Car dealers still taking customers for a ride

ARE car dealers’ taking us for a ride? The reputation for sharp practices could be justified, says Which? – despite new regulations that are designed to stamp out misleading sales tactics.

In October and November 2008, Which? mystery shoppers phoned and then visited 26 franchised dealers in four regions across England, following up on seven specific, advertised manufacturer offers for new cars. This undercover investigation by the consumer organisation found plenty of examples of poor, misleading or unclear advice. Of the 26 enquiries Which? made, 12 car dealers made dubious or vague claims, and four of these could have broken the new rules.

Some bad advice could be because dealers are ill-informed about manufacturers’ offers. But Which? suspected some dealers of using “bait and switch” tactics; advertising a car, despite knowing there’s no stock, with the aim of selling an alternative and then “pressure selling”, such as implying a false deadline for a discount offer or saying stocks are low.

One Peugeot dealer said on the phone he had a model that was advertised on its website. Just an hour and a half later in the showroom, the researcher was told the dealer didn’t have that model and was shown a different car. This seems like an example of “bait and switch”, but it is difficult to prove.

A Jeep dealer strongly suggested a special offer would finish at the end of that month (October 2008), despite the Jeep website saying it applied to any cars registered before 31 December 2008. The salesman claimed “there’s only about 10 left in the country”, although Which? found no apparent shortage from established online brokers.

David Evans Which? motoring expert is familiar with the workings of car dealerships, as before joining Which?, he spent five years working for franchised dealers. He also later spent 13 years working for car manufacturers, including direct liaison with dealers, so David also visited some of the showrooms.

He enquired after a Vauxhall Astra advertised on the dealer’s website, and was asked to take a seat while a salesman “checked stocks”. Without even disappearing from view, the dealer walked into a small office, then came straight back out. He then said he was sorry but that particular model was gone. He then went into full sales mode, offering a used Astra, with several thousand miles on the clock, for the same price.

David did have one positive experience out of four visits to car salesmen; a Vauxhall Astra dealer who actually had the car in stock that he claimed, but his overall impression was of “swimming with sharks”.

Which? is concerned that the new consumer protection rules can’t be enforced effectively as it’s so difficult to determine what is an unfair sales tactic and what is misguided advice.

Richard Headland, Editor, Which? Car, says:- “The ghost of Arthur Daley’s alive and kicking, unfortunately. Dealers have had ample time to get used to the new rules, but too many still let car buyers down.

Our investigation was just a snapshot, but we still found several examples of dubious sales advice. If dealers want to win the confidence of consumers, especially in these tough times, they need to play by the rules.”

Car buyers who believe a dealer has misled them should contact Consumer Direct on 0845 404 0506.

Did you know?

31 practices have been outlawed completely under the Consumer Protection (from Unfair Trading) Regulations. It is now illegal, for example, for a retailer to invite a prospective buyer to purchase at a specified price, without telling the buyer if it may not be able to supply the goods advertised. Making false claims has always been frowned upon, but now it is against the law, as is omitting vital information the consumer needs to make a purchasing decision. There are also legally binding guidelines on other sales techniques. These aren’t banned outright, but may be judged to be illegal if they mislead, are unduly aggressive, or in some other way lead to a consumer making a decision different to the one they would have made had they been treated fairly.

Which? is the leading independent consumer champion in the UK. We provide impartial, expert information on products and services in our magazines, books and online to help consumers make more informed choices, and we campaign on issues that matter to all consumers, from food to finances, health to estate agents. For more information on how we can help you, visit:- www.which.co.uk.

New minibus comes in to land at local centre for disabled

A new adapted minibus has made a happy landing at Vitalise Sandpipers in Southport, thanks to a generous donation by the RAF Benevolent Fund.

The official ribbon-cutting ceremony for the new, specially adapted vehicle took place at the well-known respite holiday centre for disabled people and carers on Southport’s Marine Lake on Tuesday, 27 January 2009.

The ribbon was attended by Martin Henshaw, Regional Director of the Royal Air Force Benevolent Fund, which provided funding to purchase and adapt the £44,000, state of the art 17 seater minibus. Also in attendance was Vitalise Chief Executive Jonathan Powell and Centre Manager Darren Holloran, together with staff, guests and volunteers at the Centre.

Darren Holloran, Manager of Vitalise Sandpipers, said:- “We are enormously grateful to the Royal Air Force Benevolent Fund for their generous donation. Here at Vitalise we pride ourselves on offering our disabled guests exactly the same choices as anyone else would expect on a well-deserved holiday. This new minibus will enable us to take our guests to tourist attractions and places of interest around the region in comfort and safety.”

