The consumer’s issue:
“The seller did not inform me that the vehicle was an ex-rental car. I believe that I have been misled, and would not have purchased it had I been made aware of its history. I am therefore requesting compensation because of this.”
The accredited business’ response:
- Before the consumer took the vehicle from our premises, they were supplied with the registration document to tax the car so that it could be driven legally on the road. With the paperwork included in the consumer’s complaint, it clearly showed that a rental company was the first registered keeper.
- The rental company is a genuine previous owner which is part of a worldwide company of high standing and has a rigorous system of checks and controls to ensure that the car is properly maintained and checked.
- The consumer has not overpaid for the vehicle, and if they were trading in the car with us, the first owner would not have had a detrimental effect on its value.
- The official registration system provided by the DVLA only has a record of the registered keepers of a motor vehicle, but it does not show the actual drivers of the car. There is no central database for a motor dealer to provide evidence of the number of drivers. Even a vehicle owned by one private owner could have had a number of drivers in the family or permitted users.
- The fact that motor insurance companies offer any permitted users of the car cover, if taken out, indicates the frequent nature of multiple drivers using the car.
- We deny that there has been any loss or misrepresentation.
- By supplying the consumer with the tax book before leaving the premises, we have sufficiently disclosed the history of the vehicle.
- Additionally, the consumer has suffered no loss in the value of the car.
The adjudication outcome:
- Under The Motor Industry Code of Practice for Vehicle Sales, the business has an obligation to comply with the standards of the Advertising Standards Agency (ASA), the UK’s advertising regulator.
- The ASA’s recent ruling on Glyn Hopkin Ltd and Fiat Chrysler Automobiles Ltd shows where (1) a vehicle has been used for business purposes and (2) has had multiple users, this is material information which may affect a consumer’s purchasing decision. Therefore, it must be disclosed to the consumer in the advert for the vehicle.
- As such, when a business is aware that the car was previously used for business purposes, the vehicle must be advertised with this information.
- Based on the evidence submitted, the business was aware that the car had previously been used for non-leisure purposes since it was stated on the V5, and therefore, it had failed to disclose this information within the advert.
- It is the current position of the business that the consumer was provided with sufficient disclosure since it was stated in the V5 document.
- Since the consumer was provided with the required information on the history of the vehicle, after they had entered into a binding sales contract, the adjudicator believed that there was a clear breach of The Motor Ombudsman’s Code of Practice.
- The disclosure of this information was necessary because of the effect it had on the consumer’s purchasing decision.
- Therefore, to disclose these details during the handover process was not sufficient to satisfy the obligations of the business.
- Based on the recent decision by Gateshead Council Trading Standards against Robins and Day Gateshead, where the consumer only discovered that the vehicle had been previously owned by a car hire company when they were provided with the V5, the consumer was paid 10% of the purchase price of the vehicle to resolve the dispute.
- Based on this recent decision, the adjudicator recommend a financial award of 10% of the cash price for the vehicle to conclude the dispute.
- As it relates to the financial award, the adjudicator did not give consideration for the interest charged on the finance agreement since this related to the consumer’s agreement with the finance company and was separate to their sales contract with the dealership.
- The customer and accredited business accepted the outcome as recommended by The Motor Ombudsman adjudicator and the case was closed.