Beware of this new second-hand car scam

Consumers who want to buy a second-hand car have been warned to be very careful that they do not buy a car as scrap, because they then have no rights in terms of the Consumer Protection Act (CPA).

The Motor Industry Ombudsman of South Africa (MIOSA) has warned consumers about the new trend of some used-car dealers who tell consumers they are buying scrap when buying a second-hand car that is in running condition.

The Consumer Protection Act warranty

According to section 56 of the CPA, read with section 55, all goods sold to a consumer are sold with an implied warranty of quality that they cannot contract out of and nobody can revoke it. This warranty gives consumers the right to receive goods that:

• are reasonably suitable for the purpose they are intended to be used for
• are of good quality, free of defects and in good working order
• will be durable and usable for a reasonable period of time.

If the goods, or in this case the second-hand car, fail to comply with these requirements, consumers can within six months of buying it:

• return it and get their money back
• have it replaced
• have it repaired.

The consumer can choose any of these three options without paying a penalty and at the cost of the dealer.

ALSO READ: Write-offs being sold to unsuspecting used-vehicle buyers

“In terms of this warranty, dealers are obliged to repair or replace the car or take it back and refund the purchase price if the car is not reasonably suitable for its intended purpose, such as being able to drive and do it safely,” says Johan van Vreden, the Motor Industry Ombudsman.

He advises that consumers should bring any problems with the car to the dealer’s attention as soon as possible, although the warranty lasts for six months, because they will have a better chance to successfully claim their rights according to the CPA.

‘Voetstoots’ or ‘as is’

Before the CPA came into operation in 2011, when the transaction was subject to common law, an agreement of sale could include a “voetstoots” or “as is” clause. However, this clause did not hold the dealer liable for poor quality cars, unless the dealer did not point out the defects.

Now that these transactions are subject to the CPA, dealers are not allowed to rely on voetstoots clauses any more.

Buying scrap?

Due to the protection of the six month warranty the CPA offers to consumers buying second-hand cars, unscrupulous dealers have found another way to avoid their responsibilities and make more money – they sell the car to you as scrap.  Why? The answer is simple, to avoid honouring the warranty consumers are entitled to under the CPA, says Van Vreden.

“No matter what the contract and terms and conditions say, if a consumer goes to a dealer to buy a car, the dealer cannot pretend the consumer bought scrap. Consumers can be sure the courts and tribunals will not be fooled into believing that they bought scrap when they received registration papers for the car and the dealer is registered as a second-hand car dealer, not a scrap metal dealer,” he says.