Nervous of Breakdown

The DIA is often approached by members exasperated by problems with a new training car.

When disaster strikes . . .

What sort of problems? Well, the sort that cause the new car to spend many days or even weeks off the road in the dealer's workshop without any signs of the service manager or mechanics finding the root cause of the fault or even knowing what to try next in the fault diagnosis process.

Sometimes the main dealer network appears to be paralysed and seems to be getting no valuable assistance from the manufacturer. If this happens to an ordinary 'social domestic and pleasure' motorist, it can be a mere annoyance or may involve perhaps the disruption of holiday plans. For a driving instructor, however, any time at all off the road is a potential disaster to his business.

What do you need to do?

1 Protect your business.
2 Know your rights and how best to exert them.
3 Know where to go to get effective assistance.

Protecting your business

How can you protect your business from this kind of potential catastrophe? Can insurance protection be taken out for this eventuality? Perhaps, but we know of no standard policy that would cover this. So what should you do?

You need to have written on the face of the car purchase contract some words such as "vehicle purchased specifically for full-time driving instruction". You could also add "must be 100% reliable and available for this purpose 24 hours a day, seven days a week, apart from standard servicing intervals", and should ensure that the dealer supplying the new car fits the dual controls before taking delivery. These steps will ensure protection not only by the Sale and Supply of Goods Act 1994, but also by Contract Law. This should therefore ensure that you are given the use of a dual controlled replacement car whenever your car is off the road.

Duty and goodwill

If as an ADI you have not protected your business in this way, you still have a duty to your business and pupils. A suitable dual controlled car must be hired, so you can continue to service your contracts with pupils for driving lessons, protect your reputation for reliability and, in the longer term, the 'goodwill' that exists locally for your business. As a self-employed person, you can always claim such additional business expenses against income tax. You may even be able to persuade the dealer to make an 'ex gratia' offer to cover such hire costs. This will always be easier than trying to make a subsequent claim against the dealer for 'loss of business'.

Keeping a log

In every case of problems with a new car, ADIs are strongly advised to keep a very comprehensive and detailed log of everything that happens from the first incident until all problems are fully resolved. What should be recorded? Date, time, symptom of fault, when reported to garage, name of person spoken with at garage, date and time booked in, date and time collected etc. If the problem persists, then write directly to the Managing Director of the dealership explaining the problem in detail, how it is affecting your business and what you wish him to do about it. In authorised dealer networks, he is referred to by the motor manufacturer as 'the Dealer Principal' and you can be sure that 'the buck stops with him' as far as getting all matters fully resolved. If necessary, arrange to meet him, bringing along a friend as witness. You are advised to keep photocopies of all correspondence and to copy your letters to the DIA and also a named Trading Standards Officer at your local council. In this way, it will be clear to the MD of the dealership that you will, if necessary, obtain direct assistance from either or both of these to obtain your rights.

Knowing your rights

What rights do you have in car purchase? Things have changed recently for consumers with the introduction into UK law of EU Directive 1999/44/EC on Sale of Consumer Goods. The new UK law is the Sale and Supply of Goods to Consumers Regulations 2002, which came into effect on 31 March 2003. Under this new law, consumers have much greater protection and the onus is now on the supplying dealer in the first six months to prove that there was no fault when the goods were supplied. However, the DIA has received advice from its local Trading Standards department that, for the purposes of this new law, a 'consumer' is defined (in Regulation 2) as anyone who is 'acting for purposes which are outside his trade, business or profession'. This means than an ADI buying a new training vehicle for use in his business, i.e. with dual controls fitted, will unfortunately not receive the added protection of these new consumer regulations. ADIs must therefore rely on the previous existing law. Under the Sale and Supply of Goods Act 1994 (a revision of the Sale of Goods Act, 1979), any purchaser has the right to reject any new 'goods' within certain time scales. Under the Act, goods supplied must be of 'satisfactory quality' and 'fit for all the purposes for which goods of the kind in question are commonly supplied'. Also, a car sold as new by a dealer must even be 'free from minor defects', whereas a used car is normally 'sold as seen'.

Sole contract

It is important to note that your sale contract is with the supplying dealer alone and not with the motor manufacturer. We understand that, by law, all cars sold new in the UK must now (since January 2002) come with two years of 'manufacturer's warranty', but will also typically have a further number of years of 'dealer warranty'. This is why we advise writing to the Managing Director of the dealership in person. His senior staff and employees are all fully briefed to 'make problems go away' and not to bring them to his door. If you write to him direct, he cannot avoid responding. Ask for his written reply within seven days.  

We mentioned earlier the importance of getting the dealer to fit the dual controls in the car prior to your taking delivery. In this way, the dealer cannot deny knowledge of your 'intended purpose' for the car. If the dealer was aware of any 'specific purpose for which the car was intended', e.g. by fitting dual controls to a driving school car, then that car must be 'reasonably fit' for such specific purposes.

However, your rights under this Act do not extend indefinitely. Recent case law involving car purchase has determined that rights to reject extend only to 'about three weeks' when a car is bought outright, but can extend to six months in cases where a car is bought on finance. You can also take advice on such points of law from your local council Trading Standards Officers.

A case might be made to 'commit' your troublesome new car as not being 'fit for the purpose' of a driving instructor, who obviously needs a training vehicle which is reliable and properly functioning at all times, in order to be able to provide a reliable and professional service to his clients. If you reject the car under the Act, then you can either 'have your money back', including re-supply of any unsold trade-in vehicle (i.e. by 'unwinding the deal'), or you can agree to accept a replacement vehicle. However, you will not be entitled in law to 'betterment', i.e. to be in a better position at the end of the day than you would have been in if your car had not gone wrong at all. This means that a replacement car supplied by the dealer would only have to be 'of equivalent age and mileage' even though your car was originally supplied new.

Finance schemes

There may be other problems if your car was purchased under a finance scheme. Since the finance company would then be the official 'owner' in such cases (even though you may be registered as its 'keeper'), only the finance company can exercise the statutory right to reject it on your behalf. First, you would need to inform the finance company that you are not satisfied with the vehicle and give your reasons in detail. Also, you might state that you have lost confidence in the ability of the dealer to repair your car and that you now wish them to assist you by rejecting the car as 'unfit for your purpose' under the Sale and Supply of Goods Act. There may be a problem in convincing them if the finance deal is with a finance company owned or closely associated with the motor manufacturer. This is where the DIA can help.

We're here to help!

If fully briefed to assist, we can add our weight and persuasion in direct communication with senior managers at both the finance house and the motor manufacturer. If DIA assistance is required, then we would need details from your finance agreement, as well as full details of the car and a chronology of the faults as previously explained.

Revision of article first published in Driving Instructor ­ February/March 2001 issue.