Car Dealer Sells Insurance Write-Offs and Crash Damaged Cars

A much-reported recent investigation by BBC Rip-Off Britain revealed that “THREE of the UK’s biggest car dealerships have been selling insurance write-offs without telling buyers the vehicle’s been in a crash.”

The retail motor industry has been quick to point the finger at insurance companies and vehicle history information from third-party providers, such as HPI.

However, in my experience, buying and selling unrecorded damage repaired vehicles is nothing new and is viewed as a legitimate part of a car dealers profit opportunities, which will be readily exploited, if not actively sought.

Far from being hoodwinked, non-factory repairs, especially those resulting from impact damage are usually fairly obvious to professional car dealers and traders, who can spot the tell-tale signs almost immediately.

Crucially, rather than being filled with contrition, responses to complaints of misselling accident damaged cars are exemplified by that of a main dealer who wrote in an email “there’s nothing illegal about selling a car that’s had bodywork repair.”

Which brings me to consider what the legal rights are for a buyer who finds they didn’t get what they bargained for. To better understand your consumer rights when buying a used car, it is important to be aware of the relevant laws and regulations.

Most articles and dealers relied upon the vehicles being of satisfactory quality and use the vehicle having passed an MOT as a defence to any breach of the Consumer Rights Act, although neglecting to assess the “circumstances” and “appearance” as potential avenues for complaint.

Nevertheless, the two key issues arise on the one hand from failing to disclose information which would likely impact on the buyer’s decision and misrepresentation on the other.

In the case of the former, the dealer will aver that one cannot disclose what one does not know, although ignorance is no excuse, especially when dealing as a professional motor dealer. It is crucial for both buyers and sellers to be familiar with the car buying rights and regulations that govern the industry. In the latter, misrepresentation will be often met by motor trade legal firms with “non-disclosure cannot amount to misrepresentation,” which of course presupposes that nothing was said by the dealer and even if it were, they will tell you “it’s their word against yours.”

However, it would be a strange and perverse law that allows for consumer claims to be trumped by the simple presentation of these two apparent ‘get out of jail free’ cards.

In reality, the true position is expressed by the Canadian Court of Appeal in Midland Resources Holding Limited v. Shtaif stating the tort of deceit or fraudulent misrepresentation may:

“involve not only an overt statement of fact, but also certain kinds of silence: the half-truth or representation that is practically false, not because of what is said, but because of what is left unsaid.”

In this context, presenting vehicles with the inference that they are in manufacturer’s warranty and/or anti-corrosion warranty, is itself a false representation if the historical damage or repair has in fact rendered it void.

The bottom line is, that misrepresentation covers actions as well as words, and absent any evidence that the supplying dealer actually informed the customer of the historical damage or even the possibility of it having had any, dealers are going to struggle to defend a rejection claim. For more information on legal issues in car sales, including misrepresentation and disclosure requirements, explore our comprehensive automotive law resources.