HOW TO GET THE BEST DEAL I s l e o f M a n Published by the Isle of Man Office of Fair Trading Government Building Lord Street Douglas Isle of Man IM1 1LE T: (01624) 686500 F: (01624) 686504 E-mail: iomfairtrading@gov.im www.gov.im/oft Designed by The Agency Design Services Tel: 01624 628292 (Ref: 4810/0106) Office of Fair Trading ISSUED BY THE ISLE OF MAN OFFICE OF FAIR TRADING
car can be tricky but you can help yourself We explain the difference between buying from a dealer, a private seller or from an auction. Our checklist tells you what to look out for when you inspect a car. We also give tips on paying for the car. And there is advice on what to do if the deal goes wrong. CONTENTS Before you buy...2 Your rights when buying...2 Your rights...3 privately...3 at auction...4 What to look out for...4 Paying for the car...8 Deposits...8 your car on credit...9 Before you buy Decide how much you can afford to pay - make sure you include running costs such as insurance, road tax, fuel, servicing, repairs and the cost of parking if using your vehicle to travel to work. Get quotes from insurance companies for several models of car - you may find that choosing a different model or a smaller engine size will reduce your annual insurance bill. Work out a fair price for the car you want - have a look through consumer car price guides and motoring magazines (both available from newsagents) to find out how much you might expect to pay for the year and model of the car you want. You can also search the internet for car price information. Ask around about the reliability of the car - talk to any colleagues or friends who have the same model or make, and consult motoring magazines and/or websites. Shop around - look at several different types of car from more than one seller, so that you have a choice. Don t choose a make and model too soon, or fall in love with a car. Check whether the car comes with a valid warranty - (or mechanical breakdown insurance) and what the terms and conditions are. Your rights when buying Your rights when buying used cars vary enormously - depending on who you buy from. You can buy used cars from dealers, private individuals, at auction or over the internet. On the following pages you can read about your rights in each case and what to watch out for. from a dealer Your rights this can be the safest way to buy car but there are still dodgy dealers around. Look for an established firm with a good reputation - ask friends if they can recommend anyone. Dealers often belong to trade associations which may mean they follow a voluntary code of practice. If they do, and you have cause to complain, it could be easier to resolve. See page 9 for address details. Ask for a copy of the code to see what it covers. Look for a garage whose cars have been inspected by a motoring association. Who to complain to...9 2
Your rights When buying from a dealer, the law says that a car must be: of satisfactory quality it must meet the standard that a reasonable person would regard as acceptable. This covers, for example, the appearance and finish of the car, its safety and its durability. the car must be free from defects, except those that were pointed out to you by the seller (there will be normal wear and tear when a car is used), and those which should have been uncovered by an inspection (but only if you inspected the car, or if someone did it for you). as described a car said to have one careful middle aged owner shouldn t turn out to have had three previous owners, who all drove the car as if they were in a rally. reasonably fit for any normal purpose it should get you from A to B - and for any other purpose that you specify to the seller - for example, towing a caravan. These rights are not affected by any mechanical breakdown insurance (often sold by second hand dealers if the manufacturer s warranty has run out), guarantee or warranty giving additional protection. It s a good idea to get a description of the car s condition from the dealer. Ask whether there is a pre-sale inspection checklist. privately This should be cheaper than buying from a dealer. It could also be riskier too, for example, the car could be stolen. It may have been used as security for a loan or hire agreement and actually belong to a finance company. To help put your mind at rest use our checklist or arrange to have the car inspected professionally, and always check with one of the companies which keep databases of information about cars. Your rights you have fewer legal rights if you buy privately. The only rules are that the car must be roadworthy and must be as described. If a private seller lies about the condition of a car, you can sue for your losses. Some dealers pretend to be private sellers* to avoid their legal obligations and to get rid of faulty or over-priced cars. Signs to look out for include: ads giving a mobile phone number or specifying a time to call. You may be calling a public phone box rather than the seller s home. the same phone number appearing in several ads. when you phone about the car, the seller asks which one? instead of showing you the car at their home, the seller wants to bring the car to you. Note that ads in classified sections of the newspapers with T or TS in the particulars indicate a trade sale. at auction You can pick up a bargain at an auction but you need to know what you are doing. Your rights auctions can be a risky way of buying car. Auctioneers can refuse to accept responsibility for the quality of the goods they auction. Your only redress is with the seller and your usual legal rights may not apply if the seller issues a disclaimer, such as the term sold as seen. What to look out for Is the car in reasonable condition? Look at the car in daylight and when it is dry. Both bad light and rain can make faults difficult to spot. Our checklist gives an idea of