A website for car retailer New Car Discount, www.new-car-discount.com, seen on 2 December 2019, stated on its home page “new-car-discount.com is a new car and van online retailer, we offer exclusive discounts and finance deals on a large range of UK makes and models”. Below that was a cartoon image of a car wrapped in a bow with text that read “JOIN THE NEW CAR INTERNET BUYING REVOLUTION”. The home page featured tabs labelled “New Vans”, “New Cars” and “Pre Reg”, under which a number of vehicles were offered.
The complainant, who believed a number of pre-registered vehicles were listed under the “New Vans” and “New Cars” pages, challenged whether the claims that the vehicles were ‘new’ were misleading.
Auto Union Finance Ltd t/a New Car Discount said the “New Cars” and “New Vans” section of their website offered vehicles which they factory-ordered to a customer’s exact specification, whereas the “Pre-Reg” section contained vehicles already registered by the manufacturer historically, but were still effectively new, unused, had never been driven and had zero mileage.
They said that four of the vehicles they offered at the time the ad was seen were pre-registered, and believed that consumers would understand that the vehicles listed under the “New Cars” and “New Vans” tabs were brand new, unregistered vehicles, but did not believe that they would necessarily expect to be the first named on the registration documents in every case. They said that after a consumer clicked on the offer, it was explained that a vehicle was pre-registered in bold, red text.
New Car Discount said that registering a customer’s factory ordered vehicle on arrival at the relevant dealership to one of their finance and leasing or associate companies (as opposed to the customer) meant that they were able to offer the vehicle at a greater discount. They said that factory ordering a vehicle that was “yet to be registered” did not affect a vehicle’s warranty, insurance or breakdown cover as those vehicles were supplied with a full manufacturer’s warranty and breakdown cover and a full 12 months’ Road Fund Licence. New Car Discount referred to an HMRC definition which stated that “New cars are ‘unused and not second hand’. You should accept a car is unused and not second hand even if it has been driven a limited number of miles for the purposes of testing, delivery, test driven by a potential purchaser, or used as a demonstration car”, and therefore stated that the pre-registered vehicles they offered fell under that definition. They said that the various companies with whom they would arrange finance agreements for all of their vehicles also accepted that the new cars they sold were indeed treated as new up to three months old or up to three months after being first registered.
The ASA noted the text “new-car-discount.com is a new car and online retailer” and “JOIN THE NEW CAR INTERNET BUYING REVOLUTION” and a cartoon image of a car wrapped in a bow. That text appeared alongside the tabs “New Cars”, “New Vans” and “Pre Reg” at the top of the page. We considered that consumers would understand from those three tabs that the vehicles offered by New Car Discount had been separated into three distinct categories. The latter of the three would contain pre-registered vehicles (i.e. those registered in the dealer’s name prior to sale). In light of that, we considered that consumers would understand that the vehicles listed under the “New Cars” and “New Vans” tabs were brand new, unregistered vehicles and that therefore, if they decided to purchase one, they would be the first name on the registration documents. While “New Cars” and “New Vans” did list brand new, unregistered vehicles, they also contained pre-registered vehicles which had also been listed separately under the “Pre Reg” page. However, there was no information under the “New Cars” or “New Vans” pages which notified a consumer whether a listed vehicle was pre-registered.
Pre-registering a vehicle meant that the dealership was able to offer it at a discounted price. However, a consumer’s name would be the second on the registration document, and we understood that there were circumstances where warranty, insurance and breakdown cover might also be affected as a result of a vehicle having been pre-registered. Consequently, we considered that the fact that a vehicle had been pre-registered by the dealership was material information which was required by a consumer in order to make an informed decision to enquire further. However, because that information was not provided on the “New Cars” and “New Vans” sections of the website, consumers were able to navigate to the specific vehicle page without having been informed that a vehicle was pre-registered. Because the “New Cars” and “New Vans” sections of the website contained a number of pre-registered vehicles and because no information was given informing consumers that was the case, we considered that the claims that the vehicles listed under those pages were “new” were likely to mislead.
The ad breached CAP Code (Edition 12) rules
Marketing communications must not materially mislead or be likely to do so.
Marketing communications must not mislead the consumer by omitting material information. They must not mislead by hiding material information or presenting it in an unclear, unintelligible, ambiguous or untimely manner.
Material information is information that the consumer needs to make informed decisions in relation to a product. Whether the omission or presentation of material information is likely to mislead the consumer depends on the context, the medium and, if the medium of the marketing communication is constrained by time or space, the measures that the marketer takes to make that information available to the consumer by other means. and 3.4.1 3.4.1 the main characteristics of the product (Misleading advertising).
The ad must not appear again in its current form. We told Auto Union Finance Ltd t/a New Car Discount to ensure that they did not mislead consumers by creating the impression that a product was a brand new, unregistered vehicle if that was not the case. We also told them to ensure that prominent qualifying information was given to notify consumers when a vehicle was pre-registered.