“I regularly provide loan vehicles for customer use during repairs. I have recently had a Land Rover Discovery for repairs and have provided a Ford Fiesta whilst the work was being undertaken. This was not a problem but now there has been a delay due to parts and the customer is becoming frustrated that they are driving an economy car while paying for a luxury vehicle.”
Offering loan vehicles to customers during repairs is a common practice to enhance convenience and maintain goodwill. Unfortunately with the continuing upheaval in parts availability, we’ve seen several incidents where delays outside of the members’ control have caused issues. This situation underscores a common dilemma. While there’s no general legal obligation to provide a like-for-like replacement unless specified in a contract, customers may have expectations that can lead to dissatisfaction and strained relationships. Managing customer expectations, then, is the key.
Be clear as to the terms of the courtesy/loan car from the beginning
In the rough and tumble crush of the real world, things are busy. It’s easy to just engage in practices that are routine. We’re sometimes surprised to see that some of our members do not put a loan car/courtesy car agreement in place. That’s a very bad idea. If you do not have a written courtesy car agreement, we would strongly advise that you put one in place. Not only would this assist in any disputes between you and the customer, but it would also deal with other common issues including speeding offences, penalty charge notices and parking fines.
Be proactive and transparent up front.
Clearly inform customers at the outset about the type of loan vehicles available. Explain that while you strive to minimize inconvenience, like-for-like replacements may not be possible due to availability or cost constraints. Also, be transparent that, depending on how long the repairs take, the customer might have to switch out their loan vehicle for another, and you cannot guarantee what the new vehicle will be.
Manage expectations.
In the current example, whilst the frustration is understandable, provided you have not given a guaranteed repair date to the customer and you have not caused or contributed to the delay, a delay due to parts availability is a risk the customer is taking when becoming the owner of the vehicle. There is no obligation on you to upgrade the vehicle, and where any delay is significant you could even request the return of your courtesy car. If you do decide to assist you need to be clear as to what you will do and ensure that this communicated in writing to the customer, along with any updated timeframes for the repair.
Don’t forget, as this advice is general in nature and will need to be tailored to any one situation. As an RMI member you have access to the RMI Legal advice line, as well as several industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.
Motor Industry Legal Services
Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.
