As i've mentioned before, i'm intending to start trading from home in the next few weeks. In line with my legal obligation to provide a 6 month warranty, i've been looking at some of the warranty company websites.
So, does anybody have any recommendations or advice on these warranties, from the point of view of either a trader or customer? All the websites are very convincing in their sales pitch, so unless people can offer their direct experiences it'll come down to picking one at random!
TIA.
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Have I misunderstood? Is there really a legal requirement to provide one of those 6 month warranties sourced from a warranty company?
Like you I'm thinking of trading from home so I asked my local trading standards what the legalities are. They say the Sales of Goods Act applies, so I must rectify (or refund some money for) any faults not pointed out at the time of sale, for a reasonable period, not necessarily six months.
By the way the chap at Trading Standards said very few traders ask for advice, he sounded quite chuffed to be asked, gave loads of advice then sent me a good info pack.
Good luck with the trading and please keep us posted
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Cheers Stokie - i've just this minute sent an email to the local trading standards to ask for advice - i hope mine are as helpful as yours!
I was under the impression that any faults found in a car within six months were assumed to be present when the car was sold, hence the trader must rectify these faults. At least this is my understanding - please let me know if i'm wrong!
This period does not have to be covered by an insurance-backed warranty, but i'm thinking that this will be the easiest method, especially initially since i'm only looking to sell 3-4 cars a month at first - a serious problem arising could easily wipe out profit very quickly! At least with one of these off-the-shelf warranties i'll know the costs involved from the start.
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A problem with a lot of these 'warranties' I've seen is that they cover a limited number of things that go wrong. You may find you're not covering yourself very well. Get a magnifying glass for the itsy bitsy tiny print.
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imo, far better option is put each car thru usedcarchecks on left
www.honestjohn.co.uk/redirect.php?www.usedcarcheck...m
which has some inclusive warranty.
will give private punters peace of mind.
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Are there no dealers out there who offer these warranties who are prepared to share their experiences???
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I use Warranty Holdings,very good for what they are but don't think by offering an insurance warranty that you have covered your legal obligations.When the punter has a problem with something thats not covered you will be expected to pay and if you refuse you will soon end up with a ccj from the local court,remember you're selling a used car,the punter thinks he has just bought a fault free brand new car,quite scarey really.
Also,if you have not organised it,get a Consumer Credit Licence,you cannot offer finance without it.
Without wanting to p on your fire,have you really thought about what you are trying to get into,i know now that i would not recommend the biz to anyone new,there are much better ways of earning a better living out there.
Good luck,and see how it goes.
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T Lucas - thanks for your info. I realise that there may be faults which occur which are not covered by the warranty which i will have to fix, but i'm hoping that the warranty will at least cover the more expensive problems.
I have not considered offering finance yet, i'm going to wait to see how things go before i get into that.
I also appreciate what you say about the difficulty of the business, again i'm going to give it a try and see how it goes. I'll still be working full time, so if it's going pear-shaped i'll still have that to fall back on. But if i don't give it a try, i'll never know.
On the subject of difficulties, i'd be really grateful if you were willing to give some more specific advice on problems you've had, and why you wouldn't recommend the business - the more prepared i am for the pitfalls, the better.
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Problems,where to begin?Cars these days have lots of expensive kit on them,remote central locking,a/c,power steering,sat navs,abs,and fancy HiFi all potentialy very expensive problems,when i started a MK3 1.6 Cortina had nothing,compare that to a 1.8 LX Mondeo,or any other car on the market.
The market is awash with used cars,anyone can go to a car auction and all they are intrested in is a low price,so there are many many clocked cars in the system to enable lower prices and a lot will end up with home traders with all the very expensive problems that Trading Standards will bring you.
Be very careful of dodgy bank drafts,BS cheques,personal cheques and of course funny money,do you think you can spot it?
Don't even get me started on part exchanges,they really are just best avoided.
Really comes down to how much you want to earn for the amount of aggravation you will have to endure.
And just to really get you thinking,nice to have punters coming to your house,paying you cash on a Saturday afternoon and breaking in for it when you go out Saturday night.Yes,it happens.
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Owen, cant answer your original question as I haven't started business yet. My view is that the warranty side of things isn't optional - it's mandatory even if the customer doesn't want it you almost certainly will!
Some chilling and useful advice from T Lucas - thanks from me as well!
Many years ago I used to to do some work for a used car dealer and remember chatting to one of the traders that occasionaly supplied cars. Most of the time he traded from home and, it has to be said, he bought terrible old cars! I think it is fair to say he dealt with the very low end of the market (old bangers for under 500 quid usually!) Anyway he had a few stories of dodgy punters and timewasters that he couldn't wait to get rid of! Always seemed to do alright though, I even bought my first car from him!! I just think it's worth staying out of the banger and P/X market even though some of the profit margins might seem OK.
I'm in a similar position as you, fortunate to have another career I can fall back to but really keen to try something else!
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I think warranties will actually cover very little of what you might be liable for.
Agree with Mr Lucas' comments - its a tough way to earn a living; you will learn a lot about human nature.
15-20 years ago I worked for a while selling cars off a small pitch. Many folks used to come along and pay £200 for a car (1980's prices) and bascially expect something 'good as new'. If the stereo 'chews tapes', rattle from under seat, small crack in windscreen (non MoT type) then a lot of customers will be back for it to be fixed.
I remember one well spoken lady turned up with her daughter wanting a first car - daughter only had about £100 to spend. There was a very nice Mini we had, good car and very cheap (within her budget), but the clutch was starting to slip. This was pointed out several times and I told her that if she bought it she should have clutch done ASAP - would cost about £60.
Anyway - couple of days later got a phone call. Clutch is slipping - what are we going to do about it - been sold defective vehicle - been to Citizens Advice etc. etc.
In the end it cost us more than the vehcile was sold for!
There are many other stories I could tell you.
If you are selling fairly cheap cars from home then keep some sort of defensive weapon in the house - you will find yourself dealing with the dark underbelly of society. Also watch out for middle-class women - they always want something for nothing, quoting the law and always off to Trading Standards etc.
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I'm a customer, not a dealer. My warranty explicitly excludes claims for items which were faulty at the time of purchase - I suspect that if something goes wrong within the first month or so the onus might be on the dealer to foot the repair bill even if a warranty has been taken out.
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I suspect you are right, Pete. Definiteley an area that requires much investigation of the small print!
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Owen,
Note new regulations come into force in January 2005 regarding the sale of insurance products. Specifically you will need to register with the Financial Services Authority (FSA). Once you have seen their application form and the cost, it may well make you rethink the whole subject. I suggest you talk to a warranty company to find our more. By now they will be advising their clients on the options avaailable. Warranty Holdings are supposely the biggest, but someone once said about them "if you swim with the sharks......"
Best of luck
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