what to look for, but, if you re not confident about cars, take someone with you or get the car professionally inspected. You should also take a torch so you can inspect those areas that are hard to see under normal lighting conditions. Take it for a test drive. If you are buying from a private individual make sure you are covered by your insurance or theirs. Walk away if the seller is not happy to have the car tested by a professional mechanic (motoring organisations and specialist companies offer this service). If the car has already been inspected ask to see the report. Make sure any deposit that is paid is subject to survey, so that it is Go along as a spectator first and see what happens. Make sure you study the conditions of sale before bidding. Decide the maximum you can afford and stick to it. Once the hammer has fallen you can t back out. returnable in case the mechanic s report advises against buying it. Check the service record book especially if the car is still under an extended warranty from the manufacturer. You may also want to check with your local dealer that they will honour the warranty, based on the car s service history. If you identify any significant faults you should either negotiate a price reduction, get the seller to fix the faults at their expense or walk away. Is it an insurance write-off? If a car has been in an accident, it may be unsafe. Sometimes, two damaged cars are welded together to create a new one. These are known as cut and shuts and are almost certainly unsafe. Our checklist (pick up extra copies from our office or website) tells you some of the signs that may point to accident damage. 3 * If you think someone who says they are a private individual is in fact a dealer contact us on 686520. 4
checklist Helping you to get the best deal when buying car This checklist should be read with the booklet car. It is a guide to help you decide whether a car is worth buying. If you find yourself ticking a lot of Yes boxes in one or more sections, it may be best to walk away. If you don t feel confident about carrying out these checks yourself, get an expert s opinion. If you find yourself ticking a lot of yes circles in one or more sections, you should seriously consider whether to go ahead with the purchase. Before the test drive Are sills, wheel arches and door bottoms rusty or the paint bubbling? Is the paintwork faded, blemished or excessively damaged? Are there oil leaks or damaged hoses/drive belts under the bonnet? Are tyres worn or damaged? Are seat belts showing signs of fraying? Do door and window seals show signs of leaking? Are electrics faulty (lights, washers, horn and indicators)? When you start the engine and before you drive away does the vehicle emit blue or black smoke from exhaust? (indicates badly-worn engine) Is the car in reasonable condition? During the test drive Are brakes defective? (eg, car takes a long time to stop) Does car pull to one side when you brake? Do brakes squeal? Is the brake pedal soft or spongy? Do you have to put the pedal to the floor to brake? Park the car on an incline with the handbrake on. Does the car roll backwards? Does the steering wheel vibrate? Is there a lot of free play? Does car pull to one side? Is changing gear difficult? Does gear lever jump out of gear when you brake or accelerate? Is the clutch difficult to use when moving through the gears? Does engine sound different if clutch is pressed when car is idling? Is there a strong smell of petrol or oil? After the test drive - open the bonnet and take a look while the engine is running. Then switch the engine off. Does the engine make unusual noises? Are there water or oil leaks? Is there excessive smoke from the exhaust? When engine has stopped, remove oil cap - do you see white liquid like mayonnaise? Look under the bonnet and underneath the car, with a torch if necessary. Are there any leaks? Is it an insurance write off? Have body panels been repaired? Is colour/texture of paintwork patchy? Has welding been carried out under the bonnet? Have repairs been carried out on the boot? (check under the carpet) Has it been clocked? PHYSICAL CHECKS Are mileometer numbers out of line? Is wear and tear heavy, given mileage? Have pedal rubbers/gear knob/steering wheel been changed? PAPER CHECKS/QUESTIONS TO ASK Is it stolen? Does mileage on service record contradict mileometer reading? Does mileage on service documentation contradict mileometer reading? Does mileage when car was last sold contradict mileometer reading? (check with previous owners - named on Log Book) PHYSICAL CHECKS Has the vehicle identification number (VIN) been tampered with? Are glass areas such as windows, lights or sunroof etched with incorrect VIN? (as a security measure some cars have the VIN etched on their glass) Have surface areas of glass been scratched off windows, head lights, tail lights, sun roof? Do stickers conceal altered etching? Are there signs that the car has been resprayed, for example is there paint on the wheels or seals? Are there signs of forced entry? Has the locking petrol cap been forced and replaced? Do the locks differ? (thieves often change locks they have damaged) PAPER CHECKS/QUESTIONS TO ASK Is the seller unable to produce the registration document (Log Book)? Does the seller give an inadequate reason for not having the Log Book? Are there spelling mistakes or alterations to the Log Book? Is seller s name and address different from Log Book? (ask seller for proof of identity and address, eg, driving licence, utility bill) Is number plate different from Log Book? Is engine number different from Log Book? Is vehicle identification number (VIN) different from Log Book? (check VIN plate in engine compartment and under both bonnet and driver s seat) Is the seller unable to produce an insurance policy and an up-to-date Road Tax Disc for the car?
