Hi, just wondered if anyone has come across anything remotely like this or has any advice at all. I am going to call Trading Standards (well, the Citizens Advice bit that you have to call first, anyway) on Monday as in their infinite wisdom they are not open at weekends when people can easily contact them...) but in the meantime thought online might be worth a shot.
I live in the UK and bought a car from an independant used car dealership a week ago, and as soon as I got it home noticed a coolant leak. Took it back the next day, and it has been in the garage since. I asked for a refund but they said they needed to wait for the report from the garage first before they knew if that would be possible. They eventually sent it to a VW specialist who has diagnosed the head gasket needs to be replaced. The garage said they will replace it and also replace the cambelt and I will have the car back in about 6 more days. I said that as it's a serious problem and the car was not fit for purpose when I bought it, I am no longer I interested, and just want a full refund.
The garage responded that ordinarily they would be fine to do this, but they literally don't have the money. They said they bought two high value cars based on a promised interest, but the deal fell through. I asked when they would have the money then, and they said they don't know. They are going to call me on Monday. Throughout the conversation they were pushing me to accept the repaired car.
I am at a complete loss as I was never expecting them to say they WOULD give the refund IF THEY COULD. I don't believe for a second that they don't have the money but don't know what to do! I am worried that if I aggressively continue to demand a refund, they will just still refuse, and may not even repair the car properly or replace the cambelt as a result (that was an optional extra replacement on top of the head gasket that they were going to 'throw in').
I guess the main problem is that I haven't yet been able to speak to Trading Standards, and there is NOTHING online which spells out CLEARLY what your rights ACTUALLY are. Everything says something along the lines of you are 'entitled' to a 'refund, repair or replacement'. Well does that mean that they can just do the repair, and don't have to give me a refund, even if I insist?
No one I've spoken to has ever come across a garage trying to pull something like this. The best advice I've been given so far is to give them until Thursday to get the money together, then if they don't, take it further. Small claims court? Legal action? Will that work, how much will that likely cost, will my legal costs be paid for me if I win?!
I have called the non-emergency police number for advice, but that basically amounted to 'speak to Trading Standards'.
Any advice would be appreciated!
Thanks
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P.S. it's a 2002 Fabia with 90,000 on the clock, £1.5k.
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http://www.honestjohn.co.uk/faq/consumer-rights/
CAB are vounteers and may, but don't have to, work weekends SFAIK
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Trading Standards will not get involved in a civil matter between you and a seller - only something criminal. This is a civil matter so they might give you a leaflet or something but won't actually do anything for you.
Ultimately, it is for you to persue from the seller. Of course, if they really haven't got any money then they won't pay you and can ultimately declare bankruptcy or if a Ltd company go into liquidation. At that point you are just another creditor - possibly amongst many.
If they are indeed bankrupt you'll get nowhere (there are a lot of Rover and Saab owners who didn't get far with their warranty claims either!). However, it seems if what they are saying is true they are not technically bankrupt but have no liquid assets.
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. I guess the main problem is that I haven't yet been able to speak to Trading Standards, and there is NOTHING online which spells out CLEARLY what your rights ACTUALLY are. Everything says something along the lines of you are 'entitled' to a 'refund, repair or replacement'. Well does that mean that they can just do the repair, and don't have to give me a refund, even if I insist?
That's because no one knows in many cases. Each case is unique and requires a unique judgement from a court. Trading Standards cannot state what your rights may nor may not be in such a case beyond giving guidance. Generally, if it is accepted it is the sellers responsibility they have the right to choose to repair it and you cannot insist on a refund. Only if they can't fix it after a reasonable time and number of attempts do you have right of refund.
TS are some use in the case of misrepresentaion (e.g clocking) or dangerous cars but not a lot otherwise.
Edited by pd on 16/11/2013 at 19:17
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How about this? .......
https://www.gov.uk/wind-up-a-company-that-owes-you-money
It could be argued that by saying they can't afford to refund you, they are implying that they would refund you if they could afford it. So if they can't afford it, that would mean they can't meet their liabilities, and so cannot continue trading.
Edited by Sofa Spud on 16/11/2013 at 19:31
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How about this? .......
https://www.gov.uk/wind-up-a-company-that-owes-you-money
It could be argued that by saying they can't afford to refund you, they are implying that they would refund you if they could afford it. So if they can't afford it, that would mean they can't meet their liabilities, and so cannot continue trading.
They're not necessarily insolvent because they haven't the cash. Many businesses (and people!) do not have cash to meet unexpected commitments but they're not insolvent on paper.
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If a company can't meet it's liabilities, expected or not, then it's insolvent, no debate - any assets not instantly realisable would be used to settle creditors claims in Bankrupcy.
That's why some companies go into Adminstration rather than directly into Receivership, as Administration buys time to restruct debts.
Edited by RT on 17/11/2013 at 11:46
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Indeed the company might not be insolvent, but the mere suggestion of a winding-up order might make them pay the refund, given that they have implied that the reason they couldn't give a refund was because they didn't have the money, rather than because they weren't liable.
Edited by Sofa Spud on 17/11/2013 at 13:38
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Indeed the company might not be insolvent, but the mere suggestion of a winding-up order might make them pay the refund, given that they have implied that the reason they couldn't give a refund was because they didn't have the money, rather than because they weren't liable.
A winding up order should be the last resort in any debt situation IMO. The creditors don't usually get much after all the costs have been paid and the creditor who forces the winding up order has no priority over any other. The big winners are usually whoever handles the insolvency.
Winding up orders usually get issued by a creditor who has credit insurance and forcing the debtor into insolvency is usually a requirement of being able to claim on the insurance.
