Fleet News

Be aware of new EU directive on vehicle reliability

It seems like an age ago now, but the proactivity shown by the big dealer groups over Christmas and the New Year set the trade up with a good start to the year.

Their advertising on television, radio and in the national and local press kept the impetus going. Where most of the country took an extended break the car sales staff were back in the showrooms at 10am on Boxing Day and worked straight through the festive season. The advertising apparently generated a good number of sales, which has had the big group buyers out and about in force, which in turn is keeping the auctions buoyant. On the other hand smaller dealers are only now really getting into their stride.

Despite the strong start, prices have remained steady. This differs from last year when prices were quite low at the start of January and took a couple of weeks to rise.

This year there have been few increases since the second of January. This is down to prices being high and buying activity strong back in December 2001. Also, it is the big players with small margins and high turnover that are now seeing buoyant sales – those taking little profit and offering value for money are the busiest. In fact the prices of some late plate cars have fallen since last January. A six month old Ford Focus or Vauxhall Vectra is now fetching around £600 less than a year ago.

This is confirmed by the rental companies, which have matched last year's sales for this time of year – but at lower prices.

One lesson I was reminded of during the cold spell is that anyone who has cars to sell in the wintry weather should try to make sure that they go to an auction with plenty of undercover storage. At auctions where most of the storage is outside the cars looked very sad in the New Year. Still covered in frozen snow, they were driven through the hall by drivers who had made a four-inch square hole in the ice to see through and cleared the windscreen on the near side enough for the lot number to be seen. As these cars entered a warmer atmosphere, and I use the word 'warm' cautiously as the temperature inside the hall was only marginally warmer than outside, it was enough to start melting the snow and puddles began to form.

Auctions do their best in these situations and little can be done to defrost hundreds of cars in one morning. But for later this year, maybe you need to find out which has the capability to keep your cars under cover and make them look the most presentable in the worst of weather conditions. It could prove beneficial. I have made a note to remind you of this in November.

A big development for the trade this year will be the implementation of the new EU Directive 1999/44/EC. This will affect all that supply both new and used vehicles because they will have to provide a warranty of two years and one year respectively. It will help prevent customers from being fobbed off with excuses when things go wrong. Regardless of what is sold or where, the directive uses the three 'Rs;' replace, repair or refund. This is a concern for those selling used goods because something that has been used before is never going to be as good as new.

Used car dealers will have to be doubly sure about the vehicles they are selling because if a fault develops within a six month period, it will be assumed that it existed at the time of delivery. And if a dispute arises the onus will be on the dealer to prove that it did not. This could well mean that pricing becomes even keener and appraisals more thorough, because anything in need of attention could prove to be very costly.

One grey area could arise when it comes to auctions. Anything sold at auction will not have to be guaranteed if it can be viewed, but this could lead to confusion around online or electronic auctions. Who has to provide the warranties for these vehicles and who will be responsible - the seller, or the people organising the sale on behalf of the seller?

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