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MILS Case StudyBack

MILSLogo2“At the time of selling a vehicle we were running a promotion for free insurance. We provided all the details and advised them to contact the insurer but they didn’t. They have now had an accident and are saying we are liable for the repairs”


This will depend on the nature of the offer and the advertising surrounding it. Most will require the customer to ‘activate’ a policy. Provided you can establish that you correctly advised the customer of the conditions of the free insurance and how to arrange it you will not be liable. This will therefore depend on the accuracy of your records.

Care should be taken that your records are accurate and maintained. What we tend to see on these are that pre delivery include a check to see whether the customer has insurance. If you have ticked this without checking the insurance status then even if you have accurately advised them during the sale you may still be liable under negligence as you have stated that you have checked the policy and you have not.

What are you liable for?

Even if you are liable the customer still has a duty to mitigate his losses. In most accident the person liable will be the at fault driver. Therefore the customer should first claim against them. If the customer was at fault then you may be able to claim that they have contributed to their own losses. This can reduce your liability by up to 100%. It is therefore important as part of the complaints process to get details of any incident as well as the losses being claimed.

Moral of the story, records are important on these claims. Keep a record on the sales process and any information provided. Also care should be taken during PDI checks. Checklists are important and there for a reason. However, as they are used daily care should be taken that staff only check those tests that have been done. We have a seen a number of such checklists where staff has confirmed that tax discs are affixed to the vehicle!

This advice is general in nature and it will need to be tailored to any one particular situation. As an RMI member you have access to the RMI legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

Paul Carroll, Solicitor, Motor Industry Legal Services

Posted by Sue Robinson on 17/06/2016