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Motor Trade Legal News

Vehicle Test Drives

We have been made aware of an article in cardealermagazine.co.uk (see below) discussing the legalities of providing test drives within tier 4 lockdown, and have been approached by members looking to obtain advice as to whether test drives are legal, and if so how best they can be arranged.

Are test drives legal?

Whilst we agree that a test drive is part of a sales process, the question is whether one can be offered in a tier 4 lockdown. Section 16 of Schedule 3A of The Health Protection (Coronavirus, Restrictions) (All Tiers) (England) Regulations 2020 states,

16.—(1) A person responsible for carrying on a business in the Tier 4 area of offering goods for sale or for hire in a shop, or providing library services, other than a business listed in paragraph 17 must—

(a)cease to carry on that business or provide that service except

(i)by making deliveries or otherwise providing services in response to orders received

(aa) through a website, or otherwise by on-line communication,
(bb) by telephone, including orders by text message, or
(cc) by post;

The Regulations make it clear that goods can only be made available to customers in response to an order received through a website etc. and it is correct that there is no requirement for full payment under the Regulations. However, while a deposit is a stage in the contractual process, when it comes to vehicle sales a deposit is rarely evidence of a binding legal contract for the supply of a vehicle. If the customer intends only to arrange for a test drive, then legally a binding order has expressly not been received and the business would be at risk of prosecution. Indeed, we currently have examples of dealers being threatened with prosecution.

If a business is making a vehicle available to a customer in a tier 4 area, we would strongly advise that all major aspects are agreed and that there is no need for any further negotiations or paperwork before arranging a test drive. While a deposit is an indication of intent, we would advise members to consider carefully instead whether they are ready to register the vehicle in the customer’s name, as until that stage you are unlikely to have a binding contract.

It may well be that customers are reluctant to arrange a binding contract until they have had sight of a vehicle. Importantly, it should be remembered that provided a business complies with its obligations in a distance contract, a customer can legally change their mind for any reason up to 14 days after delivery of a vehicle. This includes any period before delivery. Cancellation during this cooling off period is a legal right, and will not negate the original contract for the purposes of the Regulations. Indeed, where a contract is cancelled before delivery it may be that there is no detrimental effect on the vehicle’s value at all.

In conclusion

Where individual enforcement agencies interpret the legislation to allow a test drive upon receipt of a deposit, this will reduce the likelihood of prosecution. However, this will only affect the authorities concerned and they can change their minds. Other enforcement agencies have concluded that test drives are prohibited, not least because they are deemed to be inessential journeys.

There are also practical considerations, as any test drive would be unaccompanied and a business would need to ensure that vehicles were taxed and insured for use on the road.

Until the Government amends the Regulations, or areas are removed from tier 4, we therefore continue to advise that test drives breach the spirit of the Regulations and may well breach the letter, depending on how far down the order process a customer has progressed.

This advice is general in nature and will need to be tailored to particular situations.  Should you find yourself in difficulty, please contact us at any stage for advice and assistance.

Further Information

Details of the cardealermagazine.co.uk article discussed can be found at:

https://cardealermagazine.co.uk/publish/test-drives-are-allowed-during-lockdown-three-after-legal-experts-receive-confirmation-from-trading-standards/217740

A copy of the Regulations as discussed can be found at:

https://www.legislation.gov.uk/uksi/2020/1374/schedule/3A