Bargain deal run down by factory price rise: Waiting for delivery of a new car cost a buyer an added 6 per cent

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The Independent Online
PEOPLE buying new cars should be wary of last-minute price increases that can add hundreds of pounds to a deal that has been already agreed.

In February Ray Leather, who lives in Manchester, struck what he thought was a good deal with Pinkstone, a Toyota dealer in Stoke, for a new Carina.

He was unhappy when he was told that the car might not be available until May, but decided to go ahead because the price of pounds 10,150 was attractive.

On 5 May he was told that the car had arrived in the UK but that it would cost pounds 600 more than the original quotation because of a price increase imposed by the manufacturer on 1 May. Mr Leather's employer, buying the car for him, ended up paying pounds 10,750, nearly 6 per cent more than the agreed price.

'Pinkstone said that they could not absorb this increase themselves as their original deal was so keen. Their negotiations with Toyota to forgo the increase were unsuccessful,' Mr Leather explained.

But he thinks this is unfair: 'The price paid should be the price agreed at the time of the order. This is normal and fair business practice in most industries.'

Toyota (GB), the Japanese car maker's UK import agent, refuses to refund the pounds 600 and points to a purchase contract signed by Mr Leather when he agreed the price with Pinkstone. This covers the possibility that the price may go up before the car is available. It states that if the manufacturer's price increases before delivery the dealer is obliged to give notice and allow the individual the chance to back out of the deal within 14 days.

This clause is identical to one in the model purchase contract recommended by the Retail Motor Industry Federation, to which Pinkstone belongs.

Toyota says that Mr Leather was given notice but did not back out. Mr Leather says that he wanted the car - and is indeed extremely pleased with it - but fine print in the purchase contracts should not be used to mask bad pricing practice.

'Apart from anything else it is wide open to the suspicion that delivery dates could easily be manipulated so as to take advantage of price increases.'

A spokesman for Toyota (GB) said that the May increases were imposed after consultation with Toyota in Japan. The cost of importing the cars had risen because of the strength of the yen against sterling.

He denied that there was any price manipulation, saying that it was not in anyone's interest to hold back deliveries and potential sales pending a price increase.

The motor industry denies that arguments over last-minute price increases are widespread and Neil Pinkstone, managing director of the dealer, said he could not recall a case similar to Mr Leather's.

Sean Wadmore, senior consumer affairs officer at the Society of Motor Manufacturers and Traders, said he could think of only about half a dozen such complaints to the organisation in the past year.

However, the issue has clearly been important enough for the Retail Motor Industry Federation to deal with it in its model contracts. Some car companies, including Vauxhall and Ford, are now promising customers that they will not have to pay for any price increases imposed by the manufacturer before delivery.

A spokesman for Vauxhall explained: 'Should the price of a car be increased after the customer has placed the order, but before the vehicle has been delivered, this cost is borne by Vauxhall, not the dealer.'

Toyota's spokesman said that the company might consider a similar scheme. He added that Ford and Vauxhall, which both have manufacturing plants in Europe, had fewer problems than Toyota in meeting demand. The number of Toyotas made in the UK was still tiny and the company was subject to import quotas, which caused a number of problems in meeting orders.

Phil Howells, a Consumers' Association solicitor said he had dealt with one or two complaints from people about unexpected car price rises. But buyers who had signed contracts with reasonable get-out clauses were on shaky legal ground. 'It is a warning to read the fine print,' Mr Howells said.

Customers who want to nail a dealer down over price could ask for the clause to be withdrawn from a contract, but should check first whether any change to the contract needs special approval, from a managing director for example.

(Photograph omitted)