Vitalise Sandpipers provides essential breaks for disabled people and carers from across the Northwest. The Centre offers 24 hour care on-call with personal support and can cater for over 150 different disabilities. Guests can choose from a wide range of activities and excursions around the region, with nightly entertainment laid on.

The Vitalise website can be found at:- www.vitalise.org.uk.

Mandelson announces support package for the Automotive Industry

ON the 27 January 2009 the UK Government announced a package of measures aimed at freeing up lending of more than £2bn for the automotive industry.

The automotive industry employs nearly one million people from manufacturing to retailing and contributes £10bn added value to the economy. It is a major contributor to research and development, and supports a supply chain and technology benefits for the wider manufacturing industry in the UK.

The elements of support that have been announced:-

► Guarantees to unlock loans of up to £1.3bn European Investment Bank (EIB) guarantees for investment in lower carbon initiatives

► Loans or loan guarantees to support of up to £1bn of lending for lower carbon initiatives for non-EIB backed projects

► Increased funding for training of employees under 'Train to Gain'

► Mervyn Davies, the new Trade and Investment Minister, tasked to draw up a plan for improving access to finance for manufacturers' finance arms.

Business Secretary Peter Mandelson said:- "Britain needs an economy with less financial engineering and more real engineering. The car industry can and should be a vibrant part of that future.

The steps we are taking today will help companies speed their way to becoming greener, more innovative and more productive. This is the route to securing jobs for the long term as we build a more balanced economy for Britain's future."

The measures include plans to agree a temporary framework with the European Commission to provide loan guarantees to UK automotive manufacturers and large UK automotive suppliers. These will be targeted at initiatives to reduce emissions and energy consumption.

The Government has already taken a series of actions to unblock bank lending to SME and mid-sized companies. This assistance will apply to projects over £5m from UK based vehicle manufacturers and automotive parts suppliers with an annual turnover of £25m or more.

Applications will be assessed on a case-by-case basis. The Government is committed to ensuring that anything backed by the scheme:-

► Offers value for money to taxpayer;

► Enables us to green Britain's economic recovery

► Delivers significant innovation in processes or technologies for the long-term

► Supports jobs and skills in Britain

The scheme will help ensure that major new low-carbon investment projects in the UK automotive sector are not abandoned or located outside of the UK because companies are temporarily unable to access sufficient funding from traditional sources of finance.

This announcement also includes a commitment from the Department of Innovation, Universities and Skills that automotive employers will be able to access high quality skills support, as well as funding to help pay for training; through the Train to Gain service. If there is the demand from the industry, the Department of Innovation, Universities and Skills Secretary will boost the funding to support new training to £100 million from its present £65 million. This offers real help to people - including workers in SMEs in the automotive supply chain.

The £50 million Economic Challenge Investment Fund being announced separately today by the Higher Education Funding Council also creates new opportunities for automotive employers looking to tap into academic expertise in improving business performance.

This recognises the value of skills and knowledge that exists in the auto industry and the need to develop Britain's capabilities in efficient, low carbon processes and technologies.

The UK already has a lean, competitive and highly skilled automotive workforce and this training funding will help keep the workforce at the forefront of skills and innovation.

Peter Mandelson also invited Regional Development Agencies to work with the Technology Strategy Board to bring forward a further step change in programmes for research and development into cleaner engines, lighter cars, plug-in hybrids and components for electric vehicles, building on the £110 million of support for research and development that was announced last September (2008).

Fact File:-

1. The Framework, which is subject to clearance by the European Commission, will be consistent with new temporary State aid measures announced by the Commission on 17 December 2008.

2. No date for the commencement of loans and loan guarantees under the framework has yet been set since it is dependent on Commission clearance, but we aim to start work with the Commission at once. In bringing forward its temporary State aid procedures for helping companies access finance, the Commission has made clear that it will aim swiftly to process Member State applications.

3. UK-based manufacturers of construction equipment (such as diggers and bulldozers) and suppliers that meet the criteria of the framework will be eligible to apply.

4. The package of measures announced will enable lending of over £2bn over the next two years.

5. The assessment criteria will be finalised when they are cleared with the European Union, but are likely to include:-

a) Value for money to taxpayer
b) Compliance with State aid rules
c) Viability of companies
d) Tied to R&D or capital expenditure within the UK
e) Evidence of having exhausted private sector sources
f) Repayable within 2 years
g) Further UK objectives on low carbon/green technology