Introduction
Used car advertisements invariably emphasise positive features only. Prospective purchasers are told about performance, low mileage and service histories. Information that might discourage a consumer from purchasing the car is usually completely absent even though the dealer may know that a car was previously written off or involved in a serious accident.
This raises an important question: should information of that nature be brought directly to a consumer’s attention? Should it brought to their attention before they even decide whether to engage with a dealer?
The Importance of Informed Decision-Making
One issue that frequently arises in practice concerns vehicles with a previous write-off history. In some cases, that history is not mentioned in the advertisement or during negotiations. Instead, it may appear for the first time in sales documentation presented at the point of sale. Sometimes disclosure is made using industry terminology, such as Category C or Category D, which many consumers may not readily understand. Sometimes important details about the car’s history are not disclosed at all.
Much of our modern consumer protection law is built around the idea of the informed consumer. We regularly hear warnings that “the value of your investment may go down as well as up” and many will remember the bewildered man on the bus who said “I don't know what a tracker mortgage is”. The concept behind these messages is a simple one which is that important consumer decisions require clear information.
The same principle applies to the motor trade. Information about a car’s history can be every bit as important as information about its specifications, torque or trim.
Consumer Protection Legislation
An important piece of legislation governing business-to-consumer transactions in Ireland is the Consumer Protection Act 2007. The Act prohibits unfair and misleading commercial practices. It also deals with “false, misleading, or deceptive information”. A car dealer’s commercial practice would be deemed misleading if it includes false information related to a car’s usage or history and which led a consumer to make a decision the consumer would not have made otherwise. The Consumer Rights Act 2022 further strengthened consumer protections and reinforced the obligation to provide consumers with key information before purchase.
The CCPC’s Position
The Competition and Consumer Protection Commission (“CCPC”) is a statutory body responsible for promoting compliance with, and enforcing, competition and consumer protection law in Ireland. The CCPC reports that it is contacted by thousands of consumers each year regarding problems with used cars, including hundreds who believe they purchased cars that had previously been crashed without that fact being brought to their attention. The scale of this issue is massive. According to the CCPC, such cars may be unsafe or require significant expenditure to make them safe.
Recognising the importance of transparency, the CCPC has called for a free online portal providing consumers with access to key car history information, including write-off status and mileage readings.
Why Advertisements Matter
While greater access to car history information would be welcome, there is a compelling argument that we should go further by imposing certain positive obligations on car dealers. For example, certain matters should be disclosed in advertisements. A consumer should not have to uncover facts of fundamental importance through independent investigations or through putting questions to a dealer. If a car has previously been written off, sustained significant accident damage, undergone major structural repairs or suffered flood damage, those matters should be disclosed clearly and prominently in the advertisement.
Protecting Yourself
Until we see change, consumers should undertake their own due diligence. They should ask questions, carry out car history checks and obtain inspections where appropriate. They should ask directly whether a car has been involved in an accident or if it has sustained flood damage and they should seek to have any assurances recorded in writing.
The CCPC suggests the following important questions to ask the seller when buying a car:
- Has the car ever been crashed?
- Is the mileage correct?
- Is there any outstanding finance on the car?
- Have you carried out the appropriate checks on the car and are you satisfied that the car has no major faults?
- Has any bodywork or major mechanical work been done (by you or by others)? For example has the engine been replaced? Is this unusual given the age and mileage of the car?
- Is it an import? If so, ask for the original registration number and do an online check.
- Does the car have all the features you would like? Imported cars may have different safety features than you might expect for example.
The CCPC website also includes a useful Car Buyer’s Checklist where the answers provided to these questions can be recorded.
Conclusion
The law increasingly recognises that consumers are entitled to information that enables informed decision-making. The CCPC has made clear that businesses must not mislead consumers or withhold important information relating to a car’s history.
Access to car history data through a public database would undoubtedly improve transparency. However, where information is capable of fundamentally affecting a consumer’s decision to purchase a car, there is a strong case that it should not merely be available on request or discoverable through research. There should be a positive obligation to bring such matters to the consumer’s attention early and in the most upfront and transparent manner possible.
For further information, please contact Raymond Lambe or your usual OSM Partners LLP contact.
