Web shoppers duped by misleading car prices

22 June 2001 #SMMT News

SMMT today added its support to a trading standards report

calling for better protection for Internet shoppers. Called Surfing the Big

Wave, the report highlights problems in policing the web and calls for a properly

trained body to ensure that consumer protection rules are enforced on the net

as well as in the high street.

The report comes following the collapse of several motor web

sites, leaving many who have paid deposits high and dry. Media reports have

also focussed on delays and episodes of poor customer service from car e-tailers.

The misuse of illegal price comparisons in particular concerns

the industry. Many web sites imply that the manufacturers’ list price is what

consumers must pay if they choose to buy from a UK dealer, breaking laws on

advertising. While the list price is used as a guide, many consumers negotiate

significant discounts through local franchised dealers.

SMMT chief executive Christopher Macgowan said, ‘We believe

that the law on advertising is clear but that many web sites choose to deliberately

flout the rules. Price comparisons must be based on like for like, so to suggest

that a list price is not open to negotiation and that savings can only be made

through a web site is wrong. It ignores the savings consumers can make through

UK franchised dealers and we welcome trading standards’ call to tighten the

net on all aspects of web retailing.’

Notes to editors

  1. On 23 April 2001 the Control of Misleading Advertisement

    Regulations came into force. These prohibit the use of comparative advertising

    that misleads consumers. The Regulations follow the DTI’s Code of Practice

    for Traders on Price Indications which states that price comparisons should

    only be made if they are ‘accurate and valid’.

  2. The list price for a vehicle is intended as a guide and

    is similar to recommended retail prices used for white goods. Franchised dealers

    are free to offer discounts. The price the consumer pays at the showroom is

    the retail price which reflects a true comparison with web retailers prices.

  3. The Alliance and Leicester New Car Price Index first started

    reporting pricing trends on a monthly basis in July 1999. Since then the average

    retail price of a new car has fallen every month. The largest month on month

    drop was reported in December 2000 when the average price of a new car fell

    by 10.4 per cent.

  4. In the first five months of this year new car sales to private

    buyers have risen by more than 18 per cent, the result of competitive pricing,

    better specifications and longer warranties.

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