Navigating the rules and regulations of distance selling

Ever since the first UK wide lockdown, the automotive retail sector has pivoted to dramatically increase its capacity to sell remotely, with many retailers now offering Click & Collect and Home Delivery.

With further COVID restrictions now in place across the UK and lockdown now in force in England, we spoke to trading standards expert Peter Stonely and Nona Bowkis, legal advisor at Lawgistics to help you gain more clarity on the rules and regulations around distance selling – helping you to have more confidence in selling remotely through the pandemic and beyond.

What’s the difference between selling in person and remotely?

Peter begins by explaining that one of the most crucial differences between an in person and distance sale is that a buyer will have a 14-day return period which begins once the buyer has taken delivery of the vehicle. This is a legal requirement for all remote sales.

Peter also pointed out that for a distance sale you need to be sharing much more information with buyers prior to the sale including the right to cancel, returns policy, usage when it comes to test drives.

What is classed as distance selling?

We had over 250 questions submitted to Peter and Nona with one of the main themes coming out being around what is considered a distance sale and so must adhere to distance selling regulations. Peter clearly defines a distance sale as being based on where the deal is done and as one taking place off the sales premises with a “virtual handshake” i.e. completed online and out of the forecourt.

Click & Collect and Home Delivery, which are the only means of sale for retailers in England, are therefore both remotes sales.

Both Nona and Peter explained that these rights cannot be removed by a disclaimer and failure to communicate the 14 day right to cancel period, to a buyer through contract or on your website, will mean that they automatically have 12 months to cancel. They highly recommend having 14 day right to cancel on your website as well as sent to the buyer via email and/or post.

An example of a right to cancel document can be found by clicking here

Highlighting the difference between the distance selling act and consumer rights act, Peter explains that the distance selling act enables the 14-day return period where as the consumer rights act means that a buyer has the right to return a vehicle that does not match the description and/or is faulty (and the buyer was not made aware of the fault). This is why the accuracy of descriptions is critical to enabling successful remote sales.

Should I be worried about returns?

In short no. Whilst Nona reveals that many retailers have been concerned about the 14-day return period she is quick to point out that returns are rare and are simply part of remote selling that retailers must adapt to. Despite this she recommends that retailers create a robust set of returns terms and conditions to ensure an easy returns process for both the buyer and retailer. Within these terms Nona recommends that retailers set out how many miles can be covered within this period and what charges will apply should the vehicle be returned with excess mileage e.g. charging £1 a mile if a vehicle is returned with mileage exceeding the figure in the contract. The number of miles permitted to be covered will need to be considered reasonable but there is no pre-defined number. The condition that the vehicle must be in upon return must also be stipulated and Nona also suggests adding a clause as to who’s responsibility it is to deliver the returned vehicle to the forecourt i.e. the buyer must return the vehicle in the event they initiate a return. 

If a vehicle is returned you will be required to refund the buyer in full, if they have adhered to your returns policy. However, if the vehicle was purchased on finance then the retailer will need to liaise with the finance company to enable the refund of funds paid. Most finance companies will already have a facility for returns in such instances.

Can I still offer test drives?

Whilst test drives can’t be taken from forecourts, Nona points out that retailers are able to take a vehicle to a potential buyer’s home and allow them to take a test drive from their home.

When it comes to test drive usage, there is no pre-defined limit set out for how many miles a potential buyer can cover on a test drive. It’s therefore critical to clearly outline in your distance sales contract how many miles are considered reasonable for a test drive. Peter’s top tip is to consider what would be considered reasonable for a test drive in normal conditions as your benchmark.

How can I safely allow collection?

When it comes to the legality of buyers collecting a vehicle, Nona confirms that buyers are allowed to travel to collect a pre-purchased vehicle however test drives taking place from the forecourt are a breach of restrictions in England.

Nona also highlights that a premises car park can be used for the collection element since regulations state that car parks can be used as a collection point so long as a deposit or payment has been made prior to collection.

To avoid any potential scams from a distance sale, Nona advises retailers to use bank transfers to take payment as the safest way to take a payment. Card payments are still safe but Nona advises that you should take a name along with the details to enable banks to initiate a cross check.

 For more information, read our Motor retailer’s guide to the consumer contracts regulations by clicking here

 You can watch the full webinar which includes the Q&A with Peter and Nona by clicking here