Buying a car in the UK
Can I pay for a car in cash?
There are no restrictions on this. Traders, however, must register with the tax authorities as ‘High Value Dealers' if they accept cash payments in excess of EUR 15 000. Exclusions apply. When entering or leaving the EU, you must declare any sum of money of or equivalent to EUR 10 000 and above to customs using a specific form.
What about payment of VAT?
Within an intra-EU transaction new cars should be sold without VAT. A car is considered new if no more than 6 months have passed since the date on which it was first registered or if its mileage does not exceed 6 000 km. In practice, some sellers may require payment of VAT as a deposit, to be refunded once the car is registered in the buyer's country. Check in advance with the seller how to claim the VAT refund, i.e. what documentation the seller needs from you. In practice, the seller will require proof that the car has been registered in another EU Member State and sometimes, proof of payment of VAT.
All other cars are considered second hand (more than 6 months since the date of first registration and mileage of more than 6 000 km). They are generally sold inclusive of VAT (20 %) if the supplier is a commercial seller (the supply is not liable to VAT if the supplier is a private person). You don't have to pay VAT in your country of residence.
Is the seller obliged to provide a vehicle inspection?
The seller is not obliged to provide technical reports but selling unroadworthy cars may be seen as a criminal offence. This applies to both trade and private sales and is punishable with fines of up to GBP 5 000 (+/- EUR 6 800). A vehicle inspection (MOT) certificate proves that a car is roadworthy but does not necessarily mean that it is in good condition.
UK cars need to pass an MOT for the first time 3 years after they are first registered and then every year (3-1 rule). MOT certificates cost GBP 54.85 (+/- EUR 75) for cars and GBP 29.65 (+/- EUR 40) for motorbikes.
Is the UK vehicle inspection recognised in my home country?
Some countries recognise it. Check in advance with your national authority to avoid unnecessary costs.
Can I have an expert carry out a check on the car at the seller's premises?
Yes. You can also check the mileage using the MOT scheme records . Various commercial services allow you to check the number of previous owners, insurance status (write offs for example), whether the car was stolen, if it has outstanding finance on it, etc..
What should I look out for in the contract of sale?
Read the contract carefully and only sign contracts you understand. Some traders try to exclude legal guarantee rights by claiming that the contract is a business-to-business contract or that the car is sold "without warranties" (only in business-to-consumer contracts would such a clause be considered null and void). Make sure that the name of the seller is the same as the name given in the registration document, or that the seller has power of attorney to sell the car in the registered owner's name. If you buy from a trader, make sure that the name of the company is mentioned in the contract and that there is an indication regarding VAT.
Can I cancel a signed contract?
- If the contract is signed on the seller's premises, you have no legal right to withdraw (unless the car is financed by a loan and the contract includes a clause allowing you to cancel if credit is declined or if you use your legal right of withdrawal from the credit contract). In some cases, you may have to pay administrative charges and/or any interest incurred up to the point of cancellation (subject to the contract's terms and conditions).
- If the contract is a distance sale contract and you have not yet collected the car from the seller's premises, you can withdraw from the contract before delivery. You can also withdraw up to 14 days from delivery of the car to your address. If you collect the car at the seller's premises, the contract is usually signed there and either will not foresee or will exclude the right to a cooling off period.
What documents should the seller provide?
- The contract of sale or an invoice
- The registration certificate (V5 Registration Document, commonly referred to as the 'logbook')
- The seller is not legally obliged to provide the European Certificate of Conformity (COC). If no COC is available from the seller, you can contact the manufacturer in UK or in your home country. If the manufacturer cannot provide a COC, ask a technical service organisation in the UK or in your country of residence.
Check if other documents are needed in the country where you intend to register the car.
Should I apply for temporary plates to drive the car home?
If you take a UK-registered vehicle out of the country for 12 months or more (also known as permanent export) you must follow this procedure.
No temporary plates are available in the UK. You can use a transport company to arrange for delivery and then apply for permanent registration in your home country or use the UK number plates if the car has been deregistered and you have all of the documentation allowing you to drive legally on public roads (registration certificate, contract of sale/invoice, insurance).
You may be able to apply for transit plates from your home country. Check with your relevant national authority.
Do I need temporary insurance?
When driving the car home, you must be covered by insurance allowing you to drive on public roads. Ask your insurer or their representative in the UK if they can provide you with short-term insurance. Various companies/brokers sell short-term policies. They usually start at around GBP 10 a day but, like annual policies, the quote you get will depend on a whole host of factors including your age, the vehicle you want to insure, and the area in which you live. You need to specifically request European cover as not all such policies offer it.
If I have a complaint about a cross-border purchase, whom do I contact?
Contact your local ECC: www.ukecc.net
What out of court dispute resolution body is available in UK?
Motor Codes Ltd, 71 Great Peter Street, London, SW1P 2BN. Scope of competence: new cars under manufacturer warranty, terms of manufacturer warranties and spare parts availability.
To whom do I report cases of fraud?
To the local Police or the Action Fraud centre. You can also report the matter to local Trading Standards through the Citizens' Advice Consumer Helpline: 03454 04 05 06 (especially if the details given by the perpetrator are those of a legitimate trader who is unaware of the fraud).