Motoring: Case of lemon aid

YOU'RE NOT happy because you've just bought a "lemon". The new car you were so proud of has let you down. So what do you do? The Government recently announced measures to even out the playing field. The White Paper, Modern Markets; Confident Consumers, as well as promising fairer prices also outlined plans to stamp out "clocking" (altering a car's mileage).

Meanwhile the UK consumer can only look in envy at America, where "lemon laws" carry a lot of clout. A European directive (The Consumer's Guarantees) offers some hope that things will change - but not until 2002. This aims to force retailers to fix defects that occur within two years (and, remarkably, up to one year for used cars) and make manufacturer's guarantees binding; currently they are not.

In essence, getting your money back or a replacement model is going to be a lot easier. But that could all change as the consultation process begins and car manufacturers start lobbying. So what exactly are a car buyer's rights now in the UK?

Buying privately: The riskiest way to buy a car. The used car only needs to be as described by the seller. If a private seller lies, you can sue for your losses. The best you can do is write everything down (including whether it has crashed) and get all parties to sign the document before a witness. The hassle of pursuing a seller in the courts puts most people off. Sellers of unroadworthy cars can be reported to the police.

Buying from a dealer: The car only needs to be of satisfactory quality or of a standard that a reasonable person would regard as acceptable, bearing in mind the way it was described, how much it cost and any other relevant details. This covers, for example, the appearance and finish of the car, its safety and its durability. If you purchase a stolen car in good faith, the contract of sale is not legal. Someone else, usually the insurance company, will be entitled to it. It is not an offence to sell a repaired car provided it is roadworthy. If it is unroadworthy there may be a possible action against the seller under the Road Traffic Act. If the seller was a trader, the police and trading standards authorities may also get involved. If a dealer knows the mileage of a vehicle is incorrect or alters it, that is an offence under the Trades Description Act. Disclaimers stuck on the mileometer are ineffective if the dealer knows the true mileage.

New cars: These are governed by the Sale of Goods Act and some case law, which so far has been inconclusive. The buyer of a new car of which the engine expired after three weeks and 140 miles was judged to have accepted that car. Although the buyer appealed, there was an out-of-court settlement. So until we get American-style "lemon laws", the moment the car is collected constitutes acceptance, although faults in a new car may not be immediately apparent. However, manufacturers and dealers are sensitive to criticism and likely to rectify a fault.

There are two options when faced with a troublesome new car: either sue for damages or reject the car. If you decide to reject, then act quickly. Keep a diary and note what went wrong and when. Also log responses, phone calls and letters. State the faults in writing to the dealership and the manufacturer. Do not use the car, note the mileage and give a set of keys to the dealer. Keep up finance payments, otherwise the car could be repossessed. If you are lucky you could get your money back or a replacement.

This is what the Retail Motor Industry Federation is for. Most dealers are members, and it has a conciliation scheme to sort out problems. Beyond that, it recommends binding independent arbitration for a small fee. Member of motoring organisations will get free legal advice. Going to court, where you can sue for return of your money or compensation, is a hassle. For sums up to pounds 5,000, there is the simpler small claims procedure.

Retail Motor Industry Federation: 0345 585350; Scottish Motor Trade Association: 0131-225 3643; Office of Fair Trading Consumer Information: 0345 22 44 99