Garage says they don't have the money to refund my car!?

dylan101

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

arcon5

How long have they been trading?
Are they sole trader or Ltd?

You've identified the problem already - you may legally have a right to reject the car, but if this pushes them in to insolvency you could also potentially loose out altogether. So some research on the company and possibly an analysis of their trading practices and ethics would help make a decision.

New HG and cambelt doesn't necessarily sound like a terrible deal - if the HG isn't the result of a different fault that is. Although i'd be asking how they can afford this major repair..... and it is major, will likely cost them the best part of a thousand quid

What age and mileage is it?

agrinnall

How did you pay for the car? If you used a credit card for any part of it then the issuer is jointly liable so if the garage does fold you can still get your money back, It's less certain if you used a debit card but you still have some chance that they will repay you if necessary.

inmypocketnottheirs

agrinnall wrote: »

How did you pay for the car? If you used a credit card for any part of it then the issuer is jointly liable so if the garage does fold you can still get your money back, It's less certain if you used a debit card but you still have some chance that they will repay you if necessary.

Visa cover debit cards as well as credit cards. Although banks try to dodge the refunds 'bullet' the Visa indemnity will cover a purchase. The bank may very likely try to deny their responsibility but usually persistence prevails.

agrinnall

inmypocketnottheirs wrote: »

Visa cover debit cards as well as credit cards.

Not under S75 though. Chargeback is certainly a possibility but it is a lower level of consumer protection.

tinkerbell28

I can't believe you called the police.

Personally I'd accept the repair.

It won't cost them that much, remember for jobs like that, the biggest cost it labour as it's a long job. If they've got an in house mechanic it won't cost them much financially.

If they've really got no money. Going to court is throwing good money after bad. Depends if you want to call their hand.

SuperHan

There is no need to involve the police as consumer law is a civil matter, not criminal.

You are right, the SoGA says you are entitled to a repair, replacement or refund. You can request which you would prefer, but the retailer can deny your request if it is disproportionately costly (as it appears to be in this case).
However, that said, there is also a 'reasonable' time given before it is deemed that you have accepted the goods. If you reject the goods before this time is up, you are entitled to a refund.
This reasonable time frame is not defined, and would have to be taken to court on an individual case basis to be so defined. It would normally be accepted that 1 day is within a reasonable rejection period, but used cars are normally sold as seen, so it may well not be the case here.

If the company does not have the money to pay, they may simply not have it. If they are a limited company you will be able to get a copy of their abbreviated accounts from Companies House which will probably give some indication as to their cash position (although bear in mind this could have changed given there will be almost a year since the cash position was reported).

If you take them to a small claims court and demand a refund, and they don't have the cash, the company will liquidate, and you will be looking at receiving maybe a penny for every pound of the refund, and no repair and no car, depending on how bad their situation is.

It's probably worthy to take the repair or you could end up much worse off.

tinkerbell28

Sold as seen does not apply to cars bought from dealers.