THE motor industry has reacted angrily to proposed new European legislation which would give new or used car buyers sweeping new rights during the first two years of ownership. The proposals, expected to be approved next year, would allow fleets and private drivers with faulty cars to demand a replacement during the first 12 months of ownership, and a free repair if any problem arose during the second year.

The laws would also cover purchases from auction, and could come into force as early as next year. Vehicles with problems would have to be referred to dealers within a month to qualify for replacement. The changes would have significant implications for fleet disposals - especially for those cars under 12 months old. Many dealers will be unwilling to buy used vehicles unless they are certain they are fault-free.

Dealers and manufacturers claim the massive cost of funding the new consumer rights regulations would force up the retail cost of vehicles, and would work against customers in the long run.