Nov 302004
 

warrantydirect_timebomb_2New regulations governing the sale of warranties will finally”do away with worthless policies” being used to entice forecourt sales, according to independent specialist, Warranty Direct.

From 15th January 2005, dealers who are not registered with the Financial Services Authority or as an agent of an approved insurer, will be prevented from selling insurance related products like mechanical breakdown warranties.

After this date, registered dealers will not only have to comply with strict guidelines, which include a right to cancel after 14 days, but inform consumers of the terms and conditions and any exclusions within the policy.

This is where the public will benefit most says Duncan McClure Fisher of Warranty Direct. “Every week, we receive SOS calls from car buyers who’ve been sold a policy that is quite simply not worth the paper it is written on. No sensible person would buy a warranty that only provides cover up to a £500 limit when the excess is £200 if they knew about it.

“Yet, unless they have had the opportunity to go through the legal speak print, this is the kind of policy that you could end up with.”

McClure Fisher believes that the need for dealers to be more transparent will lead to a shake-up of the market, and eventually, the end of the worthless warranty.

Dealers handle approximately 5m used cars sales every year, each being sold with at least a 3-month warranty. But how can you check that you’ve got worthwhile cover?

In order to check that you’re getting worthwhile cover, Warranty Direct recommends you quiz the dealer on the following:

• Are you covered against failure of WORN parts?
• Is there a 14-day money back guarantee?
• What is the claims limit?
• Where can you take the car to be serviced and repaired?
• Is there a consequential loss exclusion?
• Does it have a policy excess?
• How long before you can make a claim?
• What parts are covered?

Alternatively, you can log onto www.warrantyguide.co.uk/scorecard.html and see how high the warranty being offered scores.

Nov 082004
 

WDNearly 3 out of 4 car buyers admit they don’t know their consumer rights
under the Sale of Goods Act, according to a survey by independent automotive
warranty firm, Warranty Direct.

The motorist’s position was considerably strengthened last March (*EU Sale of
Goods Directive 1999/44/EC) when the burden of proof was shifted squarely onto
the shoulders of the dealer during the crucial first six months of ownership.

However, researchers found that the majority of people simply had no knowledge
of the change. The new regulations mean the dealer must prove beyond doubt that
the vehicle was of ‘satisfactory quality’ and not bearing an ‘inherent fault’
at the time of sale.

“Unfortunately, there is no exact definition of the term ‘satisfactory
quality’, but the law provides the consumer with a significant level of
protection,” explains Duncan McClure Fisher of Warranty Direct.
“However, too few realise how strong a position they are in if things do
go wrong with the vehicle.”

Although under no obligation to inform the customer of their rights, the survey
also found that only 1 in 10 car dealers explained the new level of protection
automatically afforded to them.

“Despite the revisions to the Act last year, the onus is still very much
on the car buyer to know where they stand,” says McClure Fisher.

Analysis of a sample of vehicles aged 3-5 years by Warranty Direct shows that
17.1 percent will report a failure in the first six months on average. Yet McClure
Fisher warns that people must temper how they define ‘satisfactory quality’.

“You need to consider a variety of factors: whether you are buying a low
or high mileage car, whether it has been regularly serviced or not, and if the
price being asked by the dealer reflects the condition of the vehicle. In other
words, the brakes will become worn in time, but you would not expect the engine
to blow in the first couple of months.”

From Warranty Direct analysis, one in five of the vehicles that required remedial
work within the first three months of ownership experienced axle and suspension
problems. In the first month alone, electrical and coolant gremlins accounted
for 13 and 11 percent of failures, respectively.

With the British used market worth £32bn annually, Warranty Direct advises
motorists to become familiar with the regulations and understand the true
extent of their rights before they buy. Where possible, the firm actively
assists the car owner to purse the selling dealer for any inherent faults under
the Sale of Goods Act.

However, if you are having difficulty resolving a dispute with the selling
dealer, there are several agencies designed to help. Firstly, consumers can
visit their local Citizen’s Advice Bureau www.citizensadvice.org.uk, who
will be able to advise on what your rights are and suggest the best course of
action. If the response from the seller remains unsatisfactory, you can report
them to their local Trading Standards office. Visit www.tradingstandards.gov.uk for
further information.