Ex-rental car purchase

The consumer’s issue:

“I contacted a franchise dealership in February 2021 to arrange a viewing of two SUVs of the same make and model as my existing six-year-old car. I sat in both of these vehicles on the forecourt, and then had a discussion with the salesperson in the showroom, where I explained that I would require a full-service history with the new vehicle, and that it was to be covered by the brand’s approved used car scheme. I also made it clear that I wanted to complete the purchase prior to both my current car’s MOT expiring on 25th March 2021, and an imminent service that was to include changing a timing belt.

I was assured that all used cars on the forecourt came with a three-year warranty and were covered under the approved used programme, and with these assurances in mind, I decided on a different used 19-plate SUV based on external appearances alone. The salesperson then produced a form which gave details of this car and my SUV which I was looking to part-exchange. The salesperson factored in a deposit of £250, and the form was not signed by either party. I was also unaware that if the agreement fell through, I would not be able to have the deposit returned, which I paid on 25th February 2021.

Between this date and 12th March, I received four different versions of the service history belonging to the car I was looking to buy and, eventually, I received a version of the service history which showed that some services has been undertaken outside of the manufacturer’s recommended schedule. The dealership informed me that this was due to the pandemic, and that there would be some exceptions made to ensure that the manufacturer’s warranty was valid.


However, at this point, I had lost faith in the dealership, the service history, and in the vehicle itself. This was compounded by the fact that when I had received the V5C, I could see that the car had a previous owner which was a rental company. Therefore, considering that the retailer could not provide an accurate service history, and that there was evidence to show that the dealer had been withholding information from me, I decided to withdraw from the purchase of the replacement SUV.


I therefore requested the return of my deposit four times, but the dealership advised that that they would not be giving it back to me, and would instead offset this against a future purchase during the next twelve months. However, in light of the my experience with this business, I just want my money back and not to have to deal with them again.”

The accredited business’ response:

  • We would first like to clarify that the customer looked at several SUVs on our forecourt, and inspected two at length in our car park, which included looking at the service books. One of these cars was the one they eventually decided to buy.
  • The consumer however, test drove the other car they didn’t buy one for some reason, and by law, we were required to disclose that their preferred 19-plate vehicle was an ex-rental car.
  • This was further validated by the fact that the consumer had a copy of the registration document when they requested it at a later date on the 17th March 2021.
  • When a customer agrees to purchase a car, our policy is to remove it from sale and to take a non-refundable deposit when the contract is executed. The terms and the conditions of the sale, including those relating to the deposit, were clearly stated on the back of the order form that the consumer could not sign because of COVID restrictions at the time.
  • We would also like to point out that the following term was included on the paperwork, which we maintain was applicable to this consumer: “If the Purchaser shall fail to take and pay for the vehicle and the accessories within 14 days of notification that the goods are available for collection, the Seller shall be at liberty to treat the contract as repudiated by the Purchaser, and there upon the deposit shall be forfeited without prejudice to the sellers right to recover from the Purchaser by way of damages any loss or expense which the seller may suffer or incur by reason of the purchasers default.”
  • As such, we maintain that we are within our rights to keep the deposit taken from the consumer on this occasion for the purchase of this vehicle.

The adjudication outcome:

  •   The Motor Ombudsman adjudicator identified that there were three potential breaches of the Vehicle Sales Code. These were in relation to:

1. Withholding information about a vehicle’s history or usage that may affect a customer’s purchasing decision;
2. Not being clear on the specifics of vehicles and sales processes, including the terms of any contractual documents; and
3. Not supplying the terms and conditions in relation to a deposit.


Withholding information:

  • Usually, the burden of proof would be on the consumer to show that the dealership had breached their obligations under the Code.
  • However, considering that, on this occasion it was the seller that had maintained that they had verbally informed the consumer that the vehicle was an ex-hire car. Therefore, the adjudicator considered that it would be fair to expect that the seller provided evidence to show that the consumer had been told about this vehicle’s status.
  • Based on the documentation supplied to The Motor Ombudsman, the adjudicator could not establish that the business had informed the consumer about its provenance. As a result, it was concluded that this information was withheld from the buyer, meaning this element of the consumer’s complaint was upheld in their favour.

Not being clear on the terms of contractual documents:

  • Upon the review of the documentation, the adjudicator stated that it was not made clear what should happen should a purchaser elect to cancel the agreement prior to the notification that a vehicle was available for collection.
  • On the date that the vehicle was estimated for delivery, the consumer contacted the business seeking to cancel the agreement at this stage, and requested the return of their deposit. On this point, the adjudicator could not identify any documented response where the business had notified the consumer that the vehicle was available for collection.
  • Therefore, under the terms and conditions, the dealership was not in a position to apply the relevant clause of the terms and conditions, as a key condition had not been met and been accounted for within the circumstances that unfolded in this case. As a result, this element of the consumer’s complaint was upheld in their favour.

Not supplying terms and conditions in relation to a deposit:

  • The adjudicator noted that there was a dispute as to whether the terms and conditions attached to the order form were provided to the consumer at the point of sale.
  • The customer claimed that they had not received the terms, which the business disagreed with.
  • Although the business accepted that the vehicle order form was not signed by the consumer due to COVID-19, their position was that the contract was agreed verbally amongst the parties.
  • However, the adjudicator concluded that the dealership had supplied insufficient evidence to demonstrate that the terms and conditions of the deposit had been made available to the consumer at the point of sale – a breach of the Vehicle Sales Code.


  • In conclusion, the adjudicator had found that there had been three separate breaches of the Vehicle Sales Code, and considered that it would be fair and proportionate that the dealership should provide the consumer with an apology for these breaches and a refund of the deposit of £250 that the consumer had paid to the dealership.
  • Both parties accepted the proposed outcome, and the business provided the consumer with an apology and a refund of the deposit. The case was closed.