MG Rover Warranty Issues Quick Facts
Main Points:
MG or Rover owners with manufacturer warranties who believe they have a claim under the warranty should in the first instance take up the issue with the dealer or supplier from whom they bought their car.
Warranty or no warranty, consumers have their normal rights under sale of goods legislation to expect that any goods they buy (including cars) are satisfactory quality. Responsibility in relation to these rights rests with the retailer, not the manufacturer.
If goods or services have been bought via a connected finance agreement, the finance company may also be jointly liable (with the supplier) under the contract of sale. Consumers may be able to look to the finance company to put matters right where the supplier has failed or is unable to do so. This might also apply where the provision of a warranty formed part of a transaction paid for or part paid for with a connected finance agreement.
Consumers can obtain free advice on their own concerns from:
- their local Citizens Advice Bureaux
- Consumer Direct
Note: The Department for Business, Enterprise and Regulatory Reform (BERR) is not able to intervene in individual disputes and cannot give detailed advice on the circumstances of individual claims or disputes. The following represents the views of BERR only and should in no way be taken to be legal advice or to be in any way definitive. Only the courts can decide on the application of the law in any individual case.
More detail:
WARRANTY/GUARANTEE
1. Where a warranty has been provided by a manufacturer, or a third party provider, it is a separate agreement (aside from the agreement between retailer and consumer for the sale of goods) between the manufacturer or third party provider and the consumer. The warranty is usually only enforceable against the manufacturer or third party provider (even though in the case of new car warranties it is usually the retailer network which actually provides the work and parts, the manufacturer or third party provider pays for that work).
2. The ability to enforce the agreement will depend on whether the party providing the warranty or guarantee is in a position to honour the agreement.
3. In the event that the manufacturer is no longer in a position to honour the warranty agreement, the retailer is unlikely to be under any obligation to provide any service under that warranty (there would be little or no prospect of that work being paid for by the manufacturer). However, independent of any warranty, consumers still have their normal rights under sale of goods legislation to expect that any goods they buy (including cars) be of satisfactory quality. These rights are enforceable against the retailer, not the manufacturer (see below).
4. It is important therefore to establish exactly who the warranty agreement is with. For example, second and third year warranties for cars are sometimes referred to as dealer warranties and it may be the case that the dealer or retailer, or a third party warranty provider, has obligations under those agreements, rather than the manufacturer.
5. If a warranty has been provided by a company which goes into liquidation, and the warranty is not backed by independent insurance, and the company is not in a position to honour the warranty, any claim by the consumer will be considered an unsecured, non-preferential debt (the consumer would need to make their claim known to the liquidators and would join the queue of creditors).
SALE OF GOODS LAW
6. The law relating to the sale of goods is set out principally in the Sale of Goods Act 1979. The Act applies to all buyers, but consumers are entitled to a greater range of remedies. ‘Consumers’ are defined as people who do not deal or hold themselves out to be dealing in the course of a business.
7. When goods are faulty and there is no separate warranty agreement or manufacturers guarantee, buyers can generally only obtain a remedy against the retailer. Buyers may also have additional rights against a credit card company or finance house if the goods are purchased, or part purchased by means of credit and cost more than £100 (see below).
8. Buyers are entitled to goods of satisfactory quality, taking account of any description, the price and other relevant circumstances. If an item has a fault that is present at the time of the sale (which may be a ‘latent’ or ‘inherent’ fault), the consumer can take the issue up with the retailer once it is discovered.
9. If a product that was not of satisfactory quality at the time of the sale is returned to the retailer, the buyer is entitled to a full refund (if it is within a reasonable time of the sale), or, if a “reasonable time “ has elapsed, to a reasonable amount of compensation. Any legal proceedings to enforce a claim must be started within 6 years of the date of sale.
10. Alternatively, consumers can choose to request a repair or replacement (the retailer can decline either of these if he can show that they are disproportionately costly in comparison with the alternative). If neither repair nor replacement is realistically possible, consumers can request a partial refund.
11. Generally, the consumer needs to demonstrate the goods were not of satisfactory quality at the time of sale. This is so if the consumer chooses to request an immediate refund or compensation. It is also the case for any product returned more than six months after the date of sale. There is one exception – this is where the consumer returns the goods in the first six months from the date of sale and requests a repair or replacement or a partial refund. In that case, the consumer does not have to prove the goods were faulty at the time of sale. It is assumed that they were. If the retailer does not agree, it is for the retailer to prove that the goods were satisfactory at the time of sale.
FINANCE AGREEMENTS AND CREDIT
12. Under section 75 of the Consumer Credit Act, a consumer may have the ability to enforce the contractual rights that he would have had against the supplier of goods or services, against the provider of the credit that financed the purchase of those goods and services.
13. Essentially, where there has been a breach of contractual obligations (for example, the goods are faulty or a service has not been provided) and where the supplier of the goods or services is not able to rectify the failure, the provider of the credit may be asked to assume joint liability with the supplier for the loss to the purchaser.
14. There are conditions:
– The transaction must be a debtor–creditor–supplier arrangement – i.e. the purchase must be financed by credit provided by a lender who has a relationship with the supplier. This will include where part of the purchase price has been paid by credit card.
– The transaction must be for an amount between £100 and £30,000. But the amount of finance does not have to cover the full amount of the purchase price – for example, the use of a credit card to pay a deposit.
Consumers who believe that they may have such a claim should contact their credit provider.