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Second-hand cars market study: question and answers

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What has prompted this study?

This is a very significant market for UK consumers and the economy.  
Buying a car is for many people the largest and most stressful transaction after buying a house.

The study has been prompted by:

  • the number of complaints received by Consumer Direct each year, and 
  • concerns that consumer satisfaction in this market remains low - Consumer Direct continues to receive a flow of complaints from consumers who have experienced problems.

Against this background we want to undertake a short, focussed study looking at how consumers are served by this market, and how well the existing regulatory framework protects consumer interests. We hope to clarify whether existing consumer protection legislation is sufficient and effective.

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What is the size of the market?

Sales of £35 billion in 2008 from the sale of approximately 7.5 million cars.

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What will the scope of the market study be?

This short study will be looking at the entire second-hand car market but our focus is to investigate what causes such a high level of complaints and, if these point to a particular area of consumer detriment, what could be improved. Sales by independent dealers have historically been the largest source of complaints.

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Does this study cover the whole of the UK?

Yes, we will consider the whole of the UK.

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From whom do we want to invite comments?

We will be contacting key stakeholders in the next few weeks. However, we would like to receive comments from all interested parties. 

If you have a complaint about a second-hand car or a transaction involving a second-hand car please call Consumer Direct on 08454 04 05 06, or visit the Consumer Direct website.

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How long do we expect the market study to take?

We are planning to finish by the end of January 2010.

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What are the possible outcomes of the study?

The purpose of the study is to firstly investigate the cause of such a high volume of consumer complaints and then to consider whether existing consumer protection legislation is sufficient and effective.

Possible outcomes of the study include:

  • working with our trading standards partners to improve consumer protection in this area
  • giving the market a clean bill of health
  • publishing information to help consumers
  • encouraging an industry code of practice
  • making recommendations to the Government or to sector regulators, and 
  • investigation and enforcement action against businesses suspected of breaching consumer or competition law.

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Is this connected to the announcement in the budget of a £2,000 car scrappage scheme?

No. The study is concerned with the same market but is not related to the car scrappage scheme. 

The study is primarily concerned with consumer protection issues. The market appears not to be working well for some consumers: we are hoping to identify the source of these problems and help find ways of reducing the cause of complaints.

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Will the study cover new cars?

The study will not cover new cars. Most complaints have arisen from the sale of second-hand cars.




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