Distance selling regulations in the new normal – classic car litigation
Wednesday 29th July 2020
With more buyers likely to be purchasing classic cars from a distance following the COVID-19 pandemic, Mark Jones, partner at Gordons and an expert in classic car litigation, examines the regulations when purchasing or selling a car away from the trader’s premises.
The COVID-19 pandemic has had an impact on classic/vintage car buying like every other walk of life. The way in which we buy and sell cars is likely to change both in the short and long term, despite the re-opening of car showrooms last month.
Whilst some classic cars may have been purchased at a distance in the past and without inspecting the car, the chances are that these kind of ‘distance selling’ transactions are now more likely than ever before. In recent years, there has been a shift to online advertising with deals agreed over the telephone or via email. Sometimes this can lead to large deposits being paid to the seller based on a few photographs and a verbal account of the car’s provenance – and usually without an inspection of the vehicle.
With our increasingly busy lifestyles, and with continued uncertainty over social distancing due to COVID-19, the ease and speed of completing a transaction at a distance is surely set to become the short-term norm. After all, not even a global pandemic can dull the allure of that desired classic car.
However, whilst distance selling and purchasing may seem like a perfect solution (and in many circumstances it is if done properly), there are increased risks.
For the purchaser, the car may not meet the specification you thought it did or it may turn out that the provenance you were provided with is incorrect.
These are details which are more likely to become apparent on inspection of the car and the papers, but if the deal has been done before this point you have a problem.
For the seller, a purchaser may change their mind before they have paid the deposit or the balance and feel it is easier to walk away when communications have not taken place face to face. Some may even believe that the agreement to purchase is not binding when completed over the telephone or via email.
Distance selling rules
In fact, specific Regulations are in place. The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 usually apply to contracts for the sale/purchase of a car between a private individual (consumer) and a dealership (or other trader) which are entered into over the telephone/via email or away from the trader’s business premises.
Amongst other things, the Regulations provide consumers with a fixed period of cancellation. The length of this period and the start date will depend on how and when the seller provided the purchaser with the information of their right to cancel.
The benefit for purchasers is that they have a fixed period in which to change their mind and cancel the agreement to purchase the car.
In circumstances where the seller does not provide you with details of your right to cancel in accordance with the Regulations, this period can be up to 12 months from you taking possession of the car. You should be entitled to cancel the contract and receive a full refund of any money paid to the seller on return of the car.
If the right to cancel has expired and you are unhappy with the car there may be alternative remedies, which a classic car litigation expert can discuss with you.
And there are benefits for sellers too. If you correctly provide the purchaser with details of their right to cancel, you reduce the length of time a purchaser has to change their mind and cancel the agreement without needing to provide a reason. The shortest cancellation period is 14 days from the day the purchaser takes possession of the car.
If the right to cancel has expired the purchaser is only entitled to a refund if there is something wrong with the car. There may be other remedies available to the purchaser if the specification has been misrepresented.
Identifying the seller
The Regulations do not usually apply to a purchase from a private individual, so it is important to know if the dealer is the owner of the vehicle or if they are selling it on someone else’s behalf.
Sometimes it will be unclear who the seller of the car is, which will be imperative to understanding whether or not the Regulations apply.