SMMT calls for motor traders to be licensed

17 September 2001 #SMMT News

SMMT today urges the government to set up a compulsory licensing

system for motor traders. Under the proposal, any company selling, repairing

or servicing cars would have to show it works to a set of minimum standards

before being granted a licence to trade. Regular inspections, by properly funded

trading standards officers, would ensure standards are maintained and consumers

receive high quality service.

The call for compulsory licensing comes a year after a DTI

task force was set up to look at measures to improve the service consumers receive

from those servicing and repairing cars. In publishing an initial consultation,

the task force has put forward a proposal for a ‘good garage scheme’, where

garages volunteer to sign up to a set of standards.

But while SMMT agrees that minimum standards are needed, a

voluntary scheme will not go far enough to police those who consistently fail

the consumer. Only a compulsory licensing scheme will force those who provide

poor service to improve or to stop trading altogether.

‘On paper a voluntary scheme might seem like a good idea, and

the quality end of the market will readily sign up to a set of standards. Others

will simply ignore it and carry on regardless,’ said SMMT chief executive Christopher

Macgowan. ‘As things stand, anyone can set themselves up in used car sales,

repair and servicing without proper training, equipment or on-site facilities.

A well-enforced and compulsory licensing system is the only way we can ensure

that those who provide shoddy service are weeded out and removed from the market.’

SMMT recommends that the Code of Practice for the Motor Industry

is used by the government as a starting point for new motor trader standards.

The Code, which has Office of Fair Trading (OFT) approval and which all members

of SMMT follow, has comprehensive provisions for new and used car sales, and

sets minimum standards for aftersales servicing and repairs.

Today’s task force findings come a year after the OFT published

its Car Servicing and Repairs report. The report, which included a survey of

2,726 consumers, found that the vast majority of customers were satisfied with

the service they had received in the last six months. Overall satisfaction with

both servicing and repair was reported as ‘very high’; 92 per cent of services

and 86 per cent of repairs resulted in a satisfied customer.

However, the experiences of those surveyed were not mirrored

in a general perception of the industry, according to the OFT findings. Qualitative

research showed that the industry does not enjoy a good reputation, with past

experiences and other people’s problems helping to shape negative views.


Notes to editors:

  1. The Office of Fair Trading already administers a licensing

    system for credit companies. Under the Consumer Credit Act, all credit providers

    and their agents must apply for and be granted a licence before trading. Licences

    may be revoked by the OFT if complaints are upheld.

  2. The Society of Motor Manufacturers and Traders (SMMT), Retail

    Motor Industry Federation (RMIF) and Scottish Motor Trade Association (SMTA)

    are all signatories to the OFT approved Code of Practice for the Motor Industry.

    All member companies are bound by its provisions. Under the Code, a dispute

    may be referred to the relevant trade association for conciliation and, where

    necessary, to independent, low-cost arbitration.

  3. Last year’s OFT report into car repairs and servicing concluded:

    The research has shown that levels of satisfaction with recent experiences

    of both service and repair are high, with few problems of bills being higher

    than quoted or poor communication. However, from the qualitative research

    it is apparent that the motor industry does not enjoy a good reputation, and

    that customers either had bad experiences in the past, or knew people who

    had. (p31)

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