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Guide to Cars Sold On ‘Sale Or Return’ 2019

“Sale or Return” (SoR) is a relatively common way that sellers can take advantage of the increased marketing and promotional power of a motor trader or dealership to sell a vehicle on their behalf. It is also often used within the motor trade itself, where both new and used cars can be moved between traders to take advantage of factors such as location and availability to match clients with vehicles and so on.

Car Sales or ReturnHowever, it’s important to understand the various implications of entering into such an agreement, especially any legal and contractual obligations, and it’s vital that both parties sign a formal agreement stating the terms of their deal so that there is paperwork and a traceable record should any disputes arise.

For private sellers, using the power of a dealership or trade seller can offer various advantages – a much bigger prospective audience for selling their car, advertising both at the dealership and in local and national press. They also remove themselves from the usual hassles that come with private car sales, such as test drives, insurance concerns and getting people interested. The seller would agree a fee with the dealer (either a fixed price or percentage of sale) and leave it to the dealer to advertise the vehicle, keep it clean, arrange insurance for test drives and time on the forecourt etc. If a sale is not achieved within an agreed amount of time, the vehicle can then be returned to the original seller, who would continue to own the vehicle privately and use their own insurance policy.

Should a sale take place, a trade dealer would also then assume legal responsibility for that sale, so that if there is a subsequent problem, it is up to them to resolve it on behalf of the buyer. However, there are a couple of caveats here, particularly around false or misleading information that may have been supplied, so it’s important to understand these points.

If the buyer discovers a vehicle fault after completing the purchase at any time after October 1st, 2015, there is a right to return the car under the Consumer Rights Act. This gives buyers a 30-day window to return the vehicle for a full refund should the vehicle have a defect which was not reported at point of sale or if one develops that you wouldn’t anticipate for the vehicle’s age or mileage.

Once past that 30-day period, the Act entitles the buyer to ask for either a repair (the usual route) or a replacement vehicle at no cost. If the period in which the fault develops extends up to six months after purchase, it’s the seller’s responsibility to prove the fault didn’t exist at point of sale, but after those six months, the buyer must prove such a fault existed in order to make a successful claim.

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If the vehicle has been misrepresented, for example the buyer discovers falsified documents, incorrect mileage or made claims about the vehicle that weren’t true (like stating the vehicle had never been in an accident when you can prove it was), then you can legally ask for your money back from the seller or for financial compensation while keeping the car. Note that having a warranty makes no difference to this point – if a car has been misrepresented, you do not need to have it under warranty to have repairs made free of charge or money refunded. You can also claim money back against the credit card company using Section 75 of the Consumer Credit Act if you purchased the vehicle on such a card. 

Please note that if you are selling a vehicle through a motor trader under sale or return guidelines, these points should form part of your agreement with the motor trader and should exempt you from any claims, unless of course the source of misleading information about the vehicle or its history came from you – in which case you can be held liable.

Good advice for any buyer, whether through a private sale or a motor trader, is to make some checks ahead of handing over money – for example checking the vehicle identification number is present and correct, and using the DVLA website (or private companies where applicable) to carry out checks on the vehicle’s history. If you are taking part in sale or return as a private seller, make sure you have a signed agreement with a motor trader which sets out their obligations and states who is responsible for things such as costs, advertising, registering the sale and any comeback afterwards.