30 November 2022
Franchise dealers to get fined if they fail to conduct checks on customers
Land Rover customers are apparently having to promise they won’t sell their cars for at least six months. Land Rover dealers have anonymously told Car Dealer magazine that they are being forced to conduct ‘due diligence’ on prospective buyers to ensure they’re not going to flip their cars for a profit. Jaguar Land Rover is also said to be handing out large fines to bosses of franchised dealers if they fail to conduct checks on customers.
The news comes as Auto Express was made aware of and reported on two cases where customers who ordered new Defenders were asked to sign a document before taking delivery. The document stipulated that the customer cannot sell their car to anyone other than an official Land Rover dealer within the first six months of ownership.
Seemingly contradicting the claims, Land Rover issued a statement, which read: ‘Our retail partners work hard to ensure all customers are treated fairly and with honesty. It is not on our instruction or guidance that any agreements are made with customers relating to the onward sale of their vehicle, nor do we endorse it.’
Car Dealer was told that some customers had bought cars and then sold them on for big money and the manufacturer had not been particularly happy about it. ‘‘Some customers have been going round lots of different dealers and placing multiple orders and I know the manufacturer has cancelled those,” claimed a Land Rover dealer.
It was also confirmed that some independent dealers were on a ‘black list’ – which meant official franchised sites were not allowed to sell them Range Rovers. As well as Defenders currently commanding premiums £10,000 over list price or 114 per cent of their cost new, data from CAP HPI also reveals Range Rover petrol models are going for a similar premium (108 per cent of their cost new). It’s no surprise this is going on with Land Rover waiting times for new cars as long as two years and buyers happy to jump the queue and pay a premium to get hold of a car right now.
Is it right for car manufacturers to make customers sign these sorts of agreements? It’s something that Porsche has done with certain models to stop true enthusiasts losing out to speculators, but in the case of limited production models it almost makes sense… A spokesperson for Land Rover UK has since said: ‘‘Together with our retailer partners we work to deliver a luxury experience for our clients.’’ The hypothesis is that by creating more of an ‘experience’ from the sales process it might prevent speculators. What are your thoughts on the matter? Write to us at [email protected].