Increasingly more South Africans are opting to purchase secondhand cars. Not only does this growing market allow more people access to their own transport, but it has also resulted in more job opportunities as pre-owned vehicle dealerships establish themselves in the hopes of turning a profit. Make no mistake, selling pre-owned vehicles can be a lucrative business.
That said, running your own dealership also comes with significant legal risks – especially when selling non-certified vehicles. Dealerships that fail to ensure transparency and accountability in their sales process may face legal disputes, financial losses, and reputational damage.
Here is a closer look at why offering certified vehicles is essential for dealerships looking to protect themselves from costly legal complications.
Consumer Protection Laws And Legal Liability
South Africa’s Consumer Protection Act (CPA) provides strong legal safeguards for buyers, meaning that dealerships can be held accountable for selling defective or misrepresented vehicles. If a dealership sells a vehicle that later exhibits mechanical failures, the buyer may have legal grounds to demand:
- A full refund if the vehicle is deemed unfit for sale.
- Repairs at the dealer’s expense if faults emerge within the first six months of ownership.
- Replacement of the vehicle in severe cases of misrepresentation.
Non-certified vehicles pose a heightened risk because dealerships may unknowingly sell cars with hidden defects. Without proper certification which prove the vehicle’s condition at the time of sale, it can lead to prolonged legal disputes.
Reputational And Financial Consequences
Selling non-certified vehicles may seem like a cost-cutting measure, and a means to sell more vehicles at lower prices, but the reality is that there are long-term consequences that can far outweigh the short-term benefits.
Dealerships that sell unreliable vehicles risk legal action from dissatisfied buyers, leading to costly settlements and legal fees. Additionally, there’s the reputational damage that needs to be considered, because once it’s out there that your dealership has sold a ‘lemon’ there’s almost an immediate decrease in customer trust which would undoubtedly have a negative impact on sales.
We should also point out that dealerships who prioritise non-certified vehicles could risk losing business partnerships. This makes sense, because financial institutions and insurance providers may hesitate to work with dealers known for selling questionable vehicles.
The Right Certification Protects Dealerships
Certifications, such as the AA Certification Programme, provides a clear, independent assessment of a vehicle’s condition and history which can help dealerships mitigate legal risks.
The AA Certification ensures that vehicles undergo a rigorous 125-point inspection by qualified technicians, providing buyers with a comprehensive report detailing the vehicle’s mechanical condition, as well as technical support. This way, if a claim arises, dealerships can refer to the AA inspection report and technicians as evidence that the vehicle met industry standards at the time of sale.
All in all, dealerships offering vehicles with the AA stamp of approval are more likely to enjoy increased buyer confidence, higher sales, fewer post-sale conflicts, and legal protection.
Avoiding Legal Risks: The Smart Approach for Dealerships
For dealerships, the best way to avoid costly legal battles is to ensure that every vehicle sold has undergone comprehensive certification. By investing in AA Certification, dealerships can reduce their legal liability, enhance their reputation in the used car market, and provide buyers with the assurance that they are getting a fair deal.
Set Your Dealership Apart with AA Certification
As the pre-owned vehicle market continues to evolve, transparency and trust will remain key factors in securing customer loyalty. Dealerships that invest in AA Certification are not only protecting themselves from legal risks but also setting a higher industry standard for vehicle safety and reliability.
If your dealership is ready to enhance its credibility and avoid legal pitfalls, learn more about the AA Certification Programme and how it can benefit your business. s likely that certification may play a greater role across a variety of aspects involved in the purchasing of a preowned vehicle. For instance, we may see this crop up in financing and insurance approvals with financial institutions and insurers prioritising vehicles with independent certification.
Additionally, with more buyers prioritising vehicle certification, dealerships must adapt to stay relevant. The future of the used car market will likely see certification becoming a standard expectation rather than a value-added benefit. Thankfully, the number of independent vehicle dealerships partnering with the AA across the country is growing.