How to avoid costly mistakes when buying a second hand car

Article reference: UK-IA-SGA35
Last updated: September 2022 | 8 min read

There is always a degree of uncertainty when buying a vehicle. You will only really know whether it is reliable and fit for your purposes when it has been in your possession for some time. The risks may be minimised by understanding your rights, by following a procedure prior to the sale and by using a sale agreement which defines the responsibilities of both the buyer and the seller. Taking these precautions will reduce the likelihood of misunderstandings or complications later on.

Bear in mind, however, that it may be better to avoid vehicles of doubtful condition or history altogether, since recovering payment by legal means can be expensive and take time.

Buying from a dealer

Consumer rights for vehicle buyers

Buyers are protected by consumer rights legislation when purchasing from a dealer, so this is generally a less risky option than buying from a private seller or at a live auction.

The dealer must have the right to sell the car, and is liable for any faults that were present at the time that it was sold.

The Consumer Rights Act 2015 covers the purchase of goods, digital content and services including new and used cars from official dealers as well as servicing, repairs and maintenance work (transactions for the same before 1 October 2015 are covered by the Sale of Goods Act).

They must be described accurately, and be fit for purpose –that is suitable for normal expected use, and also for any particular purpose that has been discussed with the dealer or that they have advertised.

They should also be of satisfactory quality, meaning that they should meet reasonable expectations of condition given the description and factors such as mileage, age, history and value.

For example, a new car with low mileage would be expected to be of a higher standard than an older car with higher mileage.

These legal requirements mean that dealers must verify the condition (including the accuracy of the odometer mileage) of cars before offering them for sale.

Faulty vehicles

If it turns out after purchasing a vehicle that it does not meet these conditions (it is not as described, is not fit for purpose or is not of satisfactory quality), the buyer can redress the problem according to the elapsed time since purchasing, and the type of fault. The dealer is not, however, responsible for reasonable wear and tear emerging from usual use, or for any problems which they have told the buyer about before the sale.

Within the first 30 days after the purchase, the buyer can reject the vehicle under the 2015 Act. Between 30 days and six months, the buyer is entitled to a repair, replacement or refund. The law gives the buyer the benefit of any doubt as to whether a fault was present at the time of purchase, and the onus is on the seller to prove that it was not. The dealer has just one opportunity to rectify the problem unless another agreement is made. After that the buyer is entitled to a refund. If there is a refund after a failed repair within this period, the dealer can make a reasonable adjustment to the amount refunded to account for wear and tear by the buyer. After six months, the buyer must then prove that the product was faulty at the time of the transaction in order to pursue a claim for repair or replacement.

Buyers are also protected by the Consumer Protection from Unfair Trading Regulations (2008).  Under these regulations, dealers cannot give false information about a vehicle, be it verbal, written or visual. Neither can they withhold information, for example issues identified during checks on the its condition or history. Sellers are forbidden from using aggressive techniques, e.g. to sell a vehicle, or finance and warranty products. They must act in accordance with reasonable expectations of what is acceptable. The regulations also prohibit 31 specific practices, such as falsely claiming to have had endorsements, approvals or authorisations from third party organisations, or that they have signed up to a Code of Practice when they have not. Another specifically forbidden practice, related to aggressive selling, is that of falsely suggesting that a vehicle will sell quickly in order to prompt a purchasing decision.

Obtaining a refund

If the purchase was with a credit card, buyers may claim against the credit company under Section 75 of the Consumer Credit Act. For debit card payments, claims may be possible through the chargeback scheme.

Buyers that are paying under hire purchase can reject the transaction through the finance company, as long as the reasons for rejecting are covered by the regulations described above. Faults may also be covered if it came with a guarantee, or under any associated warranty. Having a warranty does not affect your right to reject or claim under the regulations described above.

Buying vehicles online

Online purchase of cars is regulated by the Consumer Rights Act, and the Consumer Contracts Regulations provide extra protection to the buyer who buys online.

The right to cancel

Under the Consumer Contract Regulations, consumers have an unconditional right to cancel an order for whatever reason, provided they do so within 14 days of receiving their goods (this was previously 7 days under the DSRs (Distance Selling Regulations), and just to be clear, that’s 14 calendar days from when the goods are received, not from when the order is made or from when the item is dispatched (as some online sellers seem to believe).

Sellers are required to provide certain details, such as their contact information, an accurate description of the vehicle, cost and delivery information. Most importantly for a buyer, they must tell you your cancellation rights and the time limit for cancellation. If you need to return it because it is faulty, the seller must cover the cost of the return. However if you are returning it because you have changed your mind, you are responsible for the return delivery cost.

Buying a used car from a private seller

When buying a used car from a private individual, more of the risk is adopted by the buyer as compared with buying from a dealer, since consumer rights do not apply to sales made by private sellers. This is also the case for private online transactions, whether directly with the seller or through an auction site. The onus is on the buyer to satisfy themselves that it is of sufficient quality for their needs. It is therefore sensible to have its condition and history checked before a purchase.

Private sellers are still bound by some legal terms. They must have the right to sell the car and their description of the car must be accurate. The car must be roadworthy, since it is a criminal offence to sell a car that is not roadworthy. A current MOT certificate is no guarantee of roadworthiness. They may be sold for scrap, or 'spares and repairs' if they are not roadworthy, but this must be stated in the description.

Since the legal obligations of private sellers are less stringent than for dealers, a dealer might pretend to be a private seller, although this is illegal. Be cautious with sellers that want to meet away from their home, or who are not named on the car registration document.

Buying a used car at a live auction

In general this is the option with the least legal protection. Buyers should check the terms and conditions of the auction prior to bidding, as compliance with the usual consumer protection regulations can be excluded. If that is the case then vehicles are 'sold as seen', and buyers should mitigate the risk of faults by carefully checking them before bidding. Normally the auctioneer cannot be held liable for illegal practice by the seller, such as not having the right to sell the car (e.g. a stolen car). Any action you may need to take must be against the seller, if they are traceable. There may be an option to purchase a guarantee or insurance from the auctioneer. Such products provide limited rights and the buyers should check the conditions carefully. There may also be a cooling off period in which to reject it, but this is likely to be short.

Using a vehicle sale agreement

A vehicle sale agreement is a simple legal contract between the seller and the buyer with the exchange agreed on a sold as seen basis. It is a reminder to both parties of what should be included and checked to avoid later complications.

Such a contract requires the seller to tell the buyer about any issues with the vehicle prior to the sale.

It gives the buyer a list of important things to check, such as its history and paperwork.

It reminds and obliges the seller to register the change of ownership with the DVLA.

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