Has it been clocked? Low mileage can be a selling point. But the clock can be turned back to reduce the number of miles shown. If the mileage is low but the wear and tear on the car looks heavy the car could have been clocked. See our checklist (in the centre pages) for other signs. Your rights the mileage reading forms part of the description of the car. Make sure the seller s invoice shows the mileage recorded at the time of sale. Sellers sometimes protect themselves by covering up the mileometer or issuing a disclaimer saying that the mileage may be wrong. To be valid, such a disclaimer must be at least as noticeable as the mileage reading and as effectively brought to your attention. Is it stolen? It can be hard to tell whether a car is stolen. Its identity may have been changed - for example, the identity number and number plate of a legitimate car may be transferred to a stolen one. Vehicle registration documents can be forged or obtained by fraud. Always ask to see the vehicle registration document and use the information on it to help you decide if the seller is telling the truth (see checklist). Your rights you can sue the seller for your losses but this might be difficult if you bought privately and the seller has disappeared. If you bought the car on credit you may still have to pay off the loan. It depends on the type of agreement you have. If you buy a stolen car, the police can take it from you to return it to the original owner or the insurance company if a claim has been paid. You will not get any compensation from the police, your insurance company or the original owner even though you bought the car in good faith. Does the car belong to a credit company? A car bought on hire purchase or conditional sale belongs to the finance company until the payments have been completed. Your rights if you buy a car with outstanding finance on it, the lender can take it back. The only thing you can do is sue whoever sold you the car - if you can find them. There are some limited exceptions to this. If you were not aware that the car was subject to an outstanding credit agreement and bought it in good faith, you may be allowed to keep it. This does not apply to stolen cars or cars that were subject to a hire or lease agreement. You will need to get professional advice on this. Paying for the car Once you have found the car you want, the next step is to negotiate a price and pay for it. Negotiating a price Most used car prices are negotiable. You will be better able to negotiate if you have worked out a fair price for the year and model of the car. If you are buying from a dealer and want to trade in your old car you should work out a fair price for the old car, too. When trading in an old car it s important to consider the cost to change, for example cost of insuring the new vehicle, not just the purchase price or trade-in price. If you get a professional mechanic to inspect the car you want to buy, they will usually tell you how much they think the car is worth. Deposits Deposits are often requested by sellers as proof of your intention to buy and to reserve the car for you. If you pay a deposit and the firm goes out of business, or the individual disappears, you could get little or no money back. You should not pay anything in advance unless Let the seller make you an offer and then negotiate. Ask for clarification if you re not clear about any part of the deal. You may get a discount if you pay by cash although cheques can be more easily traced if there is a problem. You may be able to negotiate a discount if you do not have a vehicle to part exchange or the dealer is organising a loan for you. Dealers earn commission by arranging finance, so try to bargain for part of the commission on the finance deal or arrange your own finance. Do not be afraid to say you want time to think or walk away if the deal s not right. you have to - although sometimes it will be unavoidable. If you do pay a deposit make sure you get a receipt showing the company s name and address and the car details including registration, vehicle identification number and mileage. Check whether deposits are returnable, and if so, in precisely what circumstances, because if you do pay a deposit and then cancel the order, the firm could claim it is entitled to keep the deposit. Check whether the firm belongs to a trade association that runs a scheme to protect prepayments. If you are buying from a private individual, it is best not to give a cash deposit. 7 8
your car on credit Many dealers offer their own form of credit or will arrange credit for you. But it is always open to you to borrow the money from another source. For more information about taking out a loan please see the OFT website. What to do if things go wrong Act promptly Go back to the seller, explain the problem and what you want done. If you aren t happy with the outcome, get advice. Contact us on 686500. If a dealer is a member of one of the trade associations listed on this page, they may be able to help. If you are a member of a motoring organisation they may be able to help if you have problems. Who to complain to The following are the details of the trade associations who should be contacted if you have a problem with one of their members. For complaints about RMIF members in Isle of Man, England, Wales & Northern Ireland The National Conciliation Service Retail Motor Industry Federation (RMIF) 2nd Floor Chestnut House 9 North Street Rugby CV21 2AB Tel 01788 576 465 www.rmif.co.uk For complaints about cars still under a manufacturer s warranty The Consumer Affairs Department Society of Motor Manufacturers and Traders Forbes House Halkin Street London SW1X 7DS Tel 0207 235 7000 9