A new court ruling in South Africa has reinforced consumer rights when it comes to used car purchases, penalising a dealer for not disclosing the full state of a previously-owned vehicle when it was sold.
In the case, a used car was sold online to the purchaser and not subjected to any detailed inspection by any of the parties to the sale.
The buyer relied on the disclosures made on behalf of the seller and subsequently accepted the multi-point check report at face value. As it turned out, however, the vehicle had a damaged chassis from being previously written off and was not mechanically sound.
Unable to resolve the issue with the dealer he purchased the vehicle from, the buyer took the matter up with the Motor Industry Ombudsman of South Africa. A complaint was filed, but no resolution for the complaint could be found, so the matter ended up in court.
The buyer approached the South African Motor Body Repairers Association (Sambra), which provided an assessment from an independent specialist assessor, who found twenty defects in the vehicle.
During the course of his inspection, it was established the vehicle was, prior to the sale to the buyer, involved in a major accident, to the extent that it was written-off, stocked at a salvage company – and sold at an auction and “put back in the market”.
The assessor confirmed the casual observer would not have seen these major defects as they were not visible to the naked eye. This evidence was presented in court.
In dealing with the matter, the Gauteng Regional Court ultimately ruled in favour of the buyer.
The court ruled that in the preservation of a consumer’s right to be informed of the actual condition of a vehicle when planning to buy, the dealer should refund the consumer the total outstanding financed value of the car plus interest.
This comes despite even the selling dealer being unaware of the fact that the car sold was previously ‘written off’.
Good news for other buyers
Sambra’s national chairman Charles Canning, welcomed the ruling, saying that the organisation has been actively lobbying the South African Insurance Association (SAIA) for several years over similar matters.
The group wants SAIA to publish a vehicle salvage database (VSD) that would inform all prospective buyers of important information regarding a used car. SAIA has said that a vehicle salvage database would be published towards the end of the first quarter of 2023.
According to the Automobile Association of South Africa (AA), a VSD system contains information on salvage vehicles. These vehicles have been deregistered by the respective insurers and thus declared salvage after policyholders have been indemnified of their motor claims.
“This will ensure that the buyers of used vehicles have access to and will be fully aware of the condition and status of the vehicle,” said Canning.
“It will prevent situations such as that which the Gauteng Regional Court has had to rule on and ensure that consumers are fully aware of the condition and safety of the vehicles that they buy,”
Canning said that a car is written off by an insurer when it is deemed uneconomical to repair – the costs associated with the restoration of the vehicle exceed a certain percentage of the value of the vehicle.
“When this happens, the vehicle should be re-coded on the National Traffic Information System (NaTIS) as a Code 3 vehicle, which will inform any future or prospective buyers of the damaged or salvaged vehicle, which will require extensive expenses to restore”.
He added that “typically, insurers dispose of these vehicles at auctions where they are then bought and repaired, often to sub-standard specification, by unscrupulous repairers, and subsequently sold onto unsuspecting consumers”.
Jakkie Olivier, the CEO of the Retail Motor Industry, said that unroadworthy or poorly repaired vehicles are a leading cause of road deaths in South Africa.