Consumer Rights Act pressures could be creating an unintended consequence in the used car market, with some perfectly serviceable older vehicles moving away from established dealerships and ultimately into the cash market, Warranty Solutions Group (WSG) has warned.
The concern comes as latest Auto Trader data shows affordability pressures are continuing to shape consumer choice, with 10–15-year-old cars recording 7% year-on-year price growth in July as some motorists move towards older or lower-priced vehicles to stay within budget.
At the same time, WSG research among more than 100 UK motor retailers found 85% had changed their stock-buying or retailing practices because of Consumer Rights Act disputes and rejected vehicles, including moving towards newer and lower-mileage stock and avoiding particular models or known problem vehicles.
WSG believes the findings raise a new question: What happens when growing consumer demand for affordable older cars meets increasing caution among the reputable dealers being asked to retail them?
“Last month, we highlighted that some dealers are choosing to trade on perfectly good older cars rather than retail them themselves. The question we are now asking is: where do those cars ultimately end up?
They don’t disappear. They can move further down the trade and, in some cases, ultimately enter the cash market, where they may be sold privately or by an unregulated seller.
The consumer may still end up buying exactly the same car, but instead of purchasing it from a reputable dealer that has prepared and warranted it and has legal responsibilities to the customer, they could be handing over cash to a private seller with far fewer legal protections and much less recourse if something subsequently goes wrong.
That is the paradox we need to examine. Could pressures created by legislation designed to protect consumers inadvertently contribute to some buyers purchasing cars through parts of the market where they have less protection?”
John Colinswood is CEO of Warranty Solutions Group
