Need help with a motoring dispute? - Used car fear was warranted

NAME: Gary Green
LIVES Highworth, Swindon
OCCUPATION: Team leader, energy company
CAR: Daewoo Matiz SE+
PROBLEM Invalid warranty

When Gary Green bought his three-year-old Daewoo Matiz from a dealer in Middlesex, the salesman offered a year’s warranty for £299. At first Gary said no, he didn’t want it. However, the salesman persisted and Gary agreed to take it, paying by credit card.

Simon Elder, a director of Cheap as Chips, a used car dealer in Hayes, filled in the documents. He and Gary then signed them.

Five months later, Gary’s Matiz started running badly. He took it to his local main dealer, who said it probably needed a new engine control unit (ECU), which would cost several hundred pounds. Gary contacted Auto Protect Administration, the company behind the Customer Protect warranty he’d bought. They told him that they had no record of it.

Gary tried phoning Cheap as Chips but there was no answer. So he tried the Cheap as Chips website. This redirected him to a park-and-fly company that served Heathrow Airport.

Gary contacted Helpdesk and we tracked down Simon Elder. He said Cheap as Chips had closed and that an application to dissolve the company behind it, Trade 350 Plus Ltd, was with Companies House. Simon claimed he had paid for Gary’s warranty and sent the paperwork. He couldn’t explain why Gary should have had problems with it but, when we pressed him, he said he would ‘try’ to assist by finding proof of payment.

We then spoke to Auto Protect, which confirmed what it had told Gary. However, the company’s Matt Tyler said the agreement over the warranty lay between the dealer and the customer. ‘We’re only the administration for it,’ he told Helpdesk. True.

A week later, we contacted Simon Elder again. He told us that he, too, had checked and discovered that the warranty company hadn’t received payment. So to put things right, he’d sent a cheque to Auto Protect that morning.

We rang Gary with the news. He was pleased. Even better, the garage had just said that his car didn’t need the expensive repair feared. There was just a blown fuse to replace.

What surprised Helpdesk and Gary was the apparent lack of checks built into this warranty. Gary had Auto Protect’s booklet, setting out the terms of cover, which he and Simon Elder signed. It all looked fine. He had no way of knowing that the warranty wasn’t ‘live’.

Auto Protect’s Matt Tyler told us its local representatives visited dealers regularly and, he said, should quickly spot if paperwork was not correctly processed. However, he said the company didn’t issue receipts to policyholders as proof that the warranty had been paid for.

Since January, car warranties have come under the control of the Financial Services Authority (FSA), a Government-backed watchdog. It is now illegal for any company to sell warranties unless it is authorised by the FSA or, at least, an ‘appointed representative’ of a directly authorised company.

If this happens to you
• Compare warranties. Some pay only up to £500 per claim – not nearly enough if something major breaks.
• Check the warranty provider is registered with the Financial Services Authority (www.fsa.gov.uk). If it is, there’s compensation if it all goes wrong.
• If you’re buying a car at three years old, its cover from new will soon expire, if it hasn’t already. Think about buying manufacturer’s ‘top-up’ warranty from a main dealer – they’re often excellent value.