Tough new UK consumer legislation has been successful on its first day.
The Consumer Rights Act 2015 became law on Thursday and on Wednesday night Volkswagen UK announced it had withdrawn from sale about 4,000 pre-registered diesels now subject to the refit over their deceit diesel engines.
About 11 million illegal VW Group cars are being re-examined, refitted or recalibrated around the world over coming months to meet the exhaust emissions legislation it tried to get around, including just under 1.2 million in the UK dating from 2009.
If the latest cars had been bought off forecourts by customers from Thursday their owners could have run them for a month before returning and getting their money back in full under the new act, and the dealers could not have refused to take them back and refund the money paid.
The cars in question were Euro5 compliant and separate EU legislation said they had to be registered by the beginning of September or they could not be sold.
To sell the stock, we understand Volkswagen Group or dealers had registered the VWs, Audis, Skodas and SEATs and put them on forecourts at prices below their normal as-new list price.
Volkswagen is facing claims from Spain and France for money their governments paid in scrappage or green allowances encouraging owners to trade in ten year old models for new models.
UK Government may do the same as it paid out about £330M five years ago under its scrappage scheme, and a percentage of that would be for newer VW Group models to replace scrapped cars.
There is also the possibility that the HMRC will reclaim lost BIK and duties associated with the disgraced cars which should have attracted higher payments than they did as a a result of falsifying emissions. The possibilities of getting the money back will depend on the minute detail of the deal struck to scrap the older models and buy new Volkswagen Group cars.
The change in law from 1 October means any models bought from that date and subsequently found to be illegal under the emissions legislation could result in owners returning them and being compensated without question under the Consumer Rights Act 2015.
If more than 30 days passed since the purchase, the garage has a single opportunity to repair the car before its rejected by the owner and money is returned. This is likely to become an issue if any refit or recalibration modifications are done and the vehicle does not then meet the originally claimed performance which led to it being purchased in the first place.
Volkswagen said on Thursday it would take longer than expected to investigate its rigging of vehicle emissions tests, raising the prospect of months of uncertainty for customers, shareholders and staff.
After a seven-hour meeting late on Wednesday, the German carmaker’s supervisory board said it would take “at least several months” to complete investigations, including an external inquiry by US law firm Jones Day.
As a result, it proposed cancelling a shareholder meeting it called less than a week ago to discuss the crisis on 9 November.