Customer rights could promp car dealers to move away from affordable older vehicles, potentially leaving budget conscious buyers sourcing the same cars through private cash sales with fewer legal protections.
Warranty Solutions Group (WSG) issued the warning after research among more than 100 dealerships found 85% had changed their stock buying or retail practices because of Consumer Rights Act disputes and rejected vehicles.
Those changes included buying newer, lower mileage stock and avoiding particular models or vehicles with known reliability problems.
The findings coincide with growing demand for older cars. Autotrader data showed prices for vehicles aged between 10 and 15 years increased by 7% year on year in July as affordability.
Dealers cut exposure to older cars
Three quarters of the dealers surveyed said the Consumer Rights Act had created at least a moderate financial impact on their business during the previous three years.
Around 70% estimated that dealing with a dispute or rejected vehicle cost more than £1,000 on average. For lower value cars with limited margins, that potential expense can make retailing the vehicle commercially unattractive.
John Colinswood, chief executive of Warranty Solutions Group, said: “Last month, we highlighted that some dealers are choosing to trade on perfectly good older cars rather than retail them themselves. The question we are now asking is: where do those cars ultimately end up?
“They don’t disappear. They can move further down the trade and, in some cases, ultimately enter the cash market, where they may be sold privately or by an unregulated seller.
“The consumer may still end up buying exactly the same car, but instead of purchasing it from a reputable dealer that has prepared and warranted it and has legal responsibilities to the customer, they could be handing over cash to a private seller with far fewer legal protections and much less recourse if something subsequently goes wrong.
“That is the paradox we need to examine. Could pressures created by legislation designed to protect consumers inadvertently contribute to some buyers purchasing cars through parts of the market where they have less protection?”
Under the Consumer Rights Act 2015, a vehicle sold by a dealer must be of satisfactory quality, fit for any stated purpose and match its description.
Depending on when a fault appears and the circumstances of the case, customers may be entitled to a repair, replacement, price reduction or refund. Buyers purchasing privately generally have fewer statutory remedies.
Colinswood said: “The economics become particularly difficult when the vehicle itself is only worth a few thousand pounds.
“A dealer may have a perfectly good older car that they would previously have been happy to prepare, warrant and retail. But if the potential liability is disproportionate to the value and margin in that vehicle, trading it on can become the commercially safer decision.
“This isn’t about arguing for fewer consumer rights. It’s about asking whether the way those rights operate in practice could be having consequences nobody intended.”
Cash market outcome remains unproven
More than two million used cars changed hands during the second quarter of 2026, with older vehicles continuing to provide an essential source of mobility for customers unable to afford newer stock.
The central issue is whether consumer expectations and the handling of rejected vehicles adequately reflect the age, mileage, price and normal wear of an older car.
Professor Jim Saker, president of the Institute of the Motor Industry, said: “Consumers quite rightly expect high standards when purchasing a used vehicle. The challenge for the industry is ensuring those expectations are aligned with the realities of buying increasingly sophisticated vehicles that also have age, mileage and normal wear characteristics.”
Symon Cook, head of operations and member services at the National Franchised Dealers Association, said: “One of the industry’s biggest challenges is helping customers understand that while they’ve invested a significant amount of money in their vehicle, it remains a used product rather than a brand new one. That doesn’t mean lower standards. It simply reflects the realities of vehicle age, mileage and normal use.”
WSG said the combination of stronger demand for affordable cars and greater caution among established dealers warranted further examination.
Colinswood said: “For many motorists, an older used car isn’t a lifestyle choice; it’s what they can afford. If good, affordable cars are increasingly moving away from established retail channels, we need to understand where they are going and whether consumers are ultimately better or less protected as a result.
“We need a Consumer Rights framework that gives motorists confidence and protects them when things go wrong, while allowing reputable dealers to continue supplying the affordable vehicles millions of people rely on.
“If the unintended consequence is that some of those cars are instead moving into the cash market, where buyers may have significantly less protection, that is something the industry needs to understand.”
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