.
The majority of problems should never happen, dealers should check their stock over before they put them on the lot and customers should make a thorough check of the vehicle before they purchase.
One place where problems should be very very rare is with franchised dealers. A lot of trust is placed on the badge outside on the pole and customers enter franchised dealers believing they are honest and reliable and they can trust the product they purchase from them, and they have a right to expect top quality fault free products.
Trading Standards wants your help
Dubious website businesses Conterfeit alcohol and cigarettes Illegal sales of alcohol, tobacco, knives & fireworks to children Cowboy builders or tradesmen Car clockers Counterfeiters Aggressive selling
Never phone or accept phonecalls from debt collection companies.
If you don't believe you can win, there is no point in getting out of bed.
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And your a used car salesman are you? I was, for 30 years and never, ever ripped any customer off. As mentioned above, many customers dumped their hidden problems on me and lost no sleep over it. I am not that rare either. unfortunately the used car market has its fair share of rogues like any industry. It is unfortunate that people like you want to tar us all with the same brush.
And your a used car salesman are you? I was, for 30 years and never, ever ripped any customer off. As mentioned above, many customers dumped their hidden problems on me and lost no sleep over it. I am not that rare either. unfortunately the used car market has its fair share of rogues like any industry. It is unfortunate that people like you want to tar us all with the same brush.
by the very nature of the trade, there has to be a level of advantage taking. perhaps you are very very exceptional, and it was not meant as a personal attack, but come on, on a consumer rights website your trying to defend an industry that time and time again rips people off.
perhaps you can explain to me exactly how a used car salesman makes his living, if not from selling cars for more than they were purchased for and are worth at market value.
The 'trade' does not rip people off, some unscrupulous people in the trade rip people off. That is completely different.
Yes, they buy at one price and sell at a higher, but so does every retail business on the planet, that is how they all make their living whether new or used anything.
There is rent for the sight, business rates, utility bills and wages to pay, that has to come from somewhere, and not forgetting some profit so new stock can be purchased.
If you think a car is priced higher than it is worth, then you either haggle or go somewhere else, your choice.
If you want a cheapo car, then go private.
Trading Standards wants your help
Dubious website businesses Conterfeit alcohol and cigarettes Illegal sales of alcohol, tobacco, knives & fireworks to children Cowboy builders or tradesmen Car clockers Counterfeiters Aggressive selling
Never phone or accept phonecalls from debt collection companies.
If you don't believe you can win, there is no point in getting out of bed.
_________________________ ________________ _________________________ ___________________
by the very nature of the trade, there has to be a level of advantage taking.
I think you are confusing "profit making" with "advantage taking". The two are completely different.
I agree with what has been said before. In my experience the public are more likely to lie about the vehicle they are part exing than the dealer would lie about the vehicle he is selling to them.
If I could have a pound for every part ex I've had that has mysteriously lost it's radio between the day I valued it and the day I receive it.