Opening a used car dealership can be an excellent way to make money, whether from home or from business premises. You’ll need to know cars well, including routine maintenance and how to spot any issues that a car has before you buy or sell it. There are also a lot of legal requirements and obligations you’ll need to understand and comply with to run your business safely and fairly.
The legal side of things can feel complicated, but it is a vital part of business for you to understand. It may help to get in touch with a lawyer to ensure that you fully comply and don’t find yourself on the wrong side of the law at any point.
Trade Licence Plates
Trade licence plates allow you and others to drive cars you’re buying, selling or trading. They are one of the most crucial legal requirements for your business as you will need them to offer test drives to potential customers. Trade licence plates are valid for either six or 12 months and should be displayed prominently when anyone is driving the vehicle. You should keep on top of your trade licence plates and ensure they are renewed in good time.
FCA Approval
If you plan to offer finance to customers utilising your used car dealership, you’ll need FCA (Financial Conduct Authority) approval. Financing can open up your business to a broader range of customers, making your services more affordable. It is vital to understand the legal requirements of offering finance and how to get and keep FCA approval.
The FCA is in charge of ensuring that consumers get a good deal and are treated fairly by people offering finance, whether it be a multinational bank or a local car dealership. You’ll need to comply with many obligations, so it may help to talk to a lawyer or compliance practitioner who can help you stay on the right side of the law.
Motor Trade Insurance
Motor trade insurance includes a range of policies and provisions that allow you and your staff to drive cars owned by your business and customers’ cars. It will cover the event of various risk factors such as third-party injuries and public and employers’ liability, to name just a few.
It is a legal requirement for any business that deals with many cars, including those that don’t belong to them. It’s best to shop around for your motor trade insurance, and you can get the best motor trade insurance from Quotezone.co.uk.
Consumer Rights Obligations
Used car dealerships must comply with the Customer Rights Act (CRA) when selling cars to customers. This includes a range of obligations that you behave in a fair and ethical manner when selling a vehicle. One of the key requirements is that the vehicle is of ‘satisfactory quality’ based on a reasonable person’s understanding of the term.
This can include many factors, such as the value, age, history and safety of the vehicle. It should also be fit for purpose, meaning the vehicle should run and have no major defects. You must also provide an accurate and fair description of the vehicle, and any features mentioned in any advertising materials should be accurate and working correctly.
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