Many small businesses literally live day to day on cash (and some medium the large ones too) and this sounds such a case.
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Many small businesses literally live day to day on cash (and some medium the large ones too) and this sounds such a case.
You seem to think it's acceptable in this example, I don't and neither does the law.
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Many small businesses literally live day to day on cash (and some medium the large ones too) and this sounds such a case.
You seem to think it's acceptable in this example, I don't and neither does the law.
I'm not saying it is acceptable or not. Just the way it is. Your bank hasn't the cash to pay everyone out if they ask either. It is all tied up in not very liquid assets (or in some bank's cases worthless assets!).
There are liquidity requirements for some businesses (banks being one) but not for general businesses.
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Many small businesses literally live day to day on cash (and some medium the large ones too) and this sounds such a case.
You seem to think it's acceptable in this example, I don't and neither does the law.
I'm not saying it is acceptable or not. Just the way it is. Your bank hasn't the cash to pay everyone out if they ask either. It is all tied up in not very liquid assets (or in some bank's cases worthless assets!).
There are liquidity requirements for some businesses (banks being one) but not for general businesses.
Banks and building societies can/do get declared insolvent when everyone wants their money at the same time.
In this case, the company say they don't have the cash to pay the claim - that makes them insolvent.
There's a requirement for businesses to stop trading if they're insolvent
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There's a requirement for businesses to stop trading if they're insolvent
Yes, there is, but it is often a grey area. Many, many businesses are technically insolvent for a few hours or days on a very regular basis. For example, if a business has a 30 day old debt do they write that off as a bad debt and declare insolvency if it is paid one day late? In reality, no.
In reality very few cases of trading whilst insolvent are brought ever year and they're usually blatant ones and/or by people who have done the same things 10x previously. Even fewer ever get to court with the Directors concerned usually agreeing a voluntary ban (MG Rover be a prime and motoring example). It is not usually in a creditors interest to see a debtor be declared insolvent as that usually kills any chance of any money ever being paid. Insovency is usually forced by HMRC, a creditor with insurance or the directors put the company into Administration.
I think many would be surprised of just how little cash even large main dealers operate on. Most of their stock is on stocking or manufacturer supported finance and the actual cash pot quite low.
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Every business no doubt relies on not having to refund customers, at least not a significant proportion of turnover - whether it's good customer service or down to luck that most businesses need to refund very little of their turnover. This is precisely the reason liquid assets and longer term assets are accounted for separately but if you use cash income to buy a longer term asset and then can't meet a valid demand for a refund then the business is insolvent.
In this particular case it sounds like a BS excuse for not making the refund - if it is the real reason, most businesses wouldn't say so - it may not be the real reason though.
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In this particular case it sounds like a BS excuse for not making the refund - if it is the real reason, most businesses wouldn't say so - it may not be the real reason though.
Agreed. The ironic thing is the OP isn't even entitled to request a refund yet as the garage is within their rights to try fixing it!
Stock cars are usually just accounted for as any other "stock in trade" when accounting for car dealers so are not considered long term/capital assets - only in the case of any cars kept over a year are they accounted for as capital purchases.
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it's a 2002 Fabia with 90,000 on the clock, £1.5k.
If it were me I'd simply accept the repaired car - a lot less hassle.
It's basically a banger, 1500 quid & 11 years old with 90K (at least) miles. Whilst I have sympathy for you, it's not nice to buy a car and discover a fault, but at this end of the market you have to be realistic. Yes you have rights but taking action via the small claims court will draw out the process and if judgement is awarded against the garage they still might not pay and you will have to invoke baliffs etc and may have to accept payment by installments etc.
It's not as if the garage has refused to put it right - then of course you would have no choice - but if they fix the HG and replace the cambelt on an 11 year old car then that's a decent result IMO.
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A winding up order should be the last resort in any debt situation IMO. The creditors don't usually get much after all the costs have been paid and the creditor who forces the winding up order has no priority over any other. The big winners are usually whoever handles the insolvency.
Quite, it may look awfully inviting that you can apparently wind a company up then shake your money out of them, but it doesn't work that way.
My former employer was made insolvent this year, I have since received all documents regarding creditors and the vast majority will receive nothing. The administrators themselves will be the first to be paid, out of all the companies creditors, HMRC will be top of the pile if they're owed anything. After them it's the council authorities and all the rest of officialdom.
If there's anything left, then any major lenders - a bank - will be first in line. Minor creditors like customers owed a few hundred, will likely never see it again.
Most creditors of MFI have still not been paid to this day.
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it's a 2002 Fabia with 90,000 on the clock, £1.5k.
If it were me I'd simply accept the repaired car - a lot less hassle.
It's basically a banger, 1500 quid & 11 years old with 90K (at least) miles. Whilst I have sympathy for you, it's not nice to buy a car and discover a fault, but at this end of the market you have to be realistic. Yes you have rights but taking action via the small claims court will draw out the process and if judgement is awarded against the garage they still might not pay and you will have to invoke baliffs etc and may have to accept payment by installments etc.
It's not as if the garage has refused to put it right - then of course you would have no choice - but if they fix the HG and replace the cambelt on an 11 year old car then that's a decent result IMO.
Perfectly good answer I glad somebody has picked upon the fact that they do not have to refund the money they are permited three attempts at repair before a refund can even discussed.
Edited by Collos25 on 18/11/2013 at 09:57
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I too would take the car after it has been properly repaired. A new cam belt (and water pump, make sure they do that too) is easily £300+ which is something you might have had to do with the car further down the road. A new head gasket and new coolant in the system is another bonus from this messy situation.
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