“I asked the salesman if the car had been in an accident, and they said it hadn’t.”
That’s a line so many buyers of what turned out to be dud used cars have included in their “please help” e-mails to me over the years. And when later presented with a third party's report listing previous major accident repairs, the dealership’s response is invariably: “We didn’t know.”
The thing is, a car’s accident history information is available to them, and the Consumer Protection Act — which is big on full disclosure — compels them to share what they know with prospective buyers.
You can be sure they source that information when they are the ones buying the cars. But there is no law compelling them to run those checks, allowing them to play that “we didn’t know” card when their customer later discovers the car’s dodgy history.
Last August, Lungile Mokoteli bought a 2017 Mercedes-Benz GLC Coupé from a Gauteng-based Mercedes-Benz dealership, the fourth vehicle she’d bought from that dealership. It was financed by Absa.
Four months later, after heavy festive-season rain, the windscreen began to leak on the left side. “It was so severe that no-one could sit in that passenger seat when it rained,” she told me. And, of course, the moisture created an unpleasant smell in the car.
When she reported this to the dealership, she was told they had replaced the windscreen shortly before the car's delivery, but it was installed incorrectly, hence the leak, and she was invited to return the car to have the problem sorted out.
The following month, Mokoteli, having decided to sell the car, took it to another dealership, seeking a trade-in offer. That dealership sourced a background check on the car, based on its VIN (vehicle identification number, a unique identifying code given to a vehicle when it's manufactured), which revealed that a previous owner had lodged an accident repair claim in 2018.
“That was a shock as it was never disclosed to me during the purchase process,” she said.
Further investigation revealed that a major section of the car had been resprayed, and the bonnet, fender, bumper and a headlight had been replaced.
When Mokoteli went back to the Mercedes dealership, armed with that VIN-based report, she was told they couldn’t help her because they hadn’t been aware of any such damage when they sold her the car.
The dealership subsequently confirmed with the previous owner, from whom they bought the car, that it had indeed been in an accident, Mokoteli said.
“But they said that at the time of the sale the seller had declared in writing that it was accident-free.
The thing is, a car’s accident history information is available to them, and the Consumer Protection Act — which is big on full disclosure — compels them to share what they know with prospective buyers
“I said I no longer felt safe in the car and wanted to return it for a refund.”
The dealership did propose a couple of settlement options, but she rejected them as they would have left her in a severely compromised financial position.
She notified Absa, which liaised with the dealership and got back to her in mid-February to say that the dealership was not willing to cancel the transaction.
Mokoteli’s next move was to lodge a complaint with the Motor Industry Ombudsman of South Africa, which got back to her in June to say that the office was forced to terminate the case as the dealership had failed to respond to its e-mails about the matter. She was advised to approach the National Consumer Commission.
“This saga has been dragging on since January; I’m driving and paying for a car I am not at all comfortable with,” Mokoteli said. “I wouldn't have bought it had I known it was once involved in a serious accident, and now I am going to lose out when I sell it.”
When she took her complaint to Mercedes-Benz South Africa, the manufacturer’s customer contact centre told her the dealership had the right to repair the car and it (MBSA) did not support a take-back “at this time”.
It’s clear that motor dealerships are able to source a vehicle’s history online, but is that information available to consumers as well?
Armed with the VIN for Mokoteli’s Merc, a quick Google led me to the Vindocs site, where, for R316, I got a full report on the car, which revealed that in September 2018 it was damaged in the front, back and down the left side, including “front glass”.
The repair cost was estimated to be R316,000, so it can be safely assumed the accident in question was not a minor one.
I opted to tackle Absa about the case, asking a key question: Does Absa’s vehicle asset finance division (VAF) insist that dealerships with which it partners as a finance house source such VIN-based reports to check if cars are stolen, or have a bad accident history, or have had a “haircut” — odometer tampered with to falsify mileage, and the like? And submit that report with the finance application?
If not, why not, as a consumer protection?
If all banks insisted on this, many a car buyer would be spared a lot of financial and emotional pain. And clearly the trade is able to access such reports far more cheaply than a private individual wanting to do a single background check.
Responding, Absa said while it did not finance “stolen recoveries” or built-up vehicles with Code 3 classifications, it was “challenging” for the bank to identify vehicles with tampered mileage and various other defects.
“We rely on our dealer base to introduce vehicles to us and our clients that are in good working order, without any misrepresentations made concerning the vehicle’s condition.
“We encourage our dealers to run HPI checks (a VIN-based check offered by TransUnion) on all vehicles financed with Absa to identify any adverse history.”
Asked why the bank “encouraged” rather than instructed the dealers to run those checks, in the interests of protecting its customers, Absa said: “While the various services available to assess the condition of vehicles continue to improve, they are not consistent.
“It is also important to note that indemnity clauses may be found in HPI reports, and similar services, stating that the service provider does not guarantee the accuracy of the enclosed information.”
Asked whether the bank was willing to engage with the dealership about a reasonable take-back deal on behalf of Mokoteli, Absa offered to reopen its mediation in Mokoteli’s dispute with the dealership, and then “make a recommendation based on the latest status of the matter”.
That process is under way, which is why I’ve not yet disclosed the name of the dealership.
I asked several other vehicle financing banks whether they required dealers to submit VIN check reports. Their responses:
• WesBank: "We acknowledge the importance and value of VIN checks. But as it is not a legal requirement, WesBank does not insist that dealers source VIN checks.
“The master sale and representation agreements with our dealer partners require them to inform potential customers of any known defects or damage to vehicles and ensure that they are fit for purpose. The Customer Protection Act also requires that dealers must advise customers of any known defects found in the vehicle being purchased.”
• Standard Bank: “We do not insist on a VIN check report on every vehicle submitted for finance.
“The onus remains with the approved supplier to ensure that vehicles sold to the public meet the legal and regulatory requirements as specified by law — including the CPA.
“Where noncompliance is noted, the bank reserves the right to cancel such sale agreement supported by bank finance.”
• Nedbank’s Motor Finance Corporation: “MFC does not specify which checks the dealership should perform and does not insist on a dealership submitting same as part of the pre-sale process.
“MFC is not the supplier as defined in the Consumer Protection Act, so the rights, obligations and warranties set out in the CPA apply to the dealerships.”
But MFC does mediate between the dealership and the consumer in the event of a defective motor vehicle “and does not ignore the consumer’s concerns”, the bank said.
Bottom line: when buying a used car, ask the dealership whether it has sourced a VIN-based check on the car’s history, and ask to see it. If not, why not?
And if you’re really keen on the car, you can do it yourself for a relatively small fee. There’s no excuse for not knowing.
• Contact Knowler for advice with your consumer issues via email: consumer@knowler.co.za or on Twitter: @wendyknowler
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