22 December 2009
The OFT publish second-hand car market research
The Office of Fair Trading (OFT) has published four research reports undertaken as part of its market study into the sale of second-hand cars. These comprise a survey of second-hand car buyers, second-hand car dealers, UK local authority Trading Standards Services and the results of a mystery shopping exercise.
The main survey of second-hand car buyers purchasing from dealers and auctions found that:
- Almost a fifth (19 per cent) of those buying a second-hand car had experienced problems with it after the sale.
- Most problems arose within three months of purchase (86 per cent).
- Less than half of those who made contact with the dealer about the problem said it was completely rectified (47 per cent).
- Nearly thirty per cent said the problem had not been rectified at all by the dealer. Consumers buying from independent dealers were more likely to believe that the problem had not been rectified at all compared to consumers buying from franchised dealers.
- Among those who paid to resolve the problem the average cost was £465. The average cost was significantly higher if the car had been bought at auction (£752).
- The mystery shop survey of used car dealers found that over one quarter (27 per cent) of shoppers felt the information they received about the target vehicle and services available at the dealership was 'insufficient' or 'extremely insufficient'.
Also, as part of the second hand car market study, the OFT is consulting on draft guidance that sets out the legal obligations of second hand car dealers under two key pieces of consumer law: the Consumer Protection from Unfair Trading Regulations 2008 and the Sale of Goods Act 1979.
The market study the reports form part of was launched in May 2009 following concerns about the large number of consumer complaints relating to second hand car sales. In 2008, the OFT-managed advice service Consumer Direct received 68,000 complaints about issues with second hand car sales. The study aims to help understand the causes of such a high level of consumer complaints and to consider whether existing consumer protection legislation is sufficient and effective. The OFT intends to publish the full market study report in early 2010.
All four research reports and the consultation on guidance are available from the OFT consultation page.