Drivers aiming to save money by buying older cars need to be aware of some worrying practices in the motor trade, writes CAROLINE MADDEN

MUCH TO the chagrin of car dealers everywhere, more and more people are subscribing to the recession-friendly “bangernomics” theory, which boils down to saving huge amounts of money by eschewing a shiny new licence plate in favour of your trusty old banger.

While bangernomic converts may save money on depreciation and car repayments, regular servicing remains an unavoidable outgoing if they want to keep their motor on the road – particularly now that drivers without a valid NCT certificate could find themselves slapped with five penalty points. However, a number of worrying practices are coming to light in this area which consumer experts say are a sign of the times.

And for those motorists who do decide that the time has come to sell or trade in their car, there are also a number of scams to watch out for.

SERVICING

A number of complaints received recently by the National Consumer Agency (NCA) highlight the fact that car owners should exercise caution when getting their cars serviced.

One individual was given a quote of € 200-€ 300 to get their car serviced, but was told by the garage that the charge could turn out to be significantly higher depending on what problems were discovered during the service.

The customer claims that they were then asked to sign an agreement giving the garage the right to hold onto their car if they were unable to pay for the full cost of the service.

Although garages are obviously worried about people’s ability to pay if their service is more expensive than expected, Catherine Lenihan of the NCA says that it would be unfair to include such a term in a contract.

“They’re asking them to sign a contract that’s totally unfair, giving them a right over your possession,” she says.

Consumers should not sign such an agreement, she advises. Instead they should ask the garage to contact them with a full quote once the problem has been established to see whether they wish to go ahead with the work.

In another case reported to the NCA this did happen, but the customer was unhappy with how they were treated nonetheless. After dropping their car into a large motor dealer, the complainant received a call from the dealer to inform them that if they went ahead with the service, it would cost roughly 10 times the discounted price that the consumer had understood they would be able to avail of. According to the complainant, it was then suggested that they might like to speak to one of the dealer’s salespeople.

Both of these complaints are still under investigation, so the allegations are as yet unproven. Nonetheless, they illustrate the type of trends emerging in relation to car servicing.

“These practices are either unfair terms in the contract, or unfair practices or aggressive practice,” Lenihan says. “We’re glad that these issues have been brought to our attention.”

FINANCE

The NCA has also noticed a problem arising when consumers trade in cars. In some cases, where an individual still owes money on the car they’re trading in, the garage will factor this into the trade-in price and agree to pay off the debt outstanding with the relevant finance company.

However, what appears to have happened in numerous cases is that at some point down the line after the deal has gone through, the individual discovers that the garage has not, in fact, paid off the money owed on the car as agreed.

According to the NCA, this problem will not arise if the same finance company is used by the consumer when buying both the traded-in car and the new car, but if two separate finance companies are involved it could potentially occur.

So what can consumers do to protect themselves from this situation? First of all they should only deal with a garage if it is an authorised credit intermediary. The NCA authorises credit intermediaries and a register can be found on www.nca.ie.

Secondly, if your car has finance outstanding on it, try to settle this, if possible, before trading it in. This way you won’t be affected if, for example, the garage closes down.

If you do decide to trade in a car with the agreement that the garage will pay off the balance, you should immediately write to the finance company that provided the original loan informing them of this, the NCA advises.

If it subsequently turns out that the finance has not been paid off, contact the garage first to see what the problem is. If it hasn’t been paid within six weeks, the consumer should inform the NCA, Lenihan advises.

VEHICLE MATCHING

The European Consumer Centre (ECC) Ireland has received complaints relating to a number of different car scams. One issue that has been an ongoing problem since 2005 is known as “vehicle matching”.

Typically what happens is that an Irish consumer advertises their car online or in a magazine, with the aim of selling it privately. Within 24 hours they get a call from a UK-based company offering to “match” the vehicle with prospective buyers until it is sold for a once-off fee of around £99 (€110).

Another variation is that the company claims to have a buyer already. They just happen to be looking for the exact model of car that the person is selling, and are willing to pay the price they’re looking for.

“The company uses words like “guaranteed to sell” in the phone call and the consumer gives their credit card details to pay the administration charges, and the money is debited. A buyer never materialises,” explains Ann Neville, manager of ECC Ireland.

When the consumer contacts the company to complain that their car is still unsold, they are referred to the terms and conditions and are told that they are not entitled to a refund.

“The problem is that the terms and conditions on the company’s website state that they are not responsible for your vehicle not selling, but this is in direct conflict with their previous verbal promise,” she adds.

“Anybody selling a car should be aware that making payments to companies that offer to match sellers with potential buyers may not guarantee that a potential buyer will actually make contact. In fact you may end up paying a large sum for just posting another ad on the internet,” she warns.

WARRANTIES

“Another common problem reported by consumers to the ECC concerns warranties,” Neville says. Car manufacturers typically offer an initial warranty, but additional warranties are sometimes provided by local distributors or dealers.

In the UK many dealers offer this extra year’s warranty as part of their marketing campaign, Neville explains. “The question is, if you buy the car in the UK and bring it to Ireland, can you avail of the third year warranty where applicable?

“In principle, the answer is ‘yes’ as the warranty comes with the product and it does not depend on where you live,” she continues.

However a number of consumers have run into problems when trying to get assistance in Ireland under such a warranty. Some garages here have been levying supplementary charges for accepting the terms of the warranty.

Neville advises consumers to check the terms and conditions of the warranty in order to ascertain its scope.

It pays to check a car's history

VEHICLE CHECKS carried out by motor dealers on www.carhistorycheck.ie since last September revealed that there was finance outstanding on 60 per cent of Irish-registered used cars that the dealers were considering buying.

Almost 12 per cent of UK cars checked were also found to have debts outstanding.

The Car History Check website is a joint venture between the Society of the Irish Motor Industry (SIMI) and credit bureau Experian, and enables dealers in the motor trade to run checks on Irish and UK cars.

Even more worryingly, according to SIMI, 2 per cent of Irish cars, (and 5 per cent of cars imported from the UK), checked on the site since September had previously been written off.

These findings highlight the importance of carrying out background checks to make sure that there are no murky secrets lurking in a vehicle’s past before signing on the dotted line and collecting the keys.

Although the car history website can’t be used by consumers, according to a spokeswoman for SIMI, buyers can request a Car History Check certificate from a dealer before buying a second-hand car to get assurance that the vehicle has a clean history (e.g. that it hasn’t been in an accident, used as a taxi, stolen and that it doesn’t have finance outstanding).

Consumers can avail of a number of similar websites targeted at buyers, such as www.cartell.ie and www.motorcheck.ie, which allow individuals to run car checks for a